The Namibia Power Corporation (NamPower) says it recognises the significant growth opportunities in the emerging green hydrogen sector, which could potentially have a major impact on Namibia’s sustainable development.
Managing Director Simson Haulofu says while current green hydrogen projects are developed off-grid (meaning that they do not contribute to any grid connected load growth and which benefits would only be indirect), NamPower is exploring the off-take of excess energy as well as the supply of certified green energy to these projects in the future.
“There is potential for the green hydrogen sector to contribute toward achieving self-sufficiency if local demand is prioritised ahead of the production of green hydrogen, meaning that the electricity supplies will be less intermittent. The green hydrogen industry ought to facilitate the advancement of the electricity sector in order to attain self-sufficiency and lower electricity tariffs, rather than having the electricity sector subsidise green hydrogen for export purposes,” Haulofu says.
Although the primary aim of green hydrogen plants is to be self-sufficient and isolated for the sole production of hydrogen, NamPower is evaluating the feasibility of harnessing excess power generated by these large-scale solar and wind farms.
“The integration of this excess power into the national grid involves substantial investment to manage the intermittent nature of renewable sources and ensure grid stability. We remain optimistic that a level of collaboration can be reached based upon recent studies. However, this may only realise at a later stage when the green hydrogen projects have advanced or have been operational for some time,” says Haulofu.
First Hydrogen Feasibility Study
Namibia’s first green hydrogen feasibility study and collaboration with the Port of Rotterdam was done by NamPower way back in 2019/20 and NamPower continues to monitor international developments on this front and remains open to future partnerships that align with national energy strategies.
In the wake of the emerging green hydrogen sector, there has been suggestions to divide NamPower into multiple business units to encourage more market entrants. However, NamPower maintains that the Namibian electricity sector is already relatively open to other market entrants.
“The issue of unbundling NamPower remains that such a change would not necessarily bring more efficiencies without incurring higher overhead costs as the Namibian electricity sector still remains fairly small in comparison to other countries in the region. NamPower already operates with a level of internal segmentation that aligns with our strategic goals and regulatory requirements. The green hydrogen sector should have a minimal impact on this,” the NamPower MD says.
NamPower has also, in the meantime, been actively studying the integration of green hydrogen and liquefied natural gas (LNG) into its energy mix. These options are part of a broader strategy to diversify energy sources, considering their economic viability and the necessary economies of scale. NamPower’s latest addition, the Anixas II Power Plant is ready to accept a blend of LNG or green hydrogen within its fuel mix.
However, the power utility does not wish to pay a premium for “green” fuels which would impact electricity tariffs whilst other more affordable and equally sustainable fuels are readily available.
Transmission Expansion
At the same time, NamPower is advancing its commitment to accommodating the growing demand from renewable energy sources alongside other forms of generation. In support of this initiative, the utility has secured an equivalent of approximately N$2.6 billion from the World Bank for the ambitious Transmission Expansion and Energy Storage (TEES) Project.
“This project is crucial for enhancing the reliability of Namibia’s transmission network and for facilitating a greater integration of renewable energy into our national grid. To strategically guide these enhancements, NamPower is reviewing its Transmission Expansion Master Plan. This detailed plan outlines specific strategic investments essential for ensuring the grid’s stability and reliability. It is designed to accommodate load flows from various generation expansion scenarios while catering to anticipated demand growth projections,” says Haulofu.
NamPower says it is committed to increasing its renewable energy generation, aligning with national policies (National Energy Policy and National Renewable Energy policy) as well as international agreements and is targeting more than 70% renewable energy by 2030. This initiative is crucial for reducing imports, managing costs, and enhancing energy independence.
Grid Stability, Reliability
In accordance with the grid code, NamPower needs to invest to maintain the grid reliability and stability and it should not have any impact on quality of supply at a distribution level. In the same light, NamPower expects that smaller scale renewable plants will also feed energy into the grid coming from the distribution networks, and the grid should be ready to accommodate this.
NamPower is also exploring the expansion of Battery Energy Storage Systems (BESS) as the level of renewable energy generation increases. The current BESS projects are grant-funded and appropriately scaled to the funding available, but larger investments are anticipated to enhance energy dispatch during peak demands, shift energy from when it is abundantly available and to improve grid stability.
“NamPower further welcomes all participation under the MSB (Modified Single Buyer) Market, a market which is already existent and established, although with very few projects established to date. We adhere to all national regulations and aim to balance investment decisions to benefit all stakeholders while ensuring grid integrity, maintain a least cost supply mix, as well as acting as supplier of last resort,” Haulofu says.
