The first steps towards a Namibian Circular Bio Based Economy. Part 5

 

Energy

Background

Namibia has PV solar, hydro, coal and diesel electricity generation capacity. Our biggest drawback is cost of electricity, as around 60% of our electricity is currently being imported at high cost and together with high mark ups results in some of the most expensive electricity tariffs in the world.

As an developing nation we need electricity generation and financial viable distribution infrastructure. A large percentage of the income generated by Nampower is going towards infrastructure development and maintenance. 

It is impossible for the foreseeable future for Nampower to build all the electricity generating scale needed in the relatively short required time frame. Co-operation will be required with energy sector investors to move away from fossil fuelled electricity and dependancy on imported electricity.

This potential shift towards renewable electricity creates an opportunity for cost reduction and renewable electricity systems to take centre stage.

Our Namibian governing structures for Electricity generation and supply consists of the 

Ministry of Mines and Energy, the Electricity Control Board, Nampower and the RED’s (Regional Electricity Distributors).

The Electricity Control Board is driving the National Renewable Energy Policy that has a target of 70% Renewables by 2030 and connecting 50% of the population with electricity access.

Nampower is tasked with assisting the National Development Plan 5 & Harambee by focussing on clean power (renewables) for industry growth, job creation, health and education. 

During 2016 Nampower paid an average of 83.43 cents per kWh with a internal target price of 114,37 cents per kWh and retailed it for an average price of 129,73 cents/kWh, until the end of June 2016 with an yearly average ended retail price of 134,60 cents kW/h. For 2017 there is an decrease in the cost of electricity, however the Nampower audited statements does not disclose from which price point this was calculated.

In 2016 Nampower paid Eskom one of its suppliers N$2,6 Billion and it would be beneficial to know how much transmission losses there were given the distances of these lines.

Ongoing consumer growth was expected to be 9.5% per year, however for the last two years its been 3,6 and 3,7% respectively. With new Industry and developments planned (The extend of these new industry requirements are unclear at the time of writing) an significant increase can be expected over the following two years 2018-2019.

The Xaris 120-240 MW project has been scrapped which would of had a cost of N$7,6 billion and the capacity replacement has yet to be communicated.

We therefore have installed capacity of 1,093MW/year and Nampower puts 4,505 units into the system and sells 4,008 GWh as in 2016.

The question is what are being done for Namibia to reach the 2018 and 2030 targets?

* The net metering policy and IPP’s and not much else are being communicated.

With one of the highest cost per kWh in the world it’s not a good place to be, regardless of any other economic activity. Many countries are offering excess electricity at discounted rates even free at certain times to stimulate industry, so for Namibia this will be a hard road to forge out.

There are many Environmental Players in Namibia, offering access to funds and skills, especially in the renewable sector. Whether policy and actual economic activity is aligned is up for debate as for the foreseeable future it will be business as its expensive and polluting usual.

The Namibian Electricity Control Board has published the current electricity cost structure for electricity in 2018. The General Tariff is et at N$1,28 + Transmission N$ 0,41 + Distribution N$0,55 = Average retail tariff N$2,41.kWh

What are our options?

Scrap all future investments in fossil and nuclear energy and take a look at decentralised rural models while using existing and renewable technology side by side until a complete changeover to renewables are possible.

Create a marketplace to encourage the uptake of electric vehicles, solar electricity installations, solar hot water generation and solar cooking in all sectors with grants and or assisted loans.

Hot water, potable water, agriculture water and electricity production can be combined for decentralised needs and applications.

The main renewable technology currently being used is Photovoltaic panels to generate electricity with hardly any Namibian installations adopting battery storage with only direct feed into the grid while producing electricity during day time. The new wind generation facility also does not have any storage capacity.

This direct feed is an major issue for our grid as high peak usage is normally when the sun doesn’t shine and balancing of the grid can only be done with day before purchases from other countries and our own generating capacity.

It certainly looks like our two tier pricing model can either include a third level and/or start to look at storage as to keep supply and pricing in a available and cost effective state.

A disadvantage of PV solar is that the units generally lasts for 10-20 years and wind power turbines 25 years. A longer lasting investment option needs to be looked at in addition to these technologies.

The future electricity solution for Namibia lies in the sun as well, its called Concentrated Solar Power (CSP) with Thermal Energy Storage to be precise. These systems are robust and have generally a long life expectancy with the added benefit that these systems store energy in the from of heat that can be converted into electricity even after sunset.

Additional advantages of this technology includes heating, cooling and potable water desalination which can all be incorporated.

Depending on the system it can be used for small to large buildings and far off located communities- Fresnel reflectors and Stirling dishes and for large utility scale applications Parabolic troughs and/or Tower reflectors.

Never has Namibia been is such a advantages position with our high sun radiation and barren landscapes to produce electricity for local consumption and export.

Construction of these plants are coming down in price however for an direct comparison with the cancelled Xaris 240 MW plant it is interesting to note that its cost were to be N$7,6 billion, no mention has been made of the fuel and operational costs, nor the emissions. In South Africa there are a few CSP plants operational, two of these have an combined output of 200MW Kaxu and Xina and are on approximately 630 hectares in the Northern Cape. The local community is a part owner with partners Eskom and the Builder/operator. 

