Catherine Sasman
14 March 2008
Windhoek — Power outages could lead to great economic losses and the power crisis needs urgent political action to mitigate the situation and come up with cleaner, more sustainable alternatives, say experts, New Era reports.
Windhoek
The electricity supply crisis in the entire Southern African Development Community (SADC) is possibly the biggest single risk factor of the region's economic development, is the gloomy prognosis of a study that was commissioned by the Renewable Energy and Energy Efficiency Institute (REEEI).
It is estimated that a 24-hour blackout one day a month would reduce the gross value added by up to 3.4 percent. Namibia's main supplier of electricity, South Africa, has run out of spare capacity and it is said that it is short of 1000 megawatts to support its own needs. One of REEEI consultants, Antony Boting, suggested that this makes for compelling reasons why Namibia should take its energy needs into its own hands.
The consultants stressed that this is, however, not a financial or technical challenge, but rather a political one, and one that needs urgent attention. Namibia finds itself in a particularly precarious situation because its domestic power generation capacity does not even cover half the country's demand. The country is 40 percent electrified and consumes about 1.9 billion kilowatts per year. Thus far, it has relied on Eskom in South Africa to supply 50 percent of its energy needs.
For 20 years Eskom has had a surplus generating capacity, selling electricity at "very low" prices by world standards. But "slow and stagnant" electricity supply industry reforms and government intervention in South Africa have delayed Eskom's capacity extension plans. This, the consultants said is the reason for the now prevalent shortages. Namibia's local supply of energy comes from the Ruacana Hydro (providing 240 megawatts, which capacity is reduced over winter months); Van Eck (120 MW); and the diesel operated Paratus (24 MW).
The Zambia inter-connector was under construction last year with a capacity of 200 MW. The recently concluded deal with Zimbabwe's Hwange thermal power station - 2007 - would increase electricity supply by 150 MW.
NamPower also imports electricity from Zambia for supply to the Caprivi Region and exports on a small scale to Angola and Botswana. Completion of the Kudu Gas Project is anticipated by next year, with an estimated output of between 400 to 800 MW per year.
Since Independence, the demand for energy has surpassed supply. "We are exposed to power cuts," said Uli von Seydlitz. And with Namibia's over-dependence on Eskom, could mean that the country can expect to be cut off on a 24-hour warning. The challenge, said the REEEI consultants, is that Namibia's domestic generation capacity is not adequate to meet current and future projected demand. Before independence, said director of REEEI, Harald Schütt, electricity from South Africa was "unbeatably cheap" because of the "over-capacities" of coal fired power plants there. No new power stations have been built in Namibia in the last 30 years. But prices of electricity have so far been below the margin needed to recover the cost of new generation plants "of any type".
NamPower's average cost per kilowatt has increased from three cents to over nine cents in 2007. "Any option for building new plants will therefore as a matter of fact increase the price of electricity in Namibia," said Schütt.
This, he said, would have a negative impact on the economy. "The resulting insecurity of firm supply does not only jeopardise operation and investment of already existing enterprises in Namibia, but also jeopardises the efforts of Government, the Chamber of Commerce and Industry, banks and others to enhance international investment in Namibia," said Harald Schütt.
He said load-shedding is a threat to any business operation because it reduces the productive output while the cost remains the same. "What is even more serious is the loss of confidence in the Namibian economy and subsequently the reluctance of potential investors,' Schütt said.
"The South Africans calculate one KiloWatt per hour of not delivered electricity nowadays between R20 and R70!"
Renewable Options?
The REEEI study set out to address potential solutions to the pending electricity predicament, exploring the role renewable resources could play.
It looked at hydro- and coal-fired power generation, natural gas, nuclear power, biomass, solar thermal plants, solar photovoltaic power, wind energy and integrated solar combined cycle plants.
The conclusion drawn was that a mix of all options was found to be most desirable from an economic efficiency perspective, even when considering changes in economic growth rates, changes in Eskom prices, and increased or decreased Eskom shortages, the value of un-served energy and carbon credits.
The "least desirable scenario was where no new local generation and where a minimum energy imports were to take place.
In a "renewable maximised" scenario at N$14 billion, the consultants said, would make the biggest contribution to the Gross Domestic Product (GDP).
This factors in the high construction costs with the additional constructing capacity at the Baynes Hydro-electricity Power Station, and requiring plant size from concentrating solar power stations.
In addition to that, said the consultants, should renewable energy sources be maximised, this could lead to a scenario where 8553 jobs can be created.
This relates to the option to the implementation of biomass generation - created from invader bush.
Biomass generation option, suggested the consultants, has the greatest potential to promote small and medium and micro enterprises (SMMEs).
From a renewable energy perspective, they said, a maximum renewable scenario could contribute 90 percent to 100 percent of all Namibia's electricity needs.
Non-hydro renewable sources could contribute 46 percent in 2014 to 2017, before dropping to 25 percent if the Baynes generation plant is factored in.
Maximisation of renewable sources would, perhaps more importantly, lead to lower carbon emissions.
The current energy sources rely heavily on fossil fuels both inside Namibia and outside through Eskom imports.
"Although Van Eck coal-fired power station is likely to retire after 2012, until that time the power station is likely to release high levels of air pollution into the atmosphere," said the consultants.
Additional environmental aspects associated with the transmission of power that needs attention, they said, include the transmission line losses, which lead to ineffective use of natural resources from generation to the point of usage. What should also be considered the researchers said, is the cost of operation and maintenance of land between the long-distance transmission lines, the risks of fire under these lines, as well as the wildlife and bird interactions of power lines and supply interruptions to Namibia.
Also, said the researchers, more localised distributed power supply options could be considered to avoid the high carbon footprint and cost of transporting biomass over great distances to a centralised power station. Further, smaller localised systems could support communities in the area of the station through employment.
"If planned properly, land for biomass-for-energy production in Namibia should not have to conflict or compete with land for food production for the country. However, this would have to be verified," the researchers said. Should all options - or rather a mix of all options - be considered, they said, this could have a cumulative contribution to the GDP of N$12.05 billion. Should Namibia continue to rely on imported electricity and not invest in local generation, power outages could be as high as 9.7 percent of total demand.
"Demand side measures should be introduced as a matter of urgency," the researchers said, adding that the generation of renewable resources would be desirable.
"It is environmentally responsible, will create jobs, make an important contribution to the economy and ranks well from an economic efficiency perspective." However, they said, renewable sources are not without risk, and cannot be expected to supply all energy needs. But it could produce about 20 percent of the power needs without escalating consumer prices. It also avoids power outage problems. "Namibia stands at the cross roads and the price of not taking action could be very high indeed," they said. "Despite an investment plan of Eskom to the tune of N$313 billion, we cannot lay back and wait for the big brother in South Africa to rectify the situation," emphasised Schütt.
He also cautioned that solutions applied for hundreds of years in industrialised countries may not be the right ones to Namibia's problems.
"Instead of spending billions of dollars on building power lines to criss-cross the country from north to south and east to west, we can decide to leapfrog development and implement right away what industrialised countries are now trying to come back to," said Schütt.
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Greetings, Ms. Sasman!
Good article on prospects for biomass and other alternative power-generation options for southern Africa.
Would you be open to writing a piece on the same subject for our Biomass Magazine?
Please advise soonest. Many thanks!
Marc Hequet International Editor BBI International 4650-38th Avenue South Suite 160 Fargo ND 58103 USA phone +1.612.227.1024 www.bbibiofuels.com
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