Small increase in NamPower tariffs

Funds set aside for renewable energy

30 April 2021 | Energy

The Electricity Control Board (ECB) announced that it has approved an increase of 2.92% in the average bulk electricity tariff after an application by NamPower to review their rates.

The increase comes after a two-year period of no bulk tariff increases and is effective as from 1 July 2021.

The ECB said that NamPower had submitted an application for a bulk tariff increase of 5.8%, which is an increase from an average of N$1.6698 per kilowatt-hour to N$1.7673 per kilowatt-hour. However, following considerations that include the impact that an increase will have on the supply industry, consumers and the economy at large, the ECB approved an increase to N$1.6982 per kilowatt-hour

The approved tariff is applicable to NamPower bulk customers, namely Regional Electricity Distributors (REDs), Local Authorities, Regional Councils and mines, who will individually have to apply to the ECB for a review of their own distribution tariffs, which – if approved – will be applicable to end-consumers.

In a media release, chief executive Foibe Namene said the ECB is cognisant that the economy is still struggling. “To mitigate the impact of the tariff increase on consumers, an amount of N$35 million is allowed to be used for variable operation costs of the thermal plant by NamPower from the Long Run Marginal Cost Fund.”

This fund is intended to ensure a smooth tariff path for the future, especially when NamPower is experiencing cash flow challenges. It may also be used to cushion customers from unexpected tariff hikes or in situations where the economy is depressed, or to build new power plants.

Along with this, the ECB announced that N$500 million has been allocated from the available N$576 million Long Run Marginal Cost Fund to partially fund the construction of NamPower’s renewable energy plants.

“N$342 million has been allocated to the 20MW Solar PV plant currently under construction at Omburu, while the remaining N$158 million will be used for part funding the 50MW NamPower-owned wind plant to be procured soon,” Namene said.

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