October 6

Why Solar Makes Namibia Prosperous


We live in times of a widening electricity supply gap in Namibia. There are two answers to this problem: the conventional i. e. centralised one and the de-centralised Solar answer.

Let me tell the story the way my friend Harald Schütt from Amusha consultancy tells it: a business man who makes a profit deposits his profit in our banking system at some 5% yearly interest in order to barely shield it against inflation. Our banking system will invest this money within the South African banking system. Traditionally NamPower would come and finance the urgently required new generation capacity through a bank loan of some 9.5 % lending interest. Unfortunately, in order to payback the bank loan, NamPower has to raise the price of electricity significantly in order to bring the new generation capacity online. The businessman has two choices: either he pays or he goes out of business. If he pays, the generation capacity will belong to NamPower and they will still charge his grandchildren after he has helped to pay off the credit.

Now the Solar alternative, which is Namibian reality since we are beyond the point of “grid-parity”: our businessman invests in his own photovoltaic generation based on a self owned feed-in system. The project is profitable and break-even will be reached within 5 to 7 years. The businessman can rest assured since his investment guarantees him for the part of his own generation component electricity free from price escalation and it enables him to contribute to the supply of others. Let us summarize the advantages from the second alternative:

  • NamPower will be alleviated in its financial plight of raising money for generation capacity.
  • Much less transmission losses because Solar can generate power where it is needed.
  • The electricity customer will be alleviated in paying escalating prices for electricity, thus making disposable income available to stimulate demand for Namibian goods and services
  • Investment money stays inside Namibia and ends up circulating in the Namibian economy
  • Namibia is adding value to its own resource: the sun.
  • Namibia will see increased jobs and increased capacity building in our renewable energy sector.
  • It is the fastest solution to generate capacity and even with the highest local content.

Too good to be true? No, all the above arguments hold water and should go into a lively debate and they should serve as information to investors when deciding on their own feed-in system. Especially in a country with a population density of less than 3 people per km2, any centralised solution tends to be less economical than a decentralized, people-owned solution.

Any limiting factors ?

The indigenous Solar industry capacity is still not fit for the task: without swift growth the current yearly installation capacity of about 5 MW(peak) will attract large players from the international scene, thus diluting the local content. But in management there is a true saying: structure follows strategy. The long lead times of all current conventional power generation projects in Namibia will boost renewable energy in acquiring its rightful place on the grounds of all accompanying benefits: local, safe, fast, clean and affordable by many! Only if and when the general conditions are set to encourage de-centralised Solar generation of electricity the huge advantage of direct and indirect job creation will unfold. But colleagues from the local industry: when next time we here the outcry for more electricity we should have jockeyed into position ready to answer back “Yes, we can!”

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