Independent power producer TeraSun Energy is set to invest N$900 million for the construction of a 50-megawatt solar photovoltaic power park.
TeraSun, a subsidiary of Natura Energy, will construct the project under the modified single buyer (MSB) model introduced by the Electricity Control Board (ECB), and approved by Cabinet in April.
According to the ECB, the main change to the current single buyer model is that the MSB will allow transmission electricity consumers and independent power producers (IPPs) to transact with each other directly for the supply of electricity. Transmission customers will now also be able to buy a portion (up to 30%) of their energy requirements directly from a private generator.
In an interview with The Namibian this week, Natura Energy project development team's executive director, Ezio Vernetti, said they are aiming to commence selling electricity to contestable customers by the end of 2020, while construction is expected to kick off during the first quarter of 2020.
The idea is for the company to raise N$900 million on the local Namibian market and internationally to build the power park to supply competitively-priced electricity over the national grid to commercial and institutional, large power users.
Vernetti noted that they have so far invested N$10 million in project development activities.
The park will be situated at Arandis, benefitting from the highest solar irradiation in the country, and allowing competitive power to be generated.
"As a result of this MSB, which we feel is positive for the country, we have decided to structure a new investment, specifically in solar energy, at Arandis. This power park fits perfectly into the context of this model, approved by Cabinet, and will be operational by September. The idea would be to generate electricity and sell to contestable clients, those who are allowed to buy electricity from IPPs," Vernetti explained.
He said in line with this approved policy, IPPs can now sell energy to the regional energy distributors, and to the large transmission connected customers of Nampower, like the City of Windhoek, mines, regional councils, and town councils.
The executive director added that they have finalised the environmental impact assessment (EIA) clearance for a 50MW plant, but they can expand in the future if they wanted to.
"We have enough land to construct a plant of up to 100MW, so we could expand. However, for the moment, we have decided to keep it at 50MW because it is already very large for Namibia, and the EIA clearance is for that, our first phase," he said.
During the construction phase, 60 jobs will be created, while five jobs will be created during operations.
Speaking on the MSB, deputy mines and energy minister Kornelia Shilunga last week said the MSB and the IPP policy are envisioned to increase Namibia's domestic supply, thus reducing the country's import dependency.
Shilunga, who was speaking at the inauguration of another solar plant, said: "With these policy tools, the Ministry of Mines and Energy is working towards liberalising the electricity supply market in Namibia."
On their website, the ECB stated that the MSB will further provide an opportunity for the deployment of new generation technologies, such as battery storage.
"The modified single buyer framework is a new market platform for the electricity industry in Namibia, and it builds incrementally on the existing single buyer (SB) model, representing a modification of the existing market structure," explained the ECB.
The effective date for the MSB is 1 September 2019. However, the ECB is busy finalising the drafting of the regulatory tools for the model, including market rules and wheeling guidelines.