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Namibia (2014)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

In 2012, the Namibian generation capacity has 415 MW shared among four conventional power plants.

The Ruacana Hydropower station is the main core of the Namibian power supply system. A fourth unit has been recently commissioned increasing its capacity from 240 MW to 330 MW. However, Ruacana is a run-of-river plant and the variations in Southern Angola’s rainfall limit its performances. It is therefore operated as a base load plant during the rainy season (February to May) and as a peaker for the rest of the year.

Van Eck 120 MW coal-fired plant was built in 1973 in the outskirt of Windhoek. The overall inefficiency and the maintenance complications make impossible to run the ageing plant at full capacity. Moreover, the coal necessary to run Van Eck is imported via the port of Walvis Bay and transported by train to Windhoek. In addition to the low efficiency, coal imports make the generation cost very high. Paratus (17 MW) and Anixas (22.5 MW) are two peaking diesel power stations respectively commissioned in 1976 and November 2011.

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Reliance

The Namibian electricity sector mainly relies mainly on electricity imports from the Southern African Power Pool (SAPP) (e.g. 60% of the supply in 2010).

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Extend network

Namibian urban households’ electrification is estimated at 70%, whereas for rural households, it has reached 25% in 2011.

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Capacity concerns

The grid is the major technical limitation for the integration of RE in Namibia. The overall structure does not permit an important balancing of power. Some transmission lines present important losses which are even bigger in the distribution system (up to 20%). Moreover, many substations need to be upgraded in order to evacuate additional power.

The interconnection with other SAPP members is still limited but the situation is progressing. For instance, a high voltage DC line (400 kV – 600 MW) that connects Namibia, Botswana and Zambia was commissioned in 2010. In addition, Namibia is connected to Angola and South Africa with AC lines.

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Renewable energy

Presently, in Namibia, RE technologies are being widely used mostly for off-grid energisation and domestic water heating. Successful bigger RE projects, however, are found scattered in isolation all over the country. The most recent project and probably biggest is the wind park close to Lüderitz that is expected to be completed by mid-2013. Other examples are the first commercial solar power plant in Namibia, which is due to commence in the future, and will be divided into 10 MW each at Gerus, Osana and Kokerbook, the equipment of the Shamalindi Primary School near Grootfontein with a solar plant and the complementing of UNAM’s Northern Campus in Ongwediva with a grid-connected Solar Photovoltaic system, which was at the time the largest of its kind in Namibia.

Furthermore, an initiative by the Austrian government, which ran until May 2012, aptly named Southern African Solar Thermal Training and Demonstration Initiative (SolTrain), assisted Southern African countries, including Namibia, to switch from a fossil fuel based energy supply to sustainable energy supply systems based on RE by setting up RE demonstration units at social institutions such as hospitals, orphanages and old people’s homes. Last but not least, almost all farms using wind pump installations for water are, in turn, forming small PV-wind hybrid islands all over the country.

Solar

Namibia has one of the best solar regimes in the world with an average high direct insolation of 2,200 kWh/m2/a and minimum cloud cover. The principal climatic indicator determining the technical potential for solar PV is the global horizontal irradiance (GHI). The areas with the highest GHI are mostly located in the western part of Namibia, from north to south.
One of the major solar PV applications in Namibia is the solar water pumping (PVP) in the cattle farms. Solar PV is also use for rural access to modern energy. It consists in small system equipped with an inverter and a storage system (batteries) that provide enough electricity for lighting, radio, TV or fans. Larger solar home systems are also utilized by households having a substantial consumption. They can feed the grid without license if the system is smaller than 500 kV. However, there is no compensation from the power utility. There is no large commercial solar PV plant in Namibia to date.

Wind

Namibia has one of the best wind RES in Africa since it is located in in the more extreme latitudes, away from the atmospheric heating and the earth’s rotation negative impacts. A wind assessment project was carried out by MME and GTZ in 1996 for the region of Luderitz and Walvis Bay (southern coast of Namibia). It showed that both sites have potential for wind power with wind speed around7 m/s. The methodology included a model analysis (WAsP and WindPro Programme) as well as ground measurement (10 m). Recent measurements at 85.7 meters high undertaken in Lüderitz by a potential wind IPP predict a yearly wind speed average reaching 10 m/s with a stable wind direction . Additional potential sites with good wind regime are likely to exist in areas located more in the North (e.g. Henties Bay, Terrace Bay, Mowe Bay). The SAPP has estimated the Namibian potential for wind at 27.201 MW and 36 TWh per year with a relative land use of 824,268 km2.

There is currently one wind turbine (220 kW) installed in Namibia. It feed the distribution grid in Erongo Region.

