There was panic in Windhoek Thursday when NamPower announced that load shedding would be implemented later in the evening.
Namibia is most probably the only country in the region that has not resorted to load shedding as a means of saving power.
Unlike other power utilities in the region, NamPower has 6 billion Namibian dollars (500 million U.S dollars) in reserves. It has used 400 million Namibian dollars (33 million U.S dollars) of the reserves to rehabilitate the Van Eck power station and to buy more than 20, 000 LED lights that save up to 40MW, which were distributed free of charge.
Thursday’s announcement by the managing director of the country’s power utility, Paulinus Shilamba, at a mining expo and conference took businesspeople and residents by surprise.
Even the minister of energy, Obeth Kandjoze, had to run around to avert the possibility of load shedding.
The minister’s concern was that with power being critical to the mining sector, load shedding would have negative impact on the industry which contributes over 11.5 percent to the gross domestic product and earns the country more than 50 percent in foreign exchange.
Although government intervened and stopped NamPower from introducing load shedding, Namibia is still walking casually towards a dark future.
With more than 60 percent of its power supply being imports and with a 530MW peak demand against a peak supply of 285MW, the possibility of load shedding has not gone for good especially that most of the agreements with neighboring countries have either ended or will end soon.
Imports could cost Namibia up to 10 billion Namibian dollars (833 million U.S dollars) over the next four years.
The irony of it all is that Namibia has been sitting on the Kudu gas project for decades. Currently, wrangling between NamPower and the energy ministry has scuttled hopes for a proposed 7 billion Namibian dollar (583 million U.S dollars) 250MW power plant to ease the shortage in the short term.
Although NamPower still has hopes on Kudu gas, there is skepticism that the project conceived in 1974 can come to life now. Kudu gas power station is expected to be commissioned by 2017 after government allocated 4.93 billion Namibian dollars (4114 million U.S dollars) this financial year. Once commissioned, the power plant could provide 800MW.
Exploration analyses have shown that Kudu gas project has an estimated 3 trillion cubic feet of natural gas reserves. The project, a combined cycle gas turbine power station, will be the first of its kind in the region if ever it is going to be built.
Although there was some hopes in 2005 when a special purpose vehicle was established, the project has largely remained just a dream.
Since its inception, the license for Kudu gas project has been sold from one hopeful buyer to the next. Among the companies that have set their eyes on the project was the Royal Dutch Shell company, Chevron Texaco and Energy Africa.
In 2004, Tullow Oil bought into the project through Energy Africa, acquiring 90 percent interest in the license. Tullow Oil later sold 20 percent to Itochu.
Following a fall in its shares in 2007, Tullow Oil abandoned one of the exploration expeditions offshore Namibia.
At that time, the National Petroleum Corporation of Namibia (NamCor) that holds 10 percent shares in the project, teamed up with Russia’s Gazprom to establish a special purpose company that would acquire majority shareholding.
Shilamba lamented lack of commitment on Kudu Thursday saying that government has not taken any decision to solve the energy crisis in the past 10 years even though it was clear a shortage was looming.
“We knew of this problem 10 years ago but no decision was made on how to address it,” he said. “The plan for Kudu Gas and others was made a long time ago but nothing was done. Now we have a crisis coming in the next year and up to now, no decision has been made.”
Former NamPower chief executive, Leake Hangala, suggested that there should be a total revamp of Kudu’s business model considering various changes in the energy sector.
Although Hangala said Kudu was a viable project, times have changed.
“The business model that we had for Kudu 20 years ago is no more viable. We should look for a new business model.
“Kudu is viable but not the business model. Not because it was then a bad business model, but because times have changed. We must review the model and structure it to be appropriate to our times,” he said. Enditem.
-Xinhua
