IN THIS ISSUE:

The ECB finalised the review process of the National Integrated Resource Plan (NIRP) in 2016, and since then various questions continue to be asked about the Plan and how it responds to Namibia’s energy mix.

The fact of the matter is there has been several changes in the Namibian energy supply industry and progress in power supply technology and

CEO’s MessageCEO’s Message

Keetmanshoop Municipality takes over electricity supply from SELCo | 6

ECB embarks on review of Market Structure Framework | 4

First Namibian wind power project nearing completion | 5

Apr - Jul 2017

resources availability.

Since the plan must be responsive to the dynamic nature of the industry, it has to be modified/adjusted in response to these changes, without necessarily going back to the drawing board, to accommodate scenario variability. The specific changes include the following:

(i) The Kudu Gas to Power project has been delayed due to several factors that

must be ironed out. Despite the delay Government is fully committed to Kudu as the Namibian flagship project.

(ii) The delay of several other large thermal

power plants using heavy fuel oil and natural gas have been on the card for a long time, but to date no construction have been finalised for a variety of reasons.

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It is a fact that electricity is an essential enabling factor underpinning most aspects of national development. At household level, electric lights replacing candles allow for better lighting and enhance reading and broaden educational opportunities. Electricity further reduces health hazards caused by candle fires and exposure to inhalation of smoke from fire when using paraffin lamps and candles.

Electricity for communications media such as radio, television, mobile telephones and internet improve information dissemination, provide for entertainment and enable communication. Electricity for refrigeration makes it possible to keep food for longer and may thus improve peoples’ health and access to better quality food.

Truly, the benefits brought about by access to affordable electricity cannot be over emphasised. However, most often the benefits of electricity beyond the distribution point is over-shadowed by affordability.

The question therefore is: Is it perhaps time that, for once, the focus is shifted to the benefits of electricity beyond the distribution point, instead of the cost of electricity at generation and transmission levels?

Feel free to speak to us:Corporate CommunicationsElectricity Control Board8 Bismarck StreetP. O. Box 2923WindhoekTel: +264 61 374 311Fax: +264 61 374 305Visit our website: www.ecb.org.na

(iii) Construction cost reductions for solar photovoltaic (PV) and wind power have been achieved in other jurisdictions and such reductions make these renewable technologies more attractive for Namibia. Several solar and wind power plants are committed and two solar PV plants of about 5 MW capacity each are operational.

(iv) An additional study has been completed on the cost to harvest encroacher bush for power generation. These results suggest that the use of biomass for power generation could be attractive for Namibia, subject to the outcome of pilot testing.

(v) The Government’s commitment on Climate Change mitigation

at the Conference of the Parties (COP) 21 on national targets for greenhouse gas (GHG) reduction and renewable power generation.

(vi) The demand has not grown as quickly as initially expected at

the time of the NIRP in 2013, partly due to delays in some of the larger industrial projects identified as demand drivers during that planning period.

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National Electricity Support Tariff Mechanism pilotted at Oshakati

An electricity subsidy for low consuming households has been pilotted at Oshakati in the Oshana region. The National Electricity Support Tariff Mechanism (NEST) is intended to make basic electricity needs and modern energy more affordable to low consuming households and the communities at large.

The Electricity Control Board (ECB) started with the development of the initiative in 2012, on behalf of the Ministry of Mines and Energy. Cabinet approved the mechanism in 2016 and subsequently mandated the ECB to implement it nationally.

The pilot phase was launched at Oshakati in July with Oshakati Premier Electric (OPE) as the piloting partner. OPE will roll-out the pilot phase as from 1 August 2017 ahead of the planned national implementation in 2018. OPE was identified to pilot the project because:

a) it offers modern metering and vending infrastructure;

b) is a well-managed and commercialised licensee;

c) is in a well-defined urban area; and d) currently serves a wide cross-section

of domestic electricity users.

The subsidy will provide financial relief to low income households by offering a subsidised tariff on a low circuit breaker rating of 15

amperes for the first 200 units. The households will be charged in three blocks as follows:

Block 1 - The first 50kWh per month will be purchased at N$ 1.15/kWh which is the cost of generating electricity, subsidizing the entire cost of transmitting and distributing the electricity. The customer will save 91cents per kWh.

Block 2 - A further 150kWh per month is purchased at N$ 1.61/kWh which is the cost of generating and transmitting the electricity, subsidizing the distribution cost. The customer will save 45 cents per kWh.

