Energy provision and bioenergy production in Namibia

3.3.1 At the national level

Namibia’s total annual energy consumption was around 15 TWh, or 7.5 MWh per capita in 2008 (Von Oertzen, 2008). Energy consumption in Namibia uses a relatively high proportion of the nation’s GDP because the country has a low population density and long transport routes and relies on the energy-intensive mining and agricultural industries and imports, especially fuel for transport. Liquid and gaseous fossil fuels account for 60 per cent of national energy consumption, electrical energy 25 per cent and biomass 15 per cent; in 2008, less than 1 per cent came from other sources of renewable energy (ibid.). Approximately 63 per cent of Namibian households use firewood for cooking and heating (NPC, 2008).

Less than one-third of Namibia’s total energy supply comes from domestic sources. Energy makes up a large part of foreign currency expenditures, putting great pressure on the country’s balance of trade and foreign currency

reserves (Von Oertzen, 2008). Namibia imports 100 per cent of its fossil fuel from the RSA (NPC, 2008). Since these are short-term open-market contracts, the local fuel-consuming economy is very vulnerable to currency fluctuations (Von Oertzen, 2008). According to ESMAP (2005), Namibia has been able to reduce its oil vulnerability since 1990 – partly by increasing the share of other energy sources and partly by decoupling economic growth from energy consumption. Between 1990 and 2003, GDP grew more than the total consumption of primary energy.

As for electricity, Namibia’s peak demand exceeded 500 MW in mid-2008;

its total domestic electricity generation capacity was 387 MW (Von Oertzen, 2008). Almost 50 per cent of Namibia’s electricity is imported from the RSA and Zimbabwe (NPC 2008). The power-supply contracts with the RSA date from when the electricity made from coal and nuclear energy in written-off power plants was cheap. Now, however, the RSA has greater energy needs, black-outs and is going to revise its generation capacity (possibly adding renewables), meaning that Namibia might get less energy at higher prices. To improve the situation somewhat, the Caprivi Interconnector recently linked Namibia with Zambia and Zimbabwe. Electricity supply sources in Namibia include a coal-fired power station near Windhoek (120 MW), a hydroelectric plant at Ruacana (240 MW), and smaller heavy-fuel-oil powered plants of 24 MW and 3 MW connected to the central grid.

The country has a relatively well-developed 16,000-km-long system for transmitting and distributing electricity. One-third of the population is estimated to have grid access, mostly in urban and peri-urban areas (Von Oertzen, 2008).

The electricity market is regulated by the Electricity Control Board (ECB).

NamPower, the government-owned generation and transmission utility, provides electricity and manages the national network. Regional Electricity Distributors purchase electricity from NamPower to distribute to final consumers.

Namibia’s future energy demand is expected to expand considerably, mainly due to increased demand from the mining sector. Various energy sources are being discussed, including coal, natural gas and off-shore oil, as well as uranium. NDP 3 suggests several additional electricity sources in- and outside Namibia (NPC, 2008). The MME strives to provide all households with access to affordable and appropriate energy supplies and attracting investors is viewed as one way of reaching this goal. The MME also wants

to move towards the sustainable use of Namibia’s natural resources to produce energy (Joubert, Zimmermann, & Graz, 2009).

The rural population is hardly served by the national electricity grid, with a mere 15 per cent connected, compared with 70 per cent of the urban population (Von Oertzen, 2008). A Rural Electrification Master Plan, completed in 2000 and revised in 2005, identifies the need to develop on- and off-grid infrastructure (Interim Bioenergy Committee, 2006). Furthermore, NDP 2 identified a number of sites for small-scale power generation in rural areas, including 11 for the Caprivi and Kavango regions (NPC, 2008).

NDP 3 (NPC, 2008) targets the increase of the electricity supply to rural households from 16 per cent in 2006 to 20 per cent in 2012.

An Off-Grid Energisation Master Plan (OGEMP) was developed in 2007 (CSA, 2007) to roll out off-grid rural electrification. But no incentive schemes have been implemented for off-grid electrification that are easily accessible. In contrast, as the MME stated in its White Paper on Energy Policy, “[R]ural electrification using the grid is heavily subsidised, while off-grid household electrification using renewable energy is not” (Kuemmel, 1998, p. 44).

