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Winter to come with 8% hike in bulk electricity rate

Winter to come with 8% hike in bulk electricity rate

For power utility NamPower to cover its allowed operating costs, cover part of the under recovery of 2015/2016 and also fulfil its financial obligations, the electricity regulator this week announced that it has approved NamPower’s submission for an 8 % bulk tariff increase, effective 01 July.

Chief Executive of the Electricity Control Board, Foibe Namene said the increase translates to an effective bulk tariff increase from N$1.49 to N$1.61 per kiloWatt hour.

Namene said in accordance with the existing legal provisions, NamPower made an application for the tariff review. “In its application NamPower requested for an effective bulk tariff increase with three options of 5.38%, 10.08% and 22.40% for the financial period 2017/18, an increase from N$1.49 to N$1.56, N$1.64 and N$1.83 per kWh respectively,” she said.

Namene explained that the three options relate to the different strategies for recovering the under-recovery amount. “When 100% of the under-recovery amount of N$1.3 billion is included it implies that the entire amount will be recovered in the 2017/18 financial period, if 35% is included there will be another 65% that will be recovered in the period 2018/19,” she said.

“The increase is applicable to NamPower bulk customers which are Regional Electricity Distributors (REDS), Local Authorities, Regional Councils and mines,” she said.

Namene said that the ECB considers the 8% tariff increase to be the optimum increase for NamPower and the customers. “Should the increase be lower than 8% it means that a large portion of the under-recovery will be deferred to the following year which will be a burden on the future tariff adjustments,” she said.

Taking into consideration the stable electricity supply, the regulator is confident that the tariff increase will stabilise in the short to medium term.

In terms of future power issues, Namene said the country by the end of 2018 will have a total of 184 MW of renewable energy and this will make up 27% of the total installed capacity for the country.

“To date Namibia has commission power plants with a total capacity of 30 MW from Independent Power Producers, we are expecting an additional 58 MW, for a total capacity of 83 MW of renewable energy of which 70 MW is part of the Interim Renewable Energy Feed in Tariff (RETIF) programme. Commissioning of the remaining 55 MW of the REFIT programme is expected in the next 6 months,” she said.

Furthermore she said that an additional 101 MW is expected to be commissioned in the next 18 months comprising the Hardap Solar PV tender (37MW) and three unsolicited projects (64MW).

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Musa Carter

Musa Carter is a long-standing freelance contributor to the editorial team and also an active reporter. He gathers and verifies factual information regarding stories through interviews, observation and research. For the digital Economist, he promotes targeted content through various social networking sites such as the Economist facebook page (/Nameconomist/) and Twitter.