Block 3 - Further units will be purchased at the normal prepaid electricity tariff of Oshakati Premier Electric (OPE) at N$2.06/kWh.

For the purpose of the pilot implementation, the subsidy is made available by the Ministry of Mines and Energy through the National Energy Fund. This means that since OPE was supposed to collect N$ 2.06 per kWh, it will only collect from Block 1 and 2 customers N$ 1.15 per kWh and N$ 1.61 per kWh respectively. The difference will be subsidised by funding from the National Energy Fund.

For the national roll out, Block 1 and 2 will be subsidised through a Support Tariff Charge

levied to all non-subsidised electricity customers. This will manifest itself as a cross subsidy tariff from the following customers:

• domestic consumers with connection above 15Amps;

• commercial customers such as retailors; • industrial customers such as fishing and

manufacturing companies; and • transmission customers such as mines. An interactive web based tool that allows consumers to model appliances used on a 15-amp connection was also unveiled at the launch. The tool grants consumers the opportunity to interact, understand and see what type of appliances they will be able to use in their respective households on a 15 Amperes Circuit Breaker. As part of the pilot, Oshakati Premier Electric (OPE) commenced with a free connection project aimed at connecting some 1 200 inhabitants of the informal areas of Oshakati to the national grid.

The concept of a social electricity tariff is well accepted internationally and in the region, and is one way to ensure that low-income consumers can enjoy the benefits of electrical energy, even when local electricity prices escalate. In some countries the mechanism is known as Free Basic Electricity or Social Electricity Tariff.

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ECB embarks on review of ESI Market Framework

The Electricity Control Board (ECB) has embarked on a review of the ESI Market Framework. The current model was approved by Government in November 2000.

A key feature of the approved model was the establishment of a Single Buyer function. The implementation of a Single Buyer Market Model was seen as the most appropriate mechanism to manage and administer electricity trading arrangements and to contract new investments in electricity generation at the time.

Namibia’s experiences in engaging with Independent Power Producers (IPPs), the emergence of different market structures, funding requirements, significant cost reductions in photovoltaic, wind technology costs and the

emergence of new storage technologies prompted the ECB to re-examine the suitability of an exclusive Single Buyer Market model for Namibia.

Some of the challenges identified by stakeholders with the current Single Buyer Model (SBM) are amongst others: • Inherent conflict of

interest between NamPower’s role as a generator and off-taker from IPPs;

• Lack of competition in the market;

• Some import arrangements are considered expensive, resulting in upward pressure on prices;

• Lack of electricity access and services for some customers (e.g. off-grid customers); and

• The lack of formal guidance for bilateral agreements.

Some of the advantages and benefits stakeholders identified in the current model include amongst others:

• Simplicity;• Single point of responsibility for buying

and selling of electricity; and • Allowing private sector investment into

the market. Speaking during the national stakeholder workshop which was held in Windhoek on 23 Jun 2017 , ECB CEO, Foibe Namene, stressed that there was a need to evaluate and propose the most appropriate Market Structure Framework for the Namibian Electricity Supply Industry, hence the planned series of national stakeholder workshops.

“We need to have a market framework owned by all participants, a market framework not

only able to unlock all the benefits, but also that acknowledges and deal with the various concerns,” said Namene.

She noted that the key outcomes of the consultative platforms will be to:

1. develop an appropriate market framework that will meet Namibia’s current and future electricity sector’s needs, and

2. design a set of accompanying and aligned

market rules in support of the proposed market framework.

“We need to create an industry where local Namibians interact with their global partners as equals rather than dependants or junior partners, hence the need to create an evolutionary framework and rules that will achieve meaningful transformation, provide certainty and revitalise the industry to become a real enabler of inclusive growth,” added Namene.

The review of the ESI Market Framework will culminate into the development of the Market Framework and then the Market Rules. The market framework will be designed with the following principles in mind: 1. Fairness: All market participants should

be treated fairly and that all participants, including IPPs, operate on a level playing field and transact under same clear and transparent market rules,

2. Efficiency: Regulated tariff must reflect the cost of supply and prices must be set through effective competition and choice. Processes must transparent and fit for purpose (minimise need for data, quick decision making). Contain and manage risks,

3. Simplicity: Given the size of the Namibian market it is important that the market design and market rules are simple, clear and easy to understand,

4. Ease of Implementation: The market design and rules should not impose undue cost and time burden in market participants.