3.3.2 Renewable energies

Namibia’s general potential for renewable energy is very high. Its high daily solar radiation of 6 KWh/m² makes generating solar energy very plausible.

In addition, on-land wind energy potentials in Namibia are estimated to exceed 100 MW, hydro-electric potentials more than 350 MW, geothermal over 100 MW and wave & tidal energy above 200 MW. Biomass energy for electrification, especially from encroached bush, could exceed 100 MW (Von Oertzen, 2008). Leinonen (2007) calculates Namibia’s annual bush-to-energy potential to be 40.8 TWh, exceeding its current bush-to-energy needs.

In view of these potentials, the renewable energies sector is seen as a major contributor to Namibia’s future energy mix. This was emphasized in the White Paper on Energy Policy (Ministry of Mines and Energy [MME], 1998). One goal is securing energy supply through a diversity of reliable (Namibian) sources: The “government committed itself to promoting the use of renewable sources of energy wherever this is technically feasible and economically viable” (Kuemmel, 1998, p. 43). NDP 3 (NPC, 2008, p. 54) stated that the outcome envisaged for the renewable energy sub-sector

is an “increased renewable energy use with increased economic and environmental benefits”. One OGEMP activity included in NDP 3 (NPC, 2008) is promoting biogas energy generation using invader bush. However, there are no policies with binding targets for renewable energies, and very limited private investment in Namibia’s renewable energies sector – perhaps because of low tariffs, the absence of other incentives and the small domestic industrial base (Von Oertzen, 2008).

As it now stands, highly subsidized conventional diesel prices in Namibia and cheap imported electricity create negative effects for the viability of renewable energy solutions (Int. Solar Age Namibia). Namibian experts agree that feed-in tariffs are currently too low to attract investments (ibid.;

Int. Jumbo Charcoal / CSA). Were the Namibian government to increase its tariffs, they could not compete with cheap electricity imports from the RSA, which in turn are not economically sustainable because they are insufficient to renew the energy park. The ECB (Int. Electricity Control Board) opines that South African prices for Namibia will rise in the future.

3.3.3 The National Bio-oil Energy Roadmap

The transport sector’s total dependence on fossil fuel imports, as well as rural poverty and the agricultural potentials in the northern communal areas, have stimulated plans to foster a domestic biofuel industry. The most important initiative is the National Bio-Oil Energy Roadmap published by the NAB in August 2006 after an Interim Bio-Energy Committee was established to “draw up a Roadmap for all decisions, institutional arrangements, international agreements, legislation etc. to create a conducive environment in Namibia to grow and process bio-oil” (Interim Bioenergy Committee, 2006, p. 6). This document considers that Jatropha has the greatest potential for bio-oil production under dryland conditions in Namibia. The roadmap envisaged approximately 63,000 ha of Jatropha being planted in Namibia by 2013 in order to support an energy-intensive economy. It addresses concerns regarding bio-oil production, such as effects on food security, biodiversity and the eco-tourist economy. The roadmap also touches on the opportunities offered by the CDM.

The possibility of generating energy using lignocellulosic technology was mentioned, but without linking it to the problem of bush encroachment.

Since the respective processing technologies were not deemed commercially feasible for the near future, the roadmap left further research on this topic to the Directorate of Forestry (DoF).

The roadmap set four intermediate objectives for advancing bio-oil production, and defined their objectives, activities and milestones as well as responsibilities and timelines:

1. Bi- and multilateral agreements, e.g. the exchange of scientific know-how and technology; arrangements concerning the CDM.

2. Policy environment and policy instruments, e.g. tax incentives and awareness and communication programmes.

3. Management of process, product and market risks, e.g. developing product standards and a feasibility study of potential anchor markets.

4. Technology pathways, e.g. developing best operation practices, training programmes and extension-service delivery systems.

A National Oil Crops for Energy Committee (NOCEC) was established with representatives from six ministries and stakeholders to coordinate the roadmap’s implementation (MAWF, n.d.). In 2008, the Namibian government authorized a blend of 5 per cent biodiesel and 95 per cent petroleum diesel (Int. MME), but most other roadmap activities were not carried out until mid-2009. In 2008, the MME, MET and MAWF formed a committee headed by the MME to elaborate the official Namibian position, but studies designed to help the committee to formulate its position also were not made until mid-2009 (Int. MAWF; Int. MME; Int. MET). The reasons for the delay are explored in the following chapters.