The Ministry of Mines and Energy (MME) has issued a new ministerial wish-list for procuring new power generation projects as Namibia strives towards ensuring an uninterrupted supply of energy at affordable tariffs.
The 2024 Ministerial Determination of Power Generation Projects, which is in line with the National Integrated Resource Plan (NIRP), serves as a strategic guide for the power utility, NamPower, and the broader Electricity Supply Industry (ESI) in the development, procurement and execution of essential energy projects.
Mines and Energy Minister Tom Alweendo said the Ministerial Determination, which introduces a new allocation of 330 megawatts (MW) of solar photovoltaic (PV) capacity for procurement and implementation, underscores the Namibian Government’s commitment to improving energy security and advancing energy independence through sustainable power generation. It therefore aims to facilitate the continued growth and diversification of the country’s energy sector, with particular focus on renewable energy sources.
The new projects will be divided between NamPower and Independent Power Producers (IPPs). The power generation projects involve the development of six solar PV power plants, each with a capacity of 20MW, assigned to IPPs, through an accelerated procurement process.
REGIONS TARGETTED
“These projects are strategically earmarked to be constructed in specific regions with limited or no previous generation capacity to foster job creation and ensure local employment during both the construction and operation phases of the power plants, in addition to addressing intermittency grid challenges. The substation has been strategically chosen to minimise transmission integration costs and minimise impacts on overall projects tariff,” Alweendo said in the announcement.
The identified regions are Karas, Hardap, Oshikoto, Otjozondjupa, Kavango West, and Zambezi.
NamPower will add another 30MW to the already approved 70MW Rosh Pinah Solar PV Power Plant. This is a proactive step to benefit from the existing development works in an attempt to avoid delays, enhance investment efficiency and reduce dependency on imports faster than starting new projects from scratch.
The utility will also develop and own a new 80MW Omburu Solar PV Power Plant to be built adjacent to the existing Omburu plant in the Erongo region. NamPower will own and operate the new plant which will also maximise on local employment creation in the region.
SKORPION REVIVAL
Another proposed project is the 100 MW Skorpion Solar PV Power Plant to assist in the revival of the Skorpion Zinc Mine, which was previously powered by South Africa’s Eskom. The plant will facilitate the realisation of significant macro and micro spinoffs as the mine normally employs up to 600 direct and 1000 indirect employees. The new mining project, which includes the development of a new refinery and conversion project, is expected to create an additional 2000 jobs during construction and up to 800 jobs during operations.
“However, this project’s initiation remains contingent on finalising the power supply agreement between Skorpion Zinc Mine and NamPower to ensure that Namibian consumers do not cross subsidise the mine,” Alweendo said.
Currently, only about 40% of Namibia’s electricity needs are met through local generation facilities, mainly from the Ruacana Hydro Power Station (347MW) and various existing IPPs utilising renewable energy resources such as solar and wind. The bulk of the country’s power is imported from neighbouring countries and the Southern African Power Pool (SAPP) to address the shortfalls in local supply.
ADDITIONAL CAPACITY
The latest Ministerial Determination follows the 2018 directive intended to add an additional capacity of 250MW to enhance Namibia’s energy self-sufficiency. However, many of the projects are expected to reach their commercial operations as of this year through to 2027. These include a 50MW Anixas II heavy oil power station in Walvis Bay that will come into operation in early 2025.
The N$2.3 billion 40MW Otjikoto Biomass Power Station is scheduled to commence operations in June 2027, while the 20MW Khan IPP solar plant near Usakos will begin operating in February 2025.
In addition to the Ministerial Determination, the Modified Single Buyer (MSB) Market Model which was established in 2019 is currently fully operational. The MSB model was created to encourage further investment by the private sector in the electricity market. The MSB market allows Eligible Sellers, acting as IPPs, to transact directly with Contestable Customers, enabling transmission-connected customers to purchase up to 30% of their energy demand from Eligible Sellers, excluding NamPower. This approach not only promotes competition but also attracts private sector investments, which are crucial for expanding the country’s energy generation capacity.