Each site was developed for US$860 and US$880 million. Both have energy storage capacity and low operating costs with zero emissions. Costs have come down since 2016 and are dropping which should drive feasibility for Namibian implementation in the foreseeable future.

Value Chain

By making electricity cheaper the Government and Namibians in either private or industry consumers will save direct electricity costs which will create more value in Namibia. Namibia’s electricity costs must have a maximum wholesale value of 30 to 40 Namibia cents/kWh in order to be competitive on the word scale. This is important for future development and new emerging opportunities that require energy to drive the future. The current solar project tenders are costed at 2-16 cents US per kWh depending on technology size and location.

Trade and Industry, Mines and Energy, Environment and Tourism, Works and Science and Technology are all government ministries that will benefit directly and or indirectly from the uptake of electrification of our Transport industry and adoption of Solar Power.

New infrastructure, charging networks, transport solutions (both public and private), data centres, rural electrification, construction (low cost housing and all building construction projects), small-large scale agriculture and future electricity needs can all be catered for in an economically, sustainable and renewable way. Additionally rural communities can benefit from job creation and disadvantaged groups can benefit financially from part ownership in these developments.

Practical examples of positive change:

Building Industry; solar roofing, electricity, heating and cooling 

Construction and commercial; equipment and machinery, solar panel, CSP systems

Charging Network; private, business, government, public

Public transport; Trains, Busses and Taxis

Agriculture; equipment and machinery and closer to market

Tools and battery manufacturing as well as recycling

Conversion industry 

Civil; pumps and street lights

Communications, internet and communications access to rural areas

Production of equipment and services

Freight, Truck and Train Transport

Aviation vehicles

Tourism; vehicles and lodging (ATV’s game viewing etc), electric bikes, sightseeing vehicles

Marine industry

Mining vehicles and equipment

Decentralised power generation, replacing fossil fuelled generators.

Nampower cost savings on decentralized options

Namwater sufficient and economical water supply from sea and or aquifers.

Government fleet costs and operational budget savings (cooling and heating)

The biggest positive social factor is employment and skills development opportunities

Foreign investment, to utilize lower electricity costs and our stable political climate.

What do we need to make this happen?

Access to finance, technology partners and the Namibian labour force.

Namibia needs to offer the community where these power plants are to be run a share of the business, creating jobs and wealth for these communities.

Additionally each power plant must incorporate a data centre and/or agriculture facility to further encourage foreign investment and securing food security.

The opportunities within Renewable energy far outweigh any opportunities offered by fossil burning electricity generation.

The current electrical supply in Namibia is primary imported from neighbouring countries. This situation causes electricity to be disproportionately more expensive than that of the competitive neighbouring countries. For the Namibian economy to become truly competitive it needs to have access to cheap electricity when and where it is required. Expensive distribution lines are not the solution and disruptive new ways of generating and storing electricity is required for Namibian business and it’s economy to become effective from a cost perspective when competing on the world stage.

The good news is that the technology and systems are commercially available now to ensure that Namibia can have access to low cost uninterrupted electricity. The mind shift required to move in this direction has been restricted for an extended period of time. It’s therefore unacceptable that Namibia is in the situation it is. 

The private sector will be able to solve the issues, with the Namibian government, however the government and its stakeholders need to set policy that will enable co-operation. Off utmost importance is to ensure that all economic activities needs to focus on empowering Namibians and not offer foreign players undue local economic benefit.

The future

The truth that we need to focus on is the balance within nature. Burning anything that grows will generally be part of the carbon cycle and not damage the climate. Burning anything else such as fossil fuels which are not in sync with the carbon cycle will play a negative role towards earth’s the climate issues.

Using the sun which is a thermal nuclear reactor that is dependable and free should be at the forefront of all electricity, transport, agriculture, water and economic developments. 

Solar installations on roofs of buildings are already cheaper options than grid connected options in Namibia. 78% of Customers that have solar installations should save money from day 1 (Sungevity 2012).

Decentralised communities that are using Kerosene are paying US$ 2/kWh while they can pay US 10 cents/kWh going solar?

In the world the cost of solar has passed nuclear as the cheapest option yet electricity retail cost are still going up? In Germany solar is driving power costs down by 40% since 2012.

There is no educated nor practical reason why Namibia should continue importing electricity and expose its consumers to rising prices. Its totally counter productive to the development goals set for Namibia as a country and needs an immediate policy for implementation. 

The final thought about electricity is the fact that PV generation with battery storage is cheaper than any old school generation and distribution model! Its the number one disruptive technology innovation that requires an equally disruptive and innovative new Business model. Good thing is we don’t have to work it out, everything needed has already been paid for, we can leapfrog right into an renewable solution.

If there is one concept to think about and potentially do something about its this, why does Namibia and Namibians not all go the PV and battery storage route? Its cheaper and ensures availability to every household and business irrespective of location? Why would you continue to drive a expensive centralised distribution model?

by Willem Baartman

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