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Namibia: Electricity Tariffs Skyrocket
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New Era (Windhoek)
16 April 2008
Posted to the web 16 April 2008
Petronella Sibeene
Windhoek
After weeks of speculation and uncertainty, the Electricity Control Board (ECB) yesterday finally announced the highest ever electricity consumer tariff increase of 18.06 percent for the year 2008/9.
The new power tariffs take effect on July 1, putting a further strain on consumers already hard-pressed by a series of increases on consumer goods and fuel.
ECB Chief Executive Officer, Siseho Simasiku, announced that NamPower's tariff increase application of 18.3 percent was considered on March 13.
Other NamPower tariff increases granted by the electricity regulatory body are 40 percent on energy generation, zero percent on demand (the transmission component) and 20.1 percent on basic charges.
Last week, the ECB conducted an electricity consumer survey soliciting public input on whether to introduce higher tariffs or introduce load-shedding in the near future.
Simasiku revealed yesterday that 68.7 percent of electricity consumers across the country voted for load-shedding and 31.3 percent higher tariffs. This means the approved tariffs would have been even higher if the majority of customers had opted for higher tariffs.
The maximum electricity demand ever recorded is 449 megawatts. It is, however, anticipated that this is likely to increase by 10 to 20 percent during winter.
Electricity is one of the basic needs in Namibia and today its affordability by many households is of paramount importance.
Already, the consumer basket shows that the cost of living is becoming unbearable for many and an electricity tariff increase will only worsen the situation.
"It is foreseen and we would like to warn that electricity prices in Namibia and the Southern African region in general will continue to rise over the next five years," Simasiku said.
For Namibia, the situation is even worse given the country's limited generation sources.
Simasiku says NamPower's application was considered given the prevailing power shortages in the SADC region and the price at which power is generated and imported.
He singled out the Van Eck and Paratus power stations currently running at high costs due to exorbitant coal and diesel prices on the international markets.
Eskom that supplied on average 120 megawatts to Namibia can no longer feed the country with that much power as it also struggles to meet its local demand.
"The imports from Eskom have drastically reduced," confirmed NamPower's Chief Operating Officer, Bertholdt Mbuere.
Currently, the Ruacana Hydro Power Station is running at full capacity and the Van Eck, a standby power station, is also on full steam in order to mitigate the power shortage in the country.
Mbuere disclosed that NamPower, the ECB, mines and the Government are in discussions to put up an emergency generation with a 50 megawatts capacity.
The plant is anticipated to be operational next year and will cost half a billion Namibian dollars
The plant, once set up, will minimise load-shedding in the country.
Mbuere said NamPower projects are progressing well.
The Caprivi interconnector link recently faced some technical hitches due to rain but work continues with the commissioning date still set for mid-2009.
NamPower also plans to instal a fourth unit at the Ruacana Hydro Power Station at a cost of an estimated N$350 million. The unit will bring the generation capacity of this hydro plant to 320 megawatts with each unit generating 80 megawatts.
The Orange River Mini Hydro Power Plants project is still at consultation stage, Mbuere said.
"There is clear need for investment in generation and transmission in order for Namibia to become self-reliant in meeting the local current and future electricity demand," Simasiku said.
The ECB says various projects in power generation and transmission need to be undertaken for Namibia to reduce its dependency on other countries.
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"There is need to recover and provide for the costs of future network and generation expansions to alleviate possible future price shocks to consumers," stressed Simasiku.
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