NamPower expects enormous strain on system from August

NAMPOWER expects an enormous strain on its power system from August this year.

The company stated in the annual report 2015 – covering the period 1 July 2014 to 30 June 2015 – that enormous strain will be placed on the system and additional generation capacity will need to have been commissioned to ensure national security of supply.

The company stated in the annual report 2015 – covering the period 1 July 2014 to 30 June 2015 – that enormous strain will be placed on the system and additional generation capacity will need to have been commissioned to ensure national security of supply.

The report was made available last week.

“Amongst the factors at play will be the foreseeable expiry of the bilateral agreement with Eskom, diminished output from Ruacana (due to lower water levels), step loads (including Skorpion when their contract with Eskom expires in 2017), and higher domestic economic growth, bringing with it higher power demand,” said chairperson of the board, Maria Nakale-Gaomas in the report.

Other challenges include the expiry of agreements with Eskom of South Africa and Aggreko of Mozambique and ageing power supply, she stated.

The report showed that the company’s profit before tax for the year decreased by 8,7% from N$773 million to N$706 million, mainly as a result of the increase in other operating expenditure and a reduction in the gross profit margin.

Profit after tax amoun­ted to N$531 million, when compared with N$616 million in the previous year.

Total assets increased to N$23,7 billion from N$23,1 billion in 2014.

NamPower’s revenue increased by 13% to N$4,5 billion for the year under review, primarily driven by the annual tariff increase of 13% and augmented by customer contributions for the construction of customer-required assets, as well as electricity sales to other regional utilities on the Short-Term Energy Market (STEM) during times of excess domestic supply.

Acting managing director Kahenge Simson Haulofu said a new maximum demand of 596 MW (without Skorpion) and 656 MW (with Skorpion) was registered on 2 June 2015. This was 7,25% higher than the previous record, registered on 9 June 2014,of 553 MW and 628 MW, respectively.

“The NamPower grid avoided any system-wide blackouts during the year under review. However, a monthly average of 17 unscheduled customer interruptions were experienced, with most of these disturbances attributed to extreme weather conditions such as lightning,” said Haulofu

NamPower targeted an available generation capacity of 480 MW for 2014/15, but achieved only 429,5 MW due to delays in completing both the refurbishment of the Van Eck power station and the Ruacana power station runner replacement projects.

Electricity sale volumes increased by 1,1% from 3 827 GWh in 2014 to 3 870 GWh in 2015.

According to the report, the rate of growth in electricity sales lagged that of peak demand due to a reduction in bulkwater pumping, customers’ increased use of renewable sources of energy such as solar water heating and rooftop solar photovoltaics as well as higher energy efficiencies in the mining sector, which was forced by decreased commodity prices.

“NamPower continues to encourage customers to apply all such economising measures,” the report said.

NamPower also disclosed that it is in the process of creating a framework under which its fibre optic assets can be further utilised for the benefit of Namibia and the southern African region at large, whilst at the same time furthering commercial viability for NamPower.

“Market studies and demand analyses were completed during the year under review, indicating promising opportunities in this regard. NamPower is currently in the process of engaging stakeholders, after which the implementation process can be expected to commence,” the company said.

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