Rojas Manyame General Manager: Regulation Electricity Control Board (ECB) Namibia

Transcription

1 Rojas Manyame General Manager: Regulation Electricity Control Board (ECB) Namibia

2 CONTENTS Background Renewable Resources Potential Institutional Framework Namibian ESI Current RE Procurement Status Challenges Conclusion

3 Background Electricity is no longer a luxury but Vehicle for development Namibia is blessed with abundant Renewable Energy (RE) resources including wind, solar and biomass. Namibian Energy Demand far exceeds Supply Urgent need to exploit the RE resources for energy generation Both public and private sectors have a role to play.

4 Namibia RE Resources Potential The following resources are in abundance: Wind. Solar. Biomass. Hydro.

5 Wind Energy Potential Av December at 14:00, 2m AGL Wind Electricity potential >Current grid capacity Source: von Oertzen 1999, REEE1/98 Renewable Energy in Namibia - May

6 Solar Radiation In Namibia Renewable Energy in Namibia - May

7 Food for Thought Cost Comparative Use of pictures, graphics, tables, etc. is at the discretion of the speaker: Keep diagrams simple and easy to view Make text readable with large font Use all space in rectangle Make sure your presentation is readable when printed in black and white

8 Institutional Framework Ministry of Mines and Energy (MME) Policy Maker Electricity Control Board (ECB) Policy Implementer Electricity Licensees Service Providers

9 Namibia s Electricity Supply Industry

10 ECB s Mandate Derived from the Electricity Act (Act 4 of 2007) To exercise control over and regulate the provision, use and consumption of electricity in Namibia; To oversee the efficient functioning and development of the electricity industry and security of electricity provision; To ensure the efficient provision of electricity; To ensure a competitive environment in the electricity industry in Namibia To promote private sector investment in the electricity industry

11 Main Regulatory Functions Economic functions Tariff setting Technical functions Standards setting Licensing Issue, cancel, transfer licensees in all ESI activities Monitoring above for compliance Mediation Between licensees, and their customers/prospective customers Create level playing field for industry participants Utilities,IPPs and Investors

12 ECB s Core Regulatory Tools Technical Regulation Quality of Supply and Service Standards Technical Rules Safety Code Grid Codes Infrastructure Standards Best Maintenance Practices Economic Regulation Generation and Transmission Tariff Methodology Operating and Reporting Manual Economic Rules Licensing Administrative regulations

13 Namibia s Market Model In an evolutionary state Historical Single buyer Current Modified single Buyer

14 Historical: Classic Single Buyer Model 2: Classic Single Buyer IPPs introduced and NamPower acts as exclusive (monopoly) Single Buyer NamPower (G & T) Regulated Tariffs REDs Cross - border (imports) SAPP PPA SAPP Cross - border (exports) Domestic IPPs - - Advantages Allows IPP entry (private investment) Relatively small structural, transactional and cultural changes Clear roles and responsibilities Simplified backup and balancing arrangements - NamPower retains responsibility as supplier of last resort Disadvantages Conflict of interest for utility Centralised Planning and decision - making Only one buyer of IPP power resulting in limited contracting options and choices (e.g. currency & commodity risks, size, etc.) All funding requirements and contractual commitments will fall in NamPower creating bottlenecks Risks No/limited market entry by IPPs Alternatively, excessive PPA contracting may result in stranded investments Contingent liabilities on Government PPA off - take by the Single Buyer Sub - optimal outcomes (contracting, price and dispatch) - full Renewable Energy in Namibia - May

15 Current: Modified Single Buyer - no IPP exports NamPower (G, T & MSB) Regulated Tariffs (non - exclusive central purchasing) NamPower acts as non - exclusive Single Buyer for domestic trade - IPPs can sell to NamPower, REDs and Contestable Customers. NamPower retains exclusive rights to cross - border trade. REDs Cross - border (imports) SAPP Contestable Customers Domestic IPPs Namibian Bilateral Trading Rules & Model (+PPAs) SAPP Cross - border (exports) - Advantages Reduces need for independence of SB IPP and Single Buyer risks diversified More buyers mean more contractual options and choices Improved ability to attract private capital No changes in NamPower structure Disadvantages More complex structural, transactional changes necessary Transmission access and pricing More sophisticated backup and balancing arrangements More complex dispatch, settlement & planning Risks Volume risk vests primarily with NamPower (but reduced by bilaterals) Capacity expansion (IPP investment) risk shared by SB & bilateral counterparties Fear of allowing IPPs and bilaterals 18 Renewable Energy in Namibia - May

