From Energy Consumer to Energy Prosumer

by Conrad Roedern

In Africa the case of modern energy provision is a special one. Our currencies (and incomes) are about 10 times weaker than those of the developed world, which is mainly in control of the finite resources. But we have to pay the same price if we want to use these commodities. The majority of African countries spend most of their income earned from export on fuel imports. Many among them spend more than that, i. e. these fuel imports are partly paid from development aid monies. This often enriches small elites connected to importing and distributing fuels while leaving disastrous consequences concerning countries’ chances of real development. Renewable Energy (RE) – on the other hand – is typically harvested on home grounds and makes use of the national surface area. So it can be called an indigenous asset. Power stations built on solar and wind also have a much higher “local content” if compared with gas-, coal- or nuclear stations. That means not only the power station but also its operation yields huge benefits in terms of important factors like money outflow and job creation. One must therefore ask again if Namibia’s development based on finite fossil energy would be a sound foundation on which our long-term visions can be achieved. Our politicians talk so much about “value adding” when it comes to exporting products from Namibia and they rightly do so. But at times when we hit the three existential limits of the fossil based energy system – depletion of fuel, climate-incompatibility and rising violence for finite resource access – the added value from our own renewable energy sources is not adequately recognized.

Time and again we must look at the trade-off between national energy autonomy versus larger regional power pools, the latter being based on costly power lines or other means of transport for energy. National energy autonomy based on a renewable energy scenario will assign funds for the development of rural areas and centres immediately. A power pool will require costly infrastructure before the first hut in a rural area is electrified. Power Pools technically allow the import and export between countries. In practise they often create unhealthy dependencies. Everybody will import from the current cheapest exporter and neglect the development of own generating capacities. Namibia had to learn a lesson after the power purchase agreement with South Africa had to be renegotiated and sufficient excess energy from this country ceased to be available. A forgotten bolt in a nuclear power station near Cape Town has strong repercussions for the availability of electricity in Namibia.

Energy in the hands of many

On all levels of the electricity supply chain (NamPower, REDs, municipalities, end users) we see a growing move to generate electricity using renewable resources with PV Solar seeing currently the greatest increase. This trend will gain momentum whenever it is cheaper to produce than to buy. This “bottom-up-approach” will keep a large amount of the current money outflow for imports available inside Namibia. The argument of threatened grid stability needs to be put into perspective: as long as these distributed contributions are adding up to less than 80 % of the minimum base load, they will not pose an unmanageable task to control the current infrastructure.

imports

Imports declining: a new supply structure for Namibia (Courtesy AMUSHA Consultancy Services)

How will Namibia’s transition to 100% RE look like?

Looking at energy in general, the electricity sector would be the starting point since it could undergo the easiest conversion to 100% RE. Already now some 40% of our electricity already stem from renewable energy in the form hydro power while the rest has to be imported, resulting in a yearly outflow of more than 2 bn N$ and costly investment into the required power line system.

The following corner stones will characterise this transition:

1. Electricity as an energy source will gain importance (electric cars, information technology)
2. Re-allocation of funds form the fossil to the renewable sector
3. Reform of the centralised supply industry encouraging distributed generation
4. Introduce bio mass, e. g. harvesting of invader bush, as large scale “job creator”
5. Reforming the Namibian agricultural sector for harvesting bio mass and electricity
6. Embracing storage technologies and making provision of storage a profitable business
7. Embracing demand side management to ease balancing of supply and demand
8. The electricity market must be changed to also remunerate distributed capacity provision
9. Embracing small and large scale business creation based on RE
10. Bringing the energy (thus comfort and attractive life) to the rural people and not vice versa
11. Reforming the Namibian transport sector by utilising RE-propelled mass transport
12. Reforming the Namibian industrial sector in terms of supplying RE and RE systems

Many remote areas of Namibia are just too far from the grid for a power line connection to make sense. To make an energy service for these regions available, Namibia currently has a diversified strategy which requires further development. It ranges from an infrastructure of “Energy Shops” and Solar Home Systems to Solar Diesel mini grid installations. The wireless cellular telephone service shows the way forward: just as the modern telephone comes without wired lines this becomes true for electricity as well. Nobody would dare to ban cell phones in order to protect a telecom monopoly of land lines. If NamPower puts panels on their roofs in order to reduce their bill with the City of Windhoek basically everybody can do it. With the share of RE rising our electricity supply needs to acquire the following properties: The existing interlinked grid net work, augmented with national RE generation capacity will take up the new combined function (“smart grid”) for distribution and “harvesting” of electricity generated by renewable means, thus allowing an income for everybody including farmers and small dwellers.

rooftop-solar

The roofs are clad: NBLs 1.1 MW PV system

With installation times counted in month rather than years, several entities in Namibia are running PV solar power plants on their premises. Just recently Namibian Breweries inaugurated their own plant producing 34 % of their electricity demand with their roof-mounted 1.1 MW PV generating system while a Namibian supermarket chain equipped 13 of their markets with a total of 1.5 MW, just citing 2 prominent examples from a vast multitude of installations, including two PV plants on the head quarters of NamPower and one on the Ministry of Environment and Tourism respectively. Based on an “educated guess” by the REIAoN, the Renewable Energy Industry Association of Namibia, in Windhoek alone an estimated aggregated 6 to 7 MW of grid connected PV solar systems are in place (producing annually between 11 and 13 GWh or “Giga Watt hours”, representing about 0.35% of Namibia’s demand per year) while countrywide more than 200 of these systems are connected to the grid. By the end of 2014 Namibia will produce close to 1% of its demand from some 16 MW of installed on-grid PV-Solar generating systems.

The current transition: from energy consumers to energy “prosumers”

In a nutshell: Namibia’s electricity sector is undergoing swift changes towards de-centralised generation in the hands of many. Some of the traditional role players have at least noticed this but to date most of them failed to pro-actively address this ever-increasing trend. They react with fear and protectionism. A proactive minority – like ERONGORED and CENORED – fortunately has addressed the issue by introducing buyback tariffs to reward excess electricity from prosumers. This will become the order of the day. Nobody (except for a harsh dictatorship) can stop people to produce their own power once the means are available and economically competitive. The times of electricity just being sold by utilities, regional distributors and municipalities as plain “cash-cow” business have come to an end. In future these entities have to acquire the roll of smart grid operators, running own renewable energy plants while managing distributed short and medium-term storage capacity. These new tasks are swiftly gaining importance and on the grounds of this importance they constitute a profitable business once they are understood and the necessary institutional and legal framework is in place.

REIAoN

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