New solar energy markets and industry are emerging worldwide as costs continue to decline, performance improves, supply chains expand, solar-plus-storage systems march towards economic viability and solar power gains credibility in the government and private sectors. That’s the case in sub-Saharan Africa, where distributed solar power systems hold out the promise of enabling nations to extend sustainable energy access and development by leapfrogging dependence on centralized grids and fossil-fuel energy.
Government-owned utility Namibia Power Corp. (Nampower) recently announced it will invest N$4.7 billion (US$338 million) over the next five years to add 220 megawatts (MW) of renewable power capacity to its generation mix. More specifically, Nampower intends to tap into abundant solar and wind energy, as well as biomass, resources to build four renewable power plants across the country. That would be a significant addition in a country with one of the lowest population densities in the world. National power generation capacity totals an estimated 557 MW, some 347 MW of it hydroelectric, and nearly half the population, around 1 million residents, some 50% of whom live in rural areas, lacked access to modern electricity services as of 2016.
Namibia is benefiting from the global expansion of the solar market, which is reducing costs and improving the efficiency of solar photovoltaic panels and related equipment.
An enormous amount of untapped sustainable solar power and development potential
Namibia has much larger solar and renewable energy development aspirations, as well. Both Namibia and neighboring Botswana are working with the World Economic Forum’s (WEF) Global Future Council on Energy to develop a huge, five-gigawatt (GW) solar power project over the next two decades. “Mega-solar projects—large-scale installations capable of producing upwards of hundreds of megawatts of power—are generating much-needed electricity in countries all over the world.”
“In sunny southern Africa, however, a historic lack of public-private partnerships outside of South Africa and, until recently, Zambia, to develop such projects has left much of the region’s vast solar power potential largely untapped. Today, Botswana and Namibia are poised to change this trend,” highlighted Andrew Herscowitz, coordinator for the USAID-led Power Africa program.
Namibia’s solar power potential is enormous, with an average of 300 days per year of sunshine. It’s also the driest country on the African continent. That’s got government authorities and Nampower, along with multilateral development banks and agencies and solar power project developers thinking of capitalizing on all that solar, as well as wind and other renewable energy resources, to develop new water resources and boost sustainable agricultural and socio-economic development, as well as reduce energy imports.
Peak energy demand in Namibia stands at some 650 MW per day. Namibia imports electricity from neighboring south South Africa, Zambia and Zimbabwe to meet the shortfall in a domestic generation. Electricity imports could drop 20% from current levels by 2025 if solar power capacity is rolled out more widely, according to Namibia’s Ministry of Mines and Energy.
A total of 67 MW of solar power capacity has been rolled out and connected to the national grid in the past five years, according to the energy ministry. Solar energy accounted for almost 7% of the country’s total power generation capacity as of year-end 2017, according to SolarPlaza’s Solar Energy Africa 2018 report.
Mines and Energy Minister Thomas Kavaningilamo Alweendo has said that another 70 MW of renewable power capacity will be added by 2020. Solar is to account for 20 MW and wind power 50 MW. All told, 19 IPPs had signed power purchasing agreements with NamPower to supply a total of 175.5 MW of renewable power capacity as of the start of the year.
Namibia’s second-largest lender, Bank Windhoek last November issued a green bond on the Namibia Stock Exchange to fund renewable energy projects. It’s also financing projects as implementing partner of the Sustainable Use of Natural Resources and Energy Finance Fund, which was established by the French Development Agency.
Former and founding president Sam Nujoma officially commissioned the first of what’s expected to be a series of 100% solar-powered desalination systems developed by Finland’s Solar Water Solutions along the beach line adjacent to the University of Namibia’s Henties Bay campus. A joint development initiative on the part of the University of Namibia and Finland’s University of Turku, which funded the project for an approximate cost of around 3.2 Namibian dollars (~USD212,000).
The plant is able to produce 3,000 liters of potable freshwater per hour with zero in the way of operational or energy costs and without the need for batteries. In addition to salt, the system removes bacteria, chemicals, viruses and other impurities and not only from seawater, but practically any source of water, according to Solar Water Solutions.
Developing five gigawatts of emissions-free solar power capacity
Namibia and Botswana’s five-gigawatt solar power development partnership with WEF’s Global Future Council on Energy will be carried out in multiple phases over the course of the next 20 years and leverage the collective expertise and resources of the organizations involved. From the Global Future Council on Energy’s side, that includes the World Bank Group, the International Finance Corp., the African Development Bank, the Africa Renewable Energy Initiative, the New Partnership for Africa’s Development, the International Renewable Energy Agency (IRENA), and Power for Africa.
