REIAoN letter to ECB regarding "Net Metering" regulations for Namibia

The Renewable Energy Industry Association of Namibia (REIAoN) – Open letter to ECB:

Following our board meeting on 15 May 2013, we strongly want to utter the following comments and reservations concerning the latest version of net metering rules:

1. The newly revised proposal for net metering will only foresee compensation for export credits based on the avoided-cost method and no more “1 to 1” compensation for residential clients as proposed earlier. This goes together with abandoning single-register meters.

2. Especially since residential client generators are mostly exporting electricity during the day while consuming during night time, this revision makes net metering much less attractive as compared with “1 to 1” compensation. Residential systems will not be viable if the credit based on avoided cost will be too low.

3. It is therefore of utmost importance for the success of the up-coming net metering scheme that the calculation of “avoided cost” is done in a very transparent and clearly defined way. Investors need predictability for their business plans. It would be totally inappropriate to use the bulk price at which distributors are buying electricity. Avoided cost has to be calculated based on the distributor’s selling price to the client plus a small credit for avoided grid losses and minus a small fee covering the grid wheeling cost to transmit surplus energy from exporting clients to their neighbors (for selling by the distributor).

4. The current tariff (N$ 0.96) which ErongoRED volunteers to pay for excess power must therefore seen as a minimum indicative price when it comes to fixing the price based on avoided cost.

5. In order to provide participation for lower-income clients, our members also point out that prepayment-metering should not be excluded from net-metering and request that suitable meters and procedures should at least be evaluated.

6. Shielding electricity distributors against losses in revenue has to be weighed against the viability of net metering. It would prolong a long-standing legacy of barriers against investments in renewable electricity generation. Any interventions by distributors – causing the massive changes between the last 2 workshops – have not been communicated openly.

7. If the new legislation on net metering is to be supportive with regard to alleviating the Namibian supply gap the above mentioned points will have to be addressed effectively.

We trust that our concerns will be heard and the final proposal communicated transparently.

Yours sincerely,
Conrad E. Roedern, Chairman REIAoN


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