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Namibia: Electricity Up 18 Percent
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The Namibian (Windhoek)
16 April 2008
Posted to the web 16 April 2008
Brigitte Weidlich
Windhoek
The price of bulk electricity will go up by 18,06 per cent in July. That is not the whole story, however.
There is no light at the end of the tunnel for consumers: Bulk users like municipalities and regional electricity distributors (REDs) still have to add their inflationary increase for consumers.
This could translate into a staggering 30 per cent hike for the man and woman in the street, according to experts.
"NamPower requested an average 18,3 per cent increase and after thorough analysis we decided to grant an 18,06 per cent tariff increase to NamPower to charge its customers," Dr Siseho Simasiku, Chief Executive Officer of the Electricity Control Board (ECB), told a news conference in Windhoek yesterday.
A year ago, NamPower was granted a 13,2 per cent hike.
With a power shortage in southern Africa, caused by supply outstripping demand in neighbouring South Africa, increased prices for fuel, coal and transport, there was no other choice, Simasiku said.
"NamPower also buys electricity from South Africa now at substantially higher prices and at peak demand times.
The Van Eck coal-fired power station is run at a very high cost, the same with the 24 megawatt (MW) Paratus diesel plant at Walvis Bay - on Monday even the diesel prices went up."
Simasiku noted that Cabinet had decided in 2005 that NamPower tariffs had to reach cost reflectivity by the financial year 2010-11.
"Cost reflectivity means that the power utility is allowed to recover all costs of supplying electricity, which include all operational, administrative and customer care costs.
In addition, the ECB allows a return on assets.
If electricity tariffs are not cost reflective, it is very difficult to attract private investors or even financiers," he said.
Contrary to South Africa, where consumers are bracing for a possible 60 per cent hike, electricity tariffs in Namibia had been increased steadily over the past few years so that the shock for consumers was not so big, the ECB boss added.
"Electricity tariff increases are unavoidable for next five years, that is the song the ECB has sung for a long time," he said.
Acting NamPower Managing Director Bertholdt Mbuere said that coal prices to run Van Eck had exploded in the past few months - from about N$600 to N$800 per tonne.
"The Caprivi interconnector line we are constructing will supply power by mid-2009, and by October this year we will receive 150 MW from the Hwange power station in Zimbabwe.
We will also have a meeting with our partners in the Kudu gas project next week and progress will be made soon," Mbuere said.
Good progress was also being made on installing a fourth turbine at the Ruacana hydropower plant on the Kunene River to increase its current 240 MW capacity to 320 MW by early 2010.
Simasiku yesterday urged all consumers, whether small or large, to save electricity.
He also revealed the final results of the SMS survey conducted last week, where consumers were asked whether they preferred tariff hikes or load shedding, which is planned blackout periods.
While the ECB website on Monday showed that more than 70 per cent of consumers voted for tariff hikes and only 28 per cent for load shedding, the picture looked different yesterday.
It was discovered that one person had voted thousands of times.
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The ECB received 6 682 valid survey entries, with 68,7 per cent voting for load shedding and only 31,3 per cent for tariff hikes.
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