The next stakeholder workshop will take place in October, while the project is earmarked for completion in February 2018.

ECB Chief Executive Officer, Foibe Namene addressing participants during the review of the ESI Market Framework.

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The first-ever wind power project in Namibia, being constructed at Luderitz in the //Kharas region, is nearing completion. The plant being built by Innosun Energy Holdings, a Namibia-registered company owned by Namibian and French investors, will add five megawatts (5MW) of electricity to the national power grid. The construction of the wind farm, known as Ombepo Wind Farm, in which the Lüderitz Town Council holds a 5% stake, started in mid-2016.

Addressing Stakeholders during a site visit, Project manager Jan-Barend Scheepers noted that the wind farm would be completed and connected to Nampower’s electricity grid by the end of July 2017. He explained that Innosun Energy Holdings will, in terms of the power supply agreement, charge NamPower per unit

of electricity fed into the national grid.

“We are very proud to have been the company to pave the way for Namibia’s first large-scale Solar PV plant, and now with Namibia’s first large-scale wind park,” he said.

Scheepers explained that 80-metre-high towers were sourced from Spain, while 43-metre-long blades were imported from China as well as a 62-tonne generator. A 700-tonne crane was used to erect the towers and assemble the turbine.

Ombepo Wind Farm is the third utility-sized power plant developed, designed, constructed and operated by InnoSun, which also completed a 4,5MW PV solar power farm called Omburu in

May 2015. The next project was the 5MW Osona PV park, completed in August 2016.

Other than the Ombepo wind park, InnoSun in partnership with Alcon will build a third 5MW Solar PV park at Aussenkher on the banks of the Orange River. Furthermore, a second wind park will be built at the Elizabeth Bay Mine, known as #Oab, producing 8 MW for Namdeb’s mining activities. These should be completed by the end of 2017, bringing InnoSun’s total production to 27,5MW.

According to Scheepers, the N$180 million dollar wind power project has created about 70 jobs at Luderitz. Funding for the project came from InnoSun through a loan from the Development Bank of Namibia.

5MW solar PV plant commissioned at KaribibA 5MW solar PV plant constructed at a cost of 120 million Namibian dollars has been commissioned at Karibib in the Erongo region. The plant was developed by MetDecci Energy Investment from South Africa and its local partners. MetDecci is a conglomerate of Met Group in South Africa that supplies infrastructure for the energy and mining sectors, and Decci from the Czech Republic that develops, owns and manages solar power plants.

The plant, which will feed 5MW into the country’s national grid, is one of the 14 renewable energy projects commissioned under the interim Renewable Energy Feed-in Tariff (REFIT) programme. The REFIT programme has been

First Namibian wind power project nearing completion

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initiated by the Ministry of Mines and Energy, NamPower and the Electricity Control Board (ECB) to establish independent power producers in the country.

Speaking during the commissioning of the plant the director for MetDecci Namibia, Barnabas Uuwanga, said that apart from the land lease contract they signed with the Karibib Town Council, they will also share part of their profits with the council by selling electricity to NamPower.

“The profit-sharing is additional to the land rentals we are paying. This is because we want to contribute and increase the revenue generation of the town council,” said Uuwanga.

Speaking at the same occasion, the Deputy

Minister of Mines and Energy, Kornelia Shilunga, observed that the REFIT programme is an important part of her ministry’s strategy which seeks to strengthen local capacity to supply electricity and at the same time create opportunities for investors.

“Private sector participation in the energy sector will be key to achieving set goals and targets. Government alone will not be able to make it,” she said.

Shilunga said the Ministry of Mines and Energy finalised the National Energy Policy, the Renewable Energy Policy and National Integrated Resource Plan as part of plans to promote renewable energy.

On her part, Electricity Control Board (ECB) Chief

Executive Officer, Foibe Namene, said Namibia must take advantage of developments in the renewable energy sector to enhance security of electricity supply.

“We should harness our abundant sunlight, wind, biomass and other renewable energy resources for the development of our people, skills and technology transfer, as well as job creation and poverty eradication.”

The solar plant is expected to provide three-thousand eight hundred (3800) households at Karibib with electricity.

The town currently uses 2.8MW while the Navachab gold mine uses 9MW.