16 Attracting RE IPPs into Namibia RE Procurement Mechanisms developed NIRP with RE targets finalised IPP and Investment Market Framework Robust licensing system Clear policy on tariffs

17 RE Procurement Mechanism Developed a RE procurement mechanism for Namibia Outcomes Tendering for large wind power plants and CSP facilities REFIT for landfill, small hydro, small wind and biomass (less than 5MW) Net metering for PV Supporting measures like soft loans, tax incentives, etc. Implementation Phase Implementation Project Steering Committee (PSC) was established Now driving tendering process Renewable Energy in Namibia - May

18 RE Procurement Mechanism Project Steering Committee (PSC) driving the process Procurement of 3 x 10MW in progress Prequalification done Tendering Status Delays encountered due to need of implementation agreement (IAs) by bidders Tender now proceeding without IAs Hopeful to finalise the process mid year Renewable Energy in Namibia - May

19 RE Procurement Mechanism REFIT Status REFIT Rules development in progress Final draft document ready for approval Interim REFIT process in progress to procure 70MW 27 IPPs are participating - each 5MW Competing for the 70MW 1 st 14 to reach financial closure to complete their projects All issued with provisional licences Standard PPA and TCA prepared Renewable Energy in Namibia - May

20 RE Procurement Mechanism NET Metering Status Net metering project was completed Rules approved by the Board Impact study done and workshopped Promulgation in progress Implementation thereafter Current Status Currently licensees allowing net metering in line with rules Oversizing discouraged No monetary reimbursement for excess power Cyclic rollover of 12 months Consumption offsetting to reduce bills Renewable Energy in Namibia - May

21 Conditional RE Licenses Issued to Date Capacity (MW) Technology Date issue Duration 1 44 Wind 01-Apr Solar PV 01-Jun Solar PV 01-Jul Solar PV 01-Jul Solar PV 01-May Solar PV 01-May Solar PV 01-May Solar PV 01-May Biogas 01-Jan Solar PV 01-Aug Solar PV 01-Aug Solar PV 01-Aug Solar PV 01-Jul CSP 01-Sep Solar PV 01-Nov Solar PV 01-Nov Solar PV 01-Apr Solar PV 01-Jan Solar PV 01-Apr Solar PV 01-Oct Solar PV 01-Jan Solar PV 01-Jan Biomass 01-Mar Solar PV 01-Mar Solar PV 01-Mar Solar PV 01-Mar Hydro 01-Jan-15 25

22 Conditional RE Licenses Issued to Date - Summary License Type No. of Licenses Total Capacity Wind 1 44 MW Solar PV MW Biomass 1 5 MW CSP 1 5 MW Biogas 1 16 MW Hydro 1 20 MW

23 Policy on Tariffs Government Policy states that tariffs should be: Be cost reflective Be Based on sound economic principles Create a level playing field for all ESI participants Reflect long Run Marginal Cost Generation Tariff Methodology Developed Cost Plus Cabinet decided that bulk tariffs should be cost reflective in 2011/2012. Above was achieved

24 Challenges Need to build solid base line database for RE Lack of RE Uptake Support Mechanisms Absence of specific RE policy RE included in White Paper on Energy Policy Support mechanisms eg IAs still under discussion Introduction of special instruments to ensure a greater share of RET in the electricity supply (like quotas, REFIT and others).

25 Conclusion Urgent need for exploiting Namibia RE resources Regulatory regimes play a crucial role in promoting ESI investments Create a level playing field Need to develop specific RE policy Need for Robust RE Framework Need for subsidies to support RE uptake to mitigate tariff impact Need for private sector participation

26 Thank You