Namibia’s Minister of Finance, Calle Schlettwein, has noted that the country should embrace renewable energy sources in order to reduce power imports, among other benefits.
According to local media the New Era, in 2016 the country’s imports exceeded exports by almost N$26 billion ($2 million) and that electricity is one of the country’s major imports.
Meanwhile the International Energy Agency’s data indicates that over two thirds of the Namibian population does not have access to electricity, and rural areas suffer excessively from this exclusion.
“In order to accelerate the electricity service to unserved areas we need to approach this issue from both the top-down [expansion of grid] and bottom-up [local off-grid solutions] directions,” Schlettwein said.
He added: “Apart from the obvious environmental positives, embracing renewable energy sources would be extremely healthy for us from a price stability point of view.”
The inability to produce sufficient electricity within the country severely hampers domestic economic activity and value addition, while the energy imports expose Namibia to high electricity prices and currency rate fluctuations, media stated.
Renewable energy to meet power demand
According to media, Namibia’s peak electricity demand at present is close to 650MW and the country relies heavily on energy imports from its neighbours.
Depending on the time of year, it imports between 40% and 80% of its energy requirements.
In addition to this demand, a recent assessment made by the African Development Bank shows that Namibia’s power demand is projected to grow at close to 9.5% a year between 2015 and 2020.
Electricity projects for the unserved population
It is reported that the electrification rate in Namibia is slightly above sub-Saharan African averages; however, it is said to still remain well below the average across developing countries, and even Africa as a whole.
“I believe that when we think of the price that we pay for deficiencies with respect to provision of services, the social costs of the unserved population needs to be at the forefront,” Schlettwein said.
“It is well understood that the coping costs of lack of basic infrastructure is often several times more than the commercial cost of providing such infrastructure. Absence of reliable and affordable electricity supply perpetuates a negative spiral of reduced economic opportunities and poverty.”
He noted that the availability and affordability of electricity was an important factor in attracting investments.
However, Namibia exhibits electricity tariffs that are higher than most countries in the southern African region, media reported.