Both Namibia and Botswana get lots of sun, and they’re lightly populated with large areas of open space, attributes that make for good solar power production prospects. That includes concentrating solar power plants, as well as photovoltaic (PV) installations. The Global Future Council on Energy highlights other factors that heighten both Namibia and Botswana’s solar power development potential.
- Low-cost, efficient, and smart power-trading potential to meet expected high regional demand. Southern Africa may have as much as 24,000 MW of unmet demand for power by 2040. The market for electricity produced by the mega-solar projects in Botswana and Namibia includes 12 other countries in the region that could be connected via new and/or upgraded transmission infrastructure. As battery storage technology advances and costs of solar storage drop below $0.10 per kilowatt-hour, solar power becomes an even more cost-competitive solution.
- Strong investment, legal and regulatory environments. Botswana and Namibia have strong legal and regulatory environments that will encourage investors to participate in a large-scale competitive procurement program. Both outpace other countries in southern Africa on the Corruption Perception Index, and Botswana has the strongest credit rating in Africa. Namibia has cost-reflective electricity tariffs, allowing the utilities and developers to see the true cost of supplying electricity.
- Access to foreign currency. A key investment challenge for power projects across sub-Saharan Africa is the limited availability of foreign currency to permit repatriation of proceeds. Given the active diamond and mining industries in both countries, there should be sufficient foreign exchange available to facilitate outside investment.
- Job creation. Developing solar generation creates temporary and permanent jobs through construction, operations, and maintenance. Power Africa’s concept study for the Botswana and Namibia projects analyzed six large PV and six CSP projects to generate an estimate of the average number of jobs created per MW of each solar technology type, weighted by the capacity of each project. The study estimated that the development of a 275 MW PV plant and a 500 MW CSP plant could create 27,000 temporary jobs and 857 permanent jobs.
Opening up Namibia’s national electricity market to renewable power producers
Nampower expects to begin construction of its four utility-scale renewable power facilities this year and bring them online in 2022, with the utility financing the projects with internal resources, according to an African news source. Opening up its electricity sector to independent power producers (IPPs) serves as the linchpin in Namibia’s bid to spur nationwide electrification and socially and environmentally sustainable economic development and growth.
Nampower just recently acquired the nation’s first utility-scale solar power facility. Located in Mariental in the southern part of the country, Spain’s Alten Energias Renovables and Nampower, with Namibia’s Mangrove, Talyeni and First Place Investment contributed to the development of the 45.5-MW solar power plant. In addition, an initial set of turbines is up and running at the Ombepo wind power farm in Namibia’s southeast. Owned and operated by Franco-Namibian InnoSun Energy Holdings, Ombepo can send as much as 5 MW of emissions-free electricity on to Nampower’s national electricity grid.
Botswana and Namibia’s mega-solar development project with the WEF Global Council on Energy calls for the institution of a competitive tendering process via which project development licenses will be allocated to qualified bidders. That’s to begin with a tender to develop 300–500 MW of solar power capacity to meet growing domestic demand.
“The intention is that this initial phase will develop the market and build local capacity for managing the required technologies,” Power for Africa’s Herscowitz explained. “The next phase will seek to add 500–1,000 MW to be sold regionally, timed with the completion of regional transmission interconnectors. Ultimately, this mega-solar program could add another 1,000–3,000 MW or more to be traded across Africa’s regional power pools.”
Ripple effects across Namibia’s nascent solar power sector
Solar Water Solutions isn’t directly involved in the Namibian government’s mega-solar development partnership with the WEF Global Council on Energy, but company CEO Antti Pohjola sees it as a very positive development that should ripple across Namibia’s power and energy sectors and boost sustainable socio-economic development nationwide. That includes rural areas of the country where about 50% of Namibians live and earn their livelihoods.
For me, it really looks like an important policy decision to focus on renewable energy and not dependent on fossil fuels…also towards the most cost-effective, decentralized solutions that do not always require large initial investments…The highest value, and need, comes in more remote locations.
Similarly, Solar Water Solutions and other IPPs stand to benefit and contribute to a pluralist, competitive power and energy sector and market in Namibia. The Finnish company “focuses on a smaller scale, decentralized systems to produce clean water from the ocean or saline boreholes. Opportunities may arise in locations outside the last mile,” Pohjola said in an interview. “It [Namibia’s recent renewable power policy making] creates interesting opportunities for decentralized systems operating with renewable energy.”
“These meetings secured the high-level commitment necessary to start designing an African-led effort to develop mega solar in the region,” Power Africa’s Herscowitz reported. “To achieve sub-Saharan Africa’s considerable power generation needs, governments and the private sector must work together, think big, move quickly, and push hard. With these mega-solar projects in Botswana and Namibia, that’s exactly what we’re doing.”