Eskom Contract Worrisome

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– Namibia Could Face Power Crisis By Petronella Sibeene WINDHOEK Despite assurances from power utilities NamPower and Eskom that the supply of electricity to Namibia from South Africa would continue uninterrupted, a confidential report made available to New Era contradicts the two utilities. The confidential report that paints a quite worrisome picture was compiled by the Department of Public Enterprises under the title “Review of Security of Supply in South Africa”. It indicates the supply of power by Eskom should be regarded as “grave.” Eskom, the energy utility of South Africa, shares its surplus power with almost the entire Southern African region. This situation is said to have placed an extreme burden on Eskom’s ability to sustain its own domestic energy needs within South Africa. The report raises a serious question about the capability of Eskom continuing to supply electricity to its Southern African consumers including Namibia. It says Eskom could terminate export contracts if it faced difficulties in meeting its local demand. In recent weeks, South Africa has suffered frequent blackouts and the report says: “In situations where South Africa’s demand/supply balance is tight, as it is likely to be for the next few years, it is relevant to question the extent to which Eskom should be obliged to meet export demand,” reads the report compiled in July 2006. It further shows Namibia together with Zambia and Zimbabwe have non-firm contracts with Eskom. This places Namibia at a disadvantage. The non-firm contract type suggests should Eskom’s current problems worsen, Namibia would be among the first countries in the region to have its power supply cut. Eskom spokesperson Fani Zulu yesterday confirmed to New Era that Namibia, whose national power supplier NamPower currently has a non-firm contract with Eskom, requires just 24 hours’ notice of interruption. Zulu yesterday said despite the recurring hiccups the utility is facing, there are no intentions to cut supply to Namibia and other Southern African countries. “We are not considering cancelling any contracts,” he said. Namibia ended up with a non-firm contract after the bilateral agreement between NamPower and Eskom expired in 2006. NamPower further negotiated a new 15-year extension that came into force on 1 July 2006. NamPower’s Marketing Manager John Kaimu could not be drawn into divulging the terms of the contract saying it is not for public consumption. He also assured that there will never be a time when Eskom would cut power supply to NamPower completely. Zulu added that should it happen that Eskom cannot supply or meet the demands in other SADC countries, non-firm agreement holders can make use of the Short Term Energy Market (STEM) in the Southern African Power Pool. The SADC region faces a steady decline in power surplus as demand fast exceeds the available generation capacity. This situation is expected to reach a critical phase by 2007. Demand is currently growing at an average of 3% per year. Already, during the first half of 2006, Namibia faced a power supply problem due to the situation at Koeberg power station in South Africa. NamPower’s local general capacity output stood at 316 megawatts while import from South Africa was 88 megawatts. Due to problems, Eskom could only supply Namibia with 58 megawatts leaving the country with about 30 megawatts short. Even if this problem was solved, the report says: “Following the difficulties at Koeberg nuclear power station, the electricity supply and demand balance is extremely tight, particularly over the current winter peak demand season. Even with a resolution of the Koeberg problems, the national supply/demand balance is likely to remain tenuous during the next few years.” While the imminent power shortage is expected to affect Namibia largely due to its dependency on other countries, especially South Africa, NamPower has made progress in developing the existing power generators within the borders of Namibia and beyond, said NamPower’s managing director recently. Though as a long term remedy, the much-anticipated Kudu Gas power project, regarded as one of the possible solutions that could alleviate the projected electricity deficit, is expected to start this year and is anticipated to end in 2010. NamPower is in the process of implementing the Caprivi Link Inter-connector, which will comprise of the AC network strengthening a 970-kilometre, 350 kilovolt (kV) High Voltage Direct Current (HVDC) bipolar line and converter stations. Under this initiative, a 220 kV AC line from Livingstone in Zambia to the Zambezi substation in Katima Mulilo was commissioned in September this year. Another 285-kilometre 400 kV AC transmission line will be extended from Auas substation to Gerus and associated substations. Beyond the borders, NamPower is involved in consultations with Zimbabwe and Botswana to extend the Caprivi inter-connector. This interconnection will serve as a conduit for electricity, complementing Namibia’s current inter-connectivity with South Africa. Further negotiations regarding the Baynes Hydropower Scheme have already started between Namibia and Angola.