Namibia's power sector has historically been dominated by hydropower generation. Hydro accounted for 95% of total generation in 2015. Since this time, here has been a significant increase in solar power generation, particularly from 2017. As of 2020, solar generation accounts for around 20% of Namibia's total power generation.
In terms of capacity, solar PV has increased from around 20 MW in 2015 to around 150 MW in 2020 (note that this includes both utility scale and rooftop solar PV). In comparison, hydro capacity has increased only slightly during this time, from 330 MW to 350 MW. Coal capacity has remained flat at 120 MW.
Access to electricity in Namibia stood at 55% in 2021, while access to clean cooking technologies stood at 47%. Both have only slightly increased in recent years suggesting insufficient progress on these sustainable development indicators.
Namibia has set a target of 70% renewable share in domestic power generation by 2030 in their National Renewable Energy Policy.
Namibia has one of the highest solar irradiance levels in the world. With approximately 300 sunny days and over 3,000 sun hours per year, the annual solar irradiation reaches values of 2,200 to 2,400 kWh/m². This means that solar PV systems in Namibia generate twice as much electricity compared to similiar systems in Germany. Each unit of installed PV capacity can generate up to 5.6kWh per day.
Namibia is highly dependant on energy imports to meet its electricity demand, with imports accounting for roughly 60% of the country's total power demand. The state-owned power utility, NamPower, imports electricity from South Africa and the Southern Africa Power Pool through long-term bulk supply agreements.
Before the government set up a dedicated policy for renewable power, two independent projects were developed through direct negotiations between the government power utility and private developers. These included the 4.5 MW solar PV plant at Omburu (developed by French company InnoSun) and the 5 MW HopSol project, both which began operation in 2016. The government was able to directly negotiate these projects through the national electric power utility, NamPower.
The Solar Revolving Fund is a credit facility established by the Ministry of Mines and Energy in 1996 to stimulate demand for renewable energy technologies. It is part of the wider Off-Grid Energization Master Plan for Namibia whose objective is to provide access to suitable renewable energy technologies to off-grid areas. The Fund offers subsidised loans to Namibian citizens at a fixed interest rate of 5% per annum for 5 years.
The Fund finances:
— Solar home systems
— Photo-Voltaic pumps
— Solar water heaters
— Energy efficient stoves (financed as part of solar home systems)
According to the National Renewable Energy Policy report from 2017, between 2006 and 2015 the Solar Revolving Fund financed over 2000 solar PV home systems as well as solar water heaters and solar PV pumping systems.
A government managed procurement process for solar PV plants launched in 2013. The process — run by a renewable energy steering committee and an intergovernmental body — set up an auction programme in 2015/16 for three 10 MW solar PV power plants, each to be developed at a specified site.
At a late stage in the procurement process, the government realised that they would be unable to secure two of the three sites. As the preferred tender provider was the same for all three projects, they decided to relocate all three projects to the sole secured site and changed the bid to one 30 MW project.
This process change was challenged in court by an unsuccessful bidder. Before the court could decide the case, the Auditor-General decided, in 2016, to set aside the award for tender based on a judgement that the renewable energy steering committee had no legal authority to award the tender.
Commencing in April 2015, the interim Renewable Energy Feed-in Tariff (REFIT) scheme was designed as a pilot programme to increase generation from non-hydro sources. REFIT tariffs were initially set at quite generous levels and targeted solar PV, wind, and biomass projects of 500 kW to 5 MW capacity. The tariff prices were revised prior to projects being awarded partly because of price levels in a similar programme in neighbouring South Africa (the Renewable Energy Independent Power Producer Procurement Programme). Final feed-in tariffs ranged from USD0.078/kWh for onshore wind to USD0.099/kWh for solar PV. These were indexed to inflation.
Initially, 27 projects were granted provisional licences by the Electricity Control Board in the period leading up to the launch of the feed-in tariff programme. However, these failed to advance to financial close in the absence of a structured procurement programme. These projects were all invited to participate in the REFIT Programme and were given six months to submit all required documents. Fourteen projects (totalling 70 MW) were selected on a “first come, first meeting the requirements” basis. They then had six months to achieve the power purchase agreement effective date with Namibia's national power utility and a further 12 months to reach the commercial operation date. The remaining independent power producers were placed on a waiting list. The REFIT process therefore effectively became a race to the finish line, which helps to explain the rapid development of these projects.
In 2016, 14 REFIT projects (5 MW each), totalling 70 MW and more than US$123 million worth of private investment, reached financial close. All 14 REFIT projects reached their power purchase agreeement milestones and 13 reached commercial operation date by the required date.
In 2016, 14 REFIT projects (5 MW each), totalling 70 MW and more than US$123 million worth of private investment, reached financial close. All 14 REFIT projects reached their power purchase agreement milestones and 13 reached commercial operation date by the required date.
In 2015, Namibia adopted Net-Metering Rules mandating distribution companies offer a net-metering option to customers. In November 2016 the rules were approved and promulgated into national law. As of July 2017, renewable energy systems smaller than 500 kW can sell their excess electricity production back to the grid in an exchange for a tariff.
The National Integrated Resource Plan from 2016 lists a year by year implementation plan for increasing renewable energy capacity in Namibia.
Table 8.1 reports:
— 229.5 MW of solar PV in operation by 2035 (149.5 by 2023)
— 149 MW of wind by 2035 (99 MW by 2023)
— 80 MW of biomass by 2035, and
— 250 MW of concentrated solar power by 2035
The installation of concentrated solar power plant installation is expected to commence from 2026.
As of 2022, various sources report insalled solar PV capacity at around 150 MW, suggesting that Namibia is achieving its scheduled targets for this renewable energy technology.
Wind seems to be lagging, with a reported 49 MW installed by 2022.
A new auction design was developed to avoid the pitfalls of the failed 3 x 10 MW solar PV procurement programme. NamPower (the national electric power utility company) put out a tender to private developers for 27 MW of solar PV capacity. The utility expected an equity share of 10-19% and a minimum 30% share for previously disadvantaged Namibians.
The procurement programme also set the following minimum technical requirements:
— The degradation factor of the plant could not be more than 20% in year 25.
— The capacity factor for the plant needed to be 30% at the commerical operation date – reduced to no more than 20% in year 25.
— The lifetime of the plant needed to be guaranteed at 25 years.
— An availability guarantee of 98% was required during daytime hours.
— The minimum performance ratio of the plant was specified at 0.75.
Bidders were required to make commitments on each of these requirements (captured as part of the performance guarantees discussed below) projected annually for the project's duration.
NamPower awarded the tender to Spanish independent power producer Alten Renewable Energies (the same firm that was awarded the original, failed 3 x 10 MW project).
Alten's bid was NAD80.7c/kWh (USD6.3c/kWh at the time of award), making it the cheapest power source on the Namibian grid.
An important condition for all independent power producer generation licences granted through the feed-in tariff programme in Namibia is that there needs to be a minimum 30% previously disadvantaged Namibian shareholding in the project company.