• Market Watch

Electricity supply improvement sought

• 1 Day Ago - 2025-02-04 00:00:00

The Electricity Control Board (ECB) is making progress in its efforts to improve the framework to manage performance in the electricity supply industry in Namibia. At present the 2014 performance management framework is still applicable.
Last week the ECB played host to local industry players at a workshop to further flesh out the proposed framework update. At the opening of the event ECB chief executive officer Robert Kahimise stressed the importance of collective effort in shaping a resilient and efficient energy sector.
“Our focus remains on optimizing operational efficiency through industry restructuring, robust performance evaluation, and continuous monitoring,” he said. According to Kahimise, the ECB mandate includes the development of tools and frameworks to enable operational efficiency, improve performance and enhance governance within the industry.
“Equally vital is our commitment to maintaining high standards in supply and service quality, with due consideration for varying quality standards and associated costs,” he added.
“This workshop is particularly timely as we continue to develop the Namibia Energy Regulatory Authority (NERA) Bill, which seeks to strengthen the regulatory framework and enhance compliance mechanisms within the electricity sector. Once enacted, this Bill will provide the
ECB with enhanced enforcement powers and promote greater accountability and effective management across the industry. These measures aim to ensure a transparent, efficient and sustainable electricity supply industry,” he said.
During the workshop GET.transform did a presentation of global best practices and where the applicable Namibia performance management framework can improve. In conclusion the presentation highlighted the need to strengthen data governance and enforcement mechanisms to enhance accuracy and analysis. It was advised that Namibia consider transitioning towards an incentive-based regulation tailored to an optimal local energy mix and achievement of sector goals and objectives. It also advised driving renewable energy integration, benchmarking key performance indicators against global standards, leveraging digital tools and systems to streamline governance and enhance transparency, and to place more emphasis on capacity building through continuous workforce training.
The European Union funded GET.transform initiative presented case studies where performance based regulation has been implemented in South Africa to optimise maintenance scheduling and improve plant availability. In Uganda bonus mechanisms encourage utilities to pursue productivity gains, using predictive analytics to isolate inefficiencies in grid operations, and adopting smart meters and grid automation to improve megawatt/hour delivery per employee. Tanzania’s incentives include expedited tariff processing for utilities with high compliance rates. In Ghana the national electricity company introduced prepaid metering systems, customer-centric outage management and performance-linked revenue mechanisms to counter high distribution losses and inefficient operations. Distribution losses there decreased from 23% to 14%, revenue collection increased by 30% and customer service reliability increased within five years, according to the research. Lessons for Namibia include introducing mechanisms to recover prepaid meter costs and expand smart grid technologies, tie performance indicators to revenue incentives, and to monitor and publicly report on efficiency in the industry for transparency.
Among challenges highlighted, limited access to timely data was found to be caused by manual data submission, limited enforcement of standards and limited reporting from non-compliant licensees.
The Namibian electricity supply industry operates under pressure following declining local generation capacity, particularly in regard to the crucial Ruacana hydro-electric power station which generated 20% electricity in 2022. Meanwhile independent power generation has increased with 228,6 MW installed capacity by 2024. Namibia still relies on electricity imports from South Africa, Zambia and Zimbabwe to satisfy up to 60% of the 600 MW plus peak demand. Two of these power purchase agreements expire this year, while cost reflective tariffs leave Namibian electricity prices as the highest in southern Africa. Mandated industry goals include increased access to electricity, increased affordability, increased security of supply, reduced imports, improved efficiencies, more sustainability and more competition as well as increased contribution from renewable energy sources.