Wednesday, November 19, 2014

Running out of energy

Last Thursday I was at the NCCI sponsored Namibian energy policy forum  It was a well-attended, gathering, with both the Minister of Mines and Energy and the Minister of Trade and Industry present, together with the present CEO of Nampower and his iconic forebear Dr. Leakey Hangala.

Initially expecting a routine procession of Powerpoints, I soon smelt the dissent in the air.  Were the main players in the country's energy industry simply manning their long-standing barricades, or were new policy conflicts emerging?

We had the Hon Minister of Trade and Industry showing that Namibia had the most expensive power in the SADC region, with the possible exception of Mauritius - an island 2000km out in the Indian ocean, and twice as expensive as our land-locked neighbour Botswana.

We had Dr. van Pletsen representing the private investor and his role in national energy policy, presenting his plans for a wind farm in Luderitz, but mainly lambasting Government for its penchant for encouraging private investors to spend their money in researching and piloting power schemes, but refusing to provide them with adequate guarantees (principally that it would purchase their power, and safeguard them against force majeure events, in other words problems arising which were outside the private company's control).  We had Mr  Vernetti presenting plans for the '250 megawatt' project (Namibia's current peak demand is about 560 MW, excluding certain mines) - this is apparently a hybrid scheme of diesel, solar and gas generation.).  Then there was Mr. Gschwender, the team leader for the biomass project, proposing to turn invader bush into fuel for conventional fuel power stations, such as van Eck in Windhoek.

Then, when it came to question time, Dr. Hangala upset the apple cart by laying into the Kudu gas project, now in an advanced stage of planning (but how advanced is advanced?).  He said it was unviable, and he probably meant that in the era of cheap gas, driven by American fracking, Kudu gas will probably be otally uncompetitive.

What puzzles me is that, when I first came to Namibia shortly after independence, the existing power stations of course were the ones from the colonial era - Ruacana, the coal fired station in Windhoek, with its landmark twin chimneys, and a small station in Walvis Bay.  Nearly twenty five years later, we still have the same power stations, with the country's greatly increased power consumption filled in by ad hoc imports.  There must have been innumerable conferences, proposals, feasibility studies and policy documents on energy - and nothing to show for it.  How is this possible?

But the next day, the Minister of Mines and Energy travelled to Omaruru to break the ground for a solar photo-voltaic system backed to the tune of N$84m by the French company Innosun, to add a modest but useful 4,5MW to the country's grid.  "Other investors just talk but nothing happens" said the Minister, spade in hand.  The price of the solar power will be expensive, but at least there will be literally something on the ground by next year.  An extra 4,5 MW of locally generated power since 1992.
Other investors just talk but nothing happens.
Other investors just talk but nothing happens.
Other investors just talk but nothing happens.

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