Namibian Electricity Control Board Issues Generation & Export Licenses For 125 MW Solar Plant To Feed Into Southern African Power Pool

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The Namibian Electricity Control Board (ECB) has issued generation and export licenses to Schonau Solar Energy for a 125 MW solar PV plant being developed by renewable energy company, Emesco. The licenses are the first of their size and kind to be issued by the ECB under the Modified Single Buyer (MSB) Framework. The plant is located in Karasburg, Namibia. It will generate electricity for 25 years and will export power via South Africa into the Southern African Power Pool’s (SAPP) competitive electricity markets.

The SAPP operates four competitive electricity markets between twelve member countries. It has facilitated trade between utilities in Southern Africa since 1995. The operating member countries include Namibia, South Africa, Lesotho, Eswatini, Zimbabwe, Botswana, Mozambique, Zambia, Malawi, and DRC, which are principally represented by each country’s national utility.

SAPP Trading arrangements are meant to fulfill the vision of SAPP, which is to:

• Facilitate the development of a competitive electricity market in the Southern African region
• Give the end user a choice of electricity supply
• Ensure that the Southern African region is the region of choice for investment by energy intensive users
• Ensure sustainable energy developments through sound economic, environmental & social practices
• STEM was initially used in SAPP and currently DAM system is being used. The pool moved from a cooperative to a competitive pool

SAPP Markets

Bilateral Market: Bilateral Trading Objectives are mainly to meet long-term demand and supply balance.

• Trading arrangements mutually agreed between bilateral parties
• Volumes and prices are the key parameters
• Transmission path to be secured in advance
• Can be firm or non-firm
  • Firm contracts
    • Have penalties for non-delivery
    • Generally, not interruptible – reliability premium
  • Non-Firm contracts
    • Are interruptible with notice
    • If notice given, no penalties
    • Generally, less than 75% reliable

Forward Physical Markets: Competitive trading in monthly or weekly contracts (or any other defined periods longer than one day ahead) for future delivery according to the contract specifications.

The following energy contracts may be traded:

• FPM-Monthly trades hourly energy base-load contracts for each of the 24 hours of all days in the following month.
• Hourly energy base-load contracts for the following time-of-use contracts with different hourly patterns valid for all days in the following month
  • Off-peak hours
  • Non off-peak hours
• FPM-Weekly trade’s hourly energy contracts for the following time-of-use contracts with different hourly patterns valid for all days in the following week:
  • Off-peak hours
  • Peak hours
  • Standard

Day Ahead Market: The regional market established within the SAPP with the objectives to trade electricity a day in advance of the delivery of such trades.

• Hourly energy contracts for each of the 24 hours of the following day, or a future day.

Intra Day Market: The IDM is a continuous market, and trading takes place every day around the clock until one hour before delivery. Prices are set based on a first-come, first-served principle.

• Hourly energy contracts for one or more hours for periods as specified by the SAPP Market Operator.

Emesco’s announcement adds:

The SAPP is allowing and encouraging private companies to join the SAPP to trade electricity via its organised markets. This is supported by the Namibian regulators’ MSB market structure which enables private companies to export power to the SAPP.

Emesco’s registration of Schonau Solar Energy as a market participant on SAPP will make it the first independent solar power producer to contribute to the SAPP grid under the MSB framework. NamPower, the Namibian national power utility, together with Schonau Solar Energy as Market Participant on SAPP will co-ordinate the export and trade of electricity on the SAPP competitive market.

Pinehas Mutota, GM Economic Regulation of ECB, said, “The ECB is pleased that the Modified Single Buyer Model has gained momentum, it is our belief that the MSB will contribute to the Governments objectives for Namibia to become an energy exporter. The issuing of the Generation and Export licenses to Schonau and other players is an indication and commitment by the Namibian Government to assist in reducing the power deficit in the region. We would like to wish Schonau all the best.”

Pieter Rossouw, Commercial Director of Emesco, said, “The Schonau project is a major step towards Namibia becoming a net exporter of energy through harnessing its abundant solar resource.  The project will add to a diversified energy mix, reduced costs, and decarbonisation in the Southern African Power Pool. Emesco is developing its pipeline of similar sized projects to provide renewable energy to support the green hydrogen initiative in Namibia and further expansion in the SAPP region.”

“Emesco has developed a significant pipeline of projects that includes solar, wind and storage technologies to be rolled out in Namibia with further expansion into the SADC region planned in the near future,” Rossouw concluded.

A summary of the project:

The DC nameplate capacity of the plant is 125 MW which will result in 116 MW AC Net generation for export.

Over the 25-year life of the plant, 7,898,064 MWh will be produced resulting in the mitigation of 7,796,179 t CO2

The estimated project cost is US$105M

This is a welcome development. The addition of this 125 MW solar plant from an independent power producer will help add some much needed capacity to the southern African market. Several countries in this region are facing critical power shortages. South Africa is the most affected. The utility company had to implement Stage 6 load-shedding over the weekend. Zimbabweans are also experiencing 13-hour power cuts on a daily basis.

Image from SAPP