Biomass & Biogas

In Namibia, immense land areas are infested with invader bush. It is an important environmental concern because the bush encroachment limits the local biodiversity, the water absorption in the soil and the carrying capacity of livestock. It has been calculated that 26 million hectares of land are invaded in Namibia. With this amount of bush used to produce electricity, the same calculations shows that the potential generation would be 1,100 TWh which at the Namibian scale can be considered as unlimited. Most of this resource is located in the north of the country. The development of Jatropha-based biofuel is potentially high in the north-west of Namibia, i.e. Caprivi and Kavango regions.

From 2007 to 2010, the project Combating Bush Encroachment for Namibia’s Development (CBEND) funded by the European Union (N$ 14 million) established the first bush to electricity demonstration plant (250 kW) in Namibia. It was also the first PPA signed by Nampower with an IPP. However, the power plant does not feed electricity yet due to the low power factor of the connecting line.

Hydro

Namibia’s only perennial rivers are the Kunene, Kavango (forming borders with Angola and Zambia in the north) and the Orange River bordering South Africa in the south.
In 2010, 64% of the electricity was generated with Ruacana hydropower plant. Ruacana hydropower has now a capacity of 332 MW.

Nampower is examining the possibility of installing a second hydropower plant on Kunene River, downstream to Ruacana. The project (Baynes Hydro) has been in the pipelines for many decades. However, political tensions with Angola as well as socio-environmental concerns have restricted the project to a feasibility study. Nowadays, the perspective to supply Southern Africa from a large hydropower plant has raised interests for both parties. The estimated project implementation cost is about US$ 1.3 billion (US$ 10 billion).The deployment of small hydropower plants (6 to 12 MW) along the Orange River for a total capacity of 70 MW is examined by Nampower. The estimated cost is around US$ 5 million to U$ 35 million and it is planned to develop the project as a clean development mechanism activity.

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Ownership

The key players in the electricity distribution and supply business are NamPower (the state-owned power utility responsible for generation and transmission of electricity), the Regional Electricity Distributors (state-owned legal entities tasked with the supply and distribution of electricity in a dedicated region) and local authorities.

NamPower is a state owned utility that owns and operates generation and transmission capacity that it inherited at Independence in 1991. The company also owns shares in regional electricity distributors, and regards the management of transmission and integration into the Southern African Power Pool as key competencies.

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Competition

The electricity industry is dominated by the state-owned and vertically integrated NamPower, which owns and operates all of the country’s generation and transmission assets as well as some distribution facilities in the rural areas of central and southern Namibia. The bulk of the distribution of electricity is undertaken by the City of Windhoek (the country’s largest distributor). The remainder is managed by two regional electricity distribution companies (REDs) – the Northern RED (Nored which covers most of the northern part of the country stretching to the Caprivi Strip, and the Erongo RED (Erongored), which covers the central coastal region to the west of the country including Walvis Bay and Swakopmund – and by numerous small municipal distribution operations.

The transmission system and the trading of electricity are both fully managed by Nampower which is the single buyer in Namibia. Any independent power producer (IPP) that wants to feed electricity into the grid has to sell it to Nampower through a power purchase agreement (PPA).

This vertically integrated organisation results in a monopolistic situation with the transmission, generation and trading sectors governed by Nampower . Furthermore, the power utility has a generating branch which is not unbundled. It encompasses all the existing power plants feeding the grid to date, i.e., Van Eck coal plant, Ruacana Hydropower, Animas and Paramus diesel plants.

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Energy framework

The current energy policy is articulated in the White Paper on Energy Policy of 1998 (WPE). It contains specific policies with regard to RE that guided MME initiatives over the last few years. Between 2007 and 2010, the Namibian Renewable Energy Program (NAMREP) was developed to remove financial, economic, political and public awareness barriers to solar energy. Similarly, the Renewable Energy and Energy Efficiency Capacity Building Program (REEECAP) was implemented to generate information for the implementation of RE and energy efficiency policies formulated in the WPE. Concerning off-grid renewable energy, the support of the MME has been substantial particularly through the OGEMP.

The Energy Policy sets six specific national goals for the energy sector:

  • effective governance,
  • security of supply,
  • National Building Codes to Incorporate Renewable Energy Technologies and Energy Efficiency Principles
  • social well-being
  • investment and growth,
  • economic competitiveness and efficiency, and
  • sustainability

The Strategic Action Plan for the Implementation of Renewable Energy Policies was conducted in 2006, as part of the United Nations Development Programme (UNDP)/Global Environment Facility (GEF) /Ministry of Mines and Energy (MME) project entitled Barrier Removal to Namibian Renewable Energy Programme (NAMREP). Its goal is to provide organisational support and prioritisation of future renewable energy interventions that are in line with the White Paper on Energy Policy. The Strategic Action Plan listed nine development objectives, which were:

  • enhanced capacity of the renewable energy and energy efficiency sector,
  • improved renewable energy and energy efficiency knowledge base,
  • broadened awareness of renewable energy and energy efficiency,
  • equal playing field for renewable energy,
  • improved financing mechanisms for renewable energy technologies,
  • improved security of energy supply,
  • enhanced institutional coordination and integration,
  • improved access to energy, and
  • sustainable development.


