Projects and initiatives to improve power supply situation
NamPower signed a PPA with Aggreko Mozambique for the supply of 90 MW Mid Merit Power to be wheeled through EDM (Electricidade de Mozambique) and Eskom transmission networks
Electricity demand has long surpassed supply, a situation that has necessitated NamPower to put short, medium and long term plans in place to ensure security of supply. At regional level, long term measures are being adopted to address the energy deficit and to ensure self-sufficiency in energy generation through an ambitious Energy Sector Plan that calls for the region to increase power generation by more than 70% and invest at least US$170 billion over the next 15 years.
All power utilities in the region, including NamPower, have therefore initiated a number of generation and transmission projects to increase generation capacity to meet the ever increasing demand for electricity.
In Namibia, the power supply deficit and associated challenges will continue to prevail until the commissioning of a new base load power station in 2018. Until then, and given the challenges of implementing large scale projects, Namibia will continue to rely on the Short Term Critical Supply Project (STCS), under which a number of short and medium term initiatives will be implemented.
1. Demand Side Management (DSM) programmes
NamPower will continue with the effective implementation of the DSM programme, which include Demand Market Participation, Time of Use Tariffs and Public Awareness Campaign under the theme “Power of Knowing”, advocating energy saving initiatives. Also part of demand management are the distribution of more compact flourecent (CFLs) or LED lights, solar water heaters, access to standby generators for large customers, energy audits and ripple control initiatives.
2. Rehabilitation of Van Eck Power Station
The Van Eck Power station has been out of operation since October 2012 for rehabilitation work. Amongst the three options identified by the feasibility study NamPower chose the option to extend the life span of the power station by 10 years through replacing and refurbishing most of its major components and to fully automate its functions. This will result in a more reliable power station, meeting its original design output of 120MW and a guaranteed base-load output of at least 90MW.
3. Replacement of turbine runners at Ruacana Power Station
With a minimal investment of aboutN$45 million to replace the turbine runners of the three old units, and through the resultant efficiency gains, an additional 15 MW will be added bringing the total installed capacity to 347 MW. The manufacturing of the runners is in progress. The delivery and installation of the first runner is expected in April 2014, with the last runner to be commissioned by October 2014.
4. Power Purchase Agreements
NamPower continues to negotiate new Power Purchase Agreements (PPAs) and to re-negotiate existing ones with neighbouring power utilities, especially with Eskom, ZESCO and ZESA. In this regard we hereby confirm that the PPA with ZESA, which was coming to an end in October 2013 has been extended for another year and will now run until the end of 2014. Negotiations with ZESCO are also at an advanced stage for an additional 100 MW.
NamPower signed a PPA with Aggreko Mozambique for the supply of 90 MW Mid Merit Power to be wheeled through EDM (Electricidade de Mozambique) and Eskom transmission networks. The power, which will be supplied from Aggreko’s interim gas-fired power station in Mozambique is available as of 1 June 2013 until end of August 2015, with an option of further extension subject to the availability of gas.
5. PPA negotiations with Independent Power Producers (IPPs)
PPA negotiations with IPPs are on-going regarding the off-take of power from the Arandis Diesel Power Station and from renewable energy projects in the form of wind and solar PV.
NamPower is currently in the process of finalising the pre-feasibility study into the use of biomass (invader bush) which will be completed soon. Results are promising and NamPower has given the go-ahead to continue with a full scale feasibility study, even investigating the feasibility of a hybrid biomass/ CSP (Concentrated Solar Power) plant. NamPower is also preparing of a tender document for a maximum of 30MW solar PV plant.
6. Investigation of the acquisition of emergency diesel generators
Large scale electricity diesel machines are readily available on the international markets for lease and can be acquired and installed relatively fast. These do come at a very high cost though, and will only be considered during an envisaged emergency. NamPower has decided to proceed with site identification and implementation of the ground works, including environmental impact assessment studies and discussion with the regulator (ECB) about licensing requirements.
Medium and long-term projects
1. Kudu Power Station
An important milestone was the signing of the Project Development Agreement (PDA) between NamPower and the Upstream Parties in March this year, which officially signalled the commencement of the last development phase of this very important national project, which will lead to the Final Investment Decision tentatively set for the first quarter of 2014.
NamPower as the project sponsor of the Kudu Power Station development issued the pre-qualification tender for the Engineering, Procurement and Construction (EPC) in April.
The main EPC tender document will be issued to the shortlisted EPC contractors only, who will have 90 days to prepare and submit their respective offers. The evaluation of the EPC tenders should be completed towards the end of this year, with contract awarding set for the second quarter of 2014.
2. Baynes Hydro Power Project
The reports by the consultants have been submitted to the Permanent Joint Technical Commission (PJTC) between Angola and Namibia who accepted and approved the outcome. The PJTC is expected to make a final recommendation to both the Namibian and Angolan governments before the end of 2013 once it approves the Final Environmental Report.
Upstream water extraction could play a critical role in the viability of the project and therefore the PJTC is simultaneously working on a draft country-to-country bi-lateral agreement before it is agreed to pursue the project.
The estimated project implementation cost will be U$D 1,3 billion (including environmental mitigation costs, but excluding associated infrastructure such as transmission lines, roads, runways and telecommunications).
ZIZABONA is a joint electricity transmission interconnector project to link the power networks of Zimbabwe, Zambia, Botswana and Namibia to establish an alternative “western transmission corridor” and help de-congest SADC’s only existing “central transmission corridor” from Zambia through Zimbabwe, Botswana and into South Africa.
The project completion date is set for December 2015, with electricity flow through ZIZABONA’s “western transmission corridor” expected by January 2016.