Reprieve for Independent Power Producers?
The Electricity Control Board (ECB) will hold a workshop next week on Renewable Energy Feed-in Tariffs (REFIT) aimed at addressing barriers to entry into the energy market faced by independent power producers from renewable energy sources.
Speaking at a renewable energy seminar hosted in the capital earlier this week by the Southern African German Chamber of Commerce and Industry, an official from the energy regulator told delegates that the ECB will convene a workshop that will look at some of the recommendations that the ECB want Government to consider in order to encourage investment in the renewable energy sector.
Francois Robinson manager: regulatory support services at ECB said after the initial resistance to provide Independent Power Producers (IPPs) with guarantees against risks such as regulatory, political, change in law, foreign currency etc, government has had a change of heart and has now agreed to look at these risks to determine how best it can be mitigated and/or supported.
In an interview with the Economist Robinson said: “At the initial stages government was not very supportive towards adopting all of these risks, but after various consultations including with our neighbours Zambia and South Africa, it was felt that for IPPs to enter a country, there is a need for government support.
After these consultations, the Ministry of Mines and Energy in consultation with the ECB and NamPower, are now busy preparing a report on those risks that can be considered for government support.
On the issue of the price of electricity Robinson said negotiations will only be done in Namibian dollars and not in US dollars as it is the responsibility of the IPPs to take on that risk.
Although there are more than ten licensed Independent Power Producers in Namibia, according to Robinson, NamPower has struggled to sign any power purchase agreements as IPPs have been demanding Government guarantees against risks such as regulatory, political, change in law, foreign currency etc.
Nampower MD Paulinus Shilamba indicated in May that in case the IPPs continue to demand Government guarantees against political risks and government in turn decides not to accept them, there was a strong possibility that IPP projects will never be implemented in Namibia.
Shilamba said the impasse will put NamPower under more pressure, as the power utility has to find ways of resolving the current power supply challenges on its own without private sector participation.
Robinson said in view of the recent announcement by Government that it will embark on a massive housing development project, the need to have electricity from renewable energy has become urgent until the Kudu Gas project comes on stream by 2018.