The Strategic Action Plan was also formulated based on the improvements and additions to the existing institutional environment, including the establishment of the Renewable Energy and Energy Efficiency Institute (REEEI). The Strategic Action Plan included 41 policy statements, which ranged from developing and implementing a renewable energy and energy efficiency public awareness strategy, to the establishment of an Electrification Fund and developing renewable energy and energy efficiency guidelines for public institutions. While some of these development objectives have been met, such as the establishment of the REEEI, others are still being implemented or have not been addressed to date.

Namibia Renewable Energy Programme (NAMREP)
Building upon these objectives, in 2005, the Government of the Republic of Namibia initiated a Renewable Energy Programme with support from the Global Environment Facility (GEF). The Namibia Renewable Energy Programme was designed to increase affordability and access to RE services and accelerate market development for renewable energy technologies by reducing existing barriers, including human capacity, financial, technical, awareness and other market limitations.

Namibia Energy Efficiency Programme in Buildings (NEEP)
The Namibia Energy Efficiency Programme in Buildings (NEEP) is the major programme in the country that aims to promote the use of energy efficient technologies and practices in Namibia’s commercial and residential building sector. NEEP is co-funded by the GEF and UNDP under the Framework for Promoting Low Greenhouse Gas Buildings. This is a three year programme and is being implemented by the MME and REEEI at the Polytechnic of Namibia.

The NEEP project’s objective is geared towards the reduction of Namibia’s energy-related GHG emissions through the nationwide adoption of energy-efficient technologies and practices in the commercial and residential building sector, with a focus on government buildings, hospitals, hotels, schools and possibly a sample of residential buildings.

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Energy debates

As there is a mutual consent among all involved stakeholders, including those who raise environmental arguments about not using one of the world’s best solar, wind and biomass resources, to pave the way for RE technologies, the government has begun to work on a comprehensive legal framework which is by no means an easy task. The Ministry of Mines and Energy is currently working on a number of projects, such as the review of the White Paper and the New Energy Regulatory Framework, which will eventually provide for RE integration into the overall energy mix. Apart from that, both a Renewable Energy Act and an overall Energy Efficiency Act are in preparation. As therefore, the collection of more technical baseline data is necessary, the ECB has launched two projects, the National Integrated Resource Plan (NIRP) and the Renewable Energy Procurement Mechanism (REPM). NIRP will determine the optimal resource mix for electricity generation in the country, while REPM will allow for transparent tendering by the private sector for all power projects exceeding 5 MW.

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Energy studies

Namibia is a member of the Southern Africa Power Pool (SAPP), allowing for greater integration in interconnection infrastructure expanding generation capacity in the country.

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Role of government

Ministry of Mines and Energy (MME)
In Namibia, the main public authority of the Electricity Supply Industry (ESI) is the Ministry of Mines and Energy (MME) which is responsible for the formulation of energy policy.

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Government agencies

RE & Energy Efficiency Institute (REEEI)
In 2006 the MME in collaboration with Polytechnic of Namibia (PoN) created the RE and Energy Efficiency Institute (REEEI) to serve as a national information resource base for sustainable energy use and management. REEEI has plaid a major role for the coordination of programs like OGEMP, REEECAP or NAMREP. However, the institute has its own limitations such as a lack of human resource (5 full-time staff) and a rather low independency.

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Energy procedure

In Namibia, after a licence is issued to an RE producer, a PPA has to be negotiated with NamPower, which acts as the single buyer and Namibian grid operator. PPAs carry the further problem for the power producer in as much as market conditions might change once feed-in legislation is implemented while the RE producer is further bound to the conditions of the long term PPA. In its latest annual report, the ECB stated that there is, despite these uncertainties, an overwhelming private interest and the ECB has issued several licences for generation to intending independent power producers (IPP).

NamPower has been negotiating PPAs with several IPPs including three prospective wind energy developers, one near Lüderitz and two in the Walvis Bay area. For wind energy producers in particular, there are, in practice, some difficulties in successfully negotiating PPAs with NamPower. This is because they are confronted with the argument whereby they have to be responsible for an unpredictable capacity factor and an unstable grid in case wind energy contributes more than 10% of the local generation capacity.

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Energy regulator

The Electricity Control Board (ECB) is a statutory regulatory authority established in 2000 under the Electricity Act 2 of 2000; which has subsequently been repealed by the Electricity Act, 4 of 2007; the latter Act having expanded the ECB mandate and core responsibilities. The core mandate of the ECB is to exercise control over the electricity supply industry with the main responsibility of regulating electricity generation, transmission, distribution, supply, import and export in Namibia through setting tariffs and issuance of licenses. The ECB executes its statutory functions through the Technical Secretariat headed by the Chief Executive Officer.