The Keetmanshoop Municipality has taken over the responsibility of supplying electricity at the town from the Southern Electricity Company (SELCo), effectively from 30 June 2017 when the SELCo contract expired. SELCo has been supplying electricity to the town of Keetmanshoop for the past 16 years under the license of the Keetmanshoop Municipality.

The takeover was confirmed to the local media by SELCo Managing Director Abraham Kukuri.

“The agreement has been always that the

network assets taken over at the inception of the agreement would revert back to the municipality, plus the upgrades made to the network assets,” he said.

According to Kukuri, SELCo employees who were working with the billing system, pre-paid system and network operations have been transferred to the Keetmanshoop Municipality to continue rendering services to the general public at the town.

Keetmanshoop Municipality Chief Executive

Keetmanshoop Municipality takes over electricity supply from SELCo

Keetmanshoop Mayor Gaudentia Krohne and Chief Executive Officer Desmond Basson explaining the electricity supply situation at the town during a press briefing.

Officer, Desmond Basson, confirmed the employee transfer as well as customer billing system data and prepaid system data by SELCo. He also confirmed that the municipality increased vending stations for the purchasing of prepaid electricity from two (2) to six (6) across town. “We are in discussions with service providers at the town to increase the six (6) vending stations,” added Basson.

In an interview with one of the daily newspapers Keetmanshoop Mayor Gaudentia Krohne observed that during the deliberations with the ECB, the town council was advised that consumers should not in any way be negatively affected in the course of the takeover negotiations.

“As a matter of urgency we, as responsible leaders, made this decision so that the electricity supply is not interrupted. What’s important is that the residents are not in darkness,” she said.

One of the ECB directives to the council was to create a ring-fenced account dealing with  the electricity revenue,  wherein customer deposits will be paid.

Keetmanshoop Municipality approached Erongo RED to assist with the continuation of electricity supply at the town until the establishment of Southern RED (SORED). Efforts to establish SORED are at an advanced stage and might bear fruits before the end of the year.

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ECB-sponsored community garden at Okakarara growing

The Electricity Control Board (ECB) donated educational material to the Kombat Primary School, situated 38 kilometres from Otavi in the Otjozondjupa region. The school caters for approximately 450 learners from pre-primary up to Grade 8, with a staff complement of 17 teachers.

The school was previously supported by the Kombat mine and was left vulnerable after the closure of the mine, which left almost 90% of parents and guardians unemployed, while the remainder are employed on nearby commercial farms.

The dire situation in which the school finds itself, prompted it to reach out to corporate Namibia for assistance. In response, the ECB donated educational material and a school siren, as part of its Corporate Social Responsibility.

The school commended the ECB for its noble gesture.

ECB donates educational material to Kombat Primary

ECB’s Corporate Social Responsibility

Kombat Primary School principal, Mrs. E. Beukes (with red book), joined by two learners and a member of the School Board in the school’s Resource Centre.

An ECB-sponsored community garden at Okakarara in the Otjozondjupa region, is growing in leaps-and-bounds. The 25 hector garden was started in 2014 with the sole purpose of assisting the needy, orphans and vulnerable children as well as people living with HIV/AIDS at Okakarara.

The garden has over the years produced fruits and vegetables which have been donated to

needy Government schools at Okakarara, in an effort to complement the Government School Feeding Programme, as well as soup kitchens for orphans and vulnerable children and people living with HIV/AIDS at the town.

The community garden donated six tons of vegetables in June 2017 towards the needy and soup kitchens of street children and people

living with HIV/AIDS at the town. The donation consisted of beans, carrots, cabbage and onions.

The individual in charge of the garden, Arnold Hindjou, thanked the ECB for donating fencing material and an irrigation system, valued at close to 90 thousand Namibian dollars. Hindjou noted that the donation made a huge difference and enabled him to expand the garden.

Arnold Hindjou with fresh carrots harvested from the community garden at Okakarara.

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Lizaan van Wyk posing for the camera. ECB CEO, Foibe Namene (3rd from left) welcoming a US delegation to ECB House.

Moses Shuudeni and Mrs Petronella Kapolo attending a workshop at the GZ Centre in Windhoek.

Johann Malan explaining the functions of the ECB during a meeting with Aranos residents.

SELCo’s Abraham Kukuri (middle) flanked by the ECB’s Gideon Nasima and Dr Maxwell Muyambo (on the right).

Kavepurua Kavetuna (with leather jacket) enjoying the break during a workshop at Swakopmund.

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