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Degree of independence

The Electricity Act of 2007 established the independent regulator, the ECB. The ECB’s Board consists of five part-time members, appointed by the energy minister for terms of four years. These terms can be renewed for a further four years and the number of times such renewal can occur is not capped. The minister appoints both the chairperson and the vice-chairperson. However, a significant proportion of the final decision-making authority that would ordinarily rest with the regulator is retained by the energy minister.

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Regulatory framework

The Development of a Regulatory Framework for Renewable Energy and Energy Efficiency within the Electricity Sector (“REEE Regulatory Framework”) is one of several projects implemented by NAMREP. The REEE Regulatory Framework was prepared by Consulting Services Africa. The primary objective of the project is “to recommend the essential elements of a regulatory framework for renewable energy and energy efficiency in Namibia.”

Two strategic objectives underlie the recommendations of the REEE Regulatory Framework and should be at the heart of Namibia’s long-term energy policy and vision for sustainable development. These are: supporting environmentally sustainable technologies and attaining greater energy security through a steady increase of electricity production in Namibia using fuels or energy sources that are available in Namibia, for example the sun, biomass and wind. A critical issue for the successful realisation of the REEE Regulatory Framework is that the REEE Regulatory Framework must take into account Namibia’s unique socio-economic, infrastructural and environmental features.

The Environmental Management Act
The Environmental Management Act 7 of 2007 (“the EMA”) came into force on 6 February 2012. This Act will have a profound impact on the mining and energy industries in Namibia. In terms of section 27 of the EMA, the Minister of Environment and Tourism may list certain activities that may not be undertaken without an environmental clearance certificate. This list was published on 6 February 2012 and includes activities in respect of energy generation, transmission and storage and mining and quarrying activities.

The SADC Protocol on Energy
The SADC Protocol on Energy states, as one of its general principles, that member states must ensure that the development and use of energy is environmentally sound. Various guidelines for cooperation between member states are set forth in an annexure to the Protocol. The Guidelines emphasise the sustainable development of energy.

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Regulatory roles

In addition to control electricity tariffs, the ECB issues license for any individuals involve in generation, transmission, distribution and trade of electricity. For instance, an IPP willing to establish a wind power park in Namibia has to obtain a license from the regulator. Nonetheless, ECB has a limited independence in this process since the licensing has to be eventually agreed by MME 

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Energy regulation role

The Minister has executive responsibility for the electricity industry. Ministry of Mines and Energy is the policy recommendation body.

Electricity Control Board has statutory responsibility to advise the Minister on electricity matters.

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Regulatory barriers

Both off-grid and grid-connected energy production from RE resources requires a special institutional and legal framework which is, unfortunately, not in place to date. This is not only bemoaned by independent power producers of RE but also by state officials. In its latest annual report of the ECB, one can read that an overwhelming need exists to transform Namibia’s energy regulatory and institutional framework because the current one is largely non-existent and partially outdated.

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References

Le Fol, Yoann (2012): RENEWABLE ENERGY TRANSITION FOR A  SUSTAINABLE FUTURE IN NAMIBIA Available at: http://projekter.aau.dk/projekter/files/63642504/Master_Thesis_Yoann_Le_Fol.pdf Accessed 28th February 2014.

Naruc.org (2010): Namibia: Optimizing Domestic Resource Potential Available at: http://www.naruc.org/international/Documents/NAMIBIA%20Case%20Study.pdf Accessed 23th February 2014

Namibia: seeking independent power producers Available at: http://www.gsb.uct.ac.za/files/Namibia.pdf Accessed 23th February 2014

MME (2013): Revision of National Building Codes to Incorporate Renewable

Energy Technologies and Energy Efficiency Principles - Background Review Available at:http://www.reeei.org.na/admin/data/uploads/Background%20Review%20Building%20Codes.pdf Accessed 23th February 2014

Ruppel & Ruppel- Schlichting (eds.) (2013): Environmental Law and Policy in Namibia Available at: http://www.environment-namibia.net/tl_files/pdf_documents/publication/Environmental%20Law%20and%20Policy%20in%20Namibia%20-%20Towards%20making%20Africa%20the%20Tree%20of%20Life_2013.pdf Accessed 27th February 2014

UNDP (2012): Namibia Societal Acceleration Platform Prototyping Week Available at: http://www.pwc.com/na/en/assets/pdf/day2-energy-in-namibia-martha-mwandingi.pdf Accessed 27th February 2014

ECB website: http://www.ecb.org.na/  Accessed 27th February 2014

www.mbendi.com: Electrical Power in Namibia
- Overview
Available at: http://www.mbendi.com/indy/powr/af/na/p0005.htm Accessed 27th February 2014

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