By Susan Kraemer

CSP Today: I understand that NamPower is considering a Concentrated Solar Power (CSP) project that is to include storage. How far are you along in this deliberation?

Mutschler: The concept was already considered and studied in 2010, with the findings captured in a pre-feasibility study conducted by the Ministry of Mines and Energy.

The pre-feasibility study in 2012 identified 20 possible locations and through the application of various criteria and ranking thereof, this was narrowed down to 5 sites.

Towards the end of 2014 NamPower together with its project partners reviewed these priority locations by considering the criteria that maximizes the value of the first plant in the Namibian network. These areas are located close to the main load centers and main transmission substations of NamPower.

CSP Today: What size are you considering and when will you finalize the locations?

Mutschler: The project size investigated is between 50 MW and 200 MW. The final locations will be selected following the conclusion of the Environmental Impact Assessment (EIA) scoping phase, as per legislative requirements in Namibia.

CSP Today: What are the current electricity and grid challenges for Namibia?

Mutschler: Namibia has great renewable, and specifically, solar potential. However, due to the nature of its loads (dispersed across large areas), the unavailability of cheap or easy fossil fuels, the lack of generation power stations close to load centers, etc, it has to manage complex grid stability challenges.

These challenges are exacerbated by the introduction of uncontrollable, intermittent supply options on top of the current run-of-the-river hydro power station.

CSP Today: What is your general thinking on CSP with storage?

Mutschler: Solar is included in the renewable energy policy. However, if the solar plants are intermittent with no storage facility, the capacity to be connected to the grid is limited in order to protect the grid’s stability.

It is common knowledge that the CSP technology is still expensive in a basis of a cost-at-plant-gate comparison. However, Namibia is optimistic that the CSP technology brings good value and if compared at a “value addition to the supply mix and grid stability” it might be highly competitive.

The value of ancillary services by CSP with storage to assist the transmission grid to absorb more photovoltaics (PV) or wind should not be neglected. In addition, the macro and socio benefits of localization will definitely contribute to a positive NPV for the country.

CSP Today: What specific needs in Namibia will be addressed by CSP with storage?

Mutschler: CSP power stations will help alleviate the supply shortage currently being experienced. As CSP plants can be located close to load centers, it will reduce transmission losses, increase grid stability and avoid/delay transmission grid upgrades.

As the dispatch of power from CSP plants (with storage) can be controlled, it allows for an optimal supply mix to the consumer. It can provide ancillary services to the grid and other supply options and help safeguard against power shortages due to extended droughts or dry periods.

The implementation of CSP has huge macro-economic, as well as socio economic, benefits: It eliminates reliance on import fuel, it eliminates forex risks on import fuel, it improves the Balance of Payments and due to the large local content component, it creates jobs and stimulates local businesses.

CSP Today: Are you leaning towards power tower? Or parabolic trough?

Mutschler: We are at this stage technology agnostic. The first phase of the feasibility study will determine the project description and technology selection for the first plant.

CSP Today: What is Namibia’s current electricity requirement and when are your peak loads?

Mutschler: The maximum demand registered during the winter of 2014 was about 630 MW (with the Skorpion Zinc Mine).

Namibia has a very dominant evening peak and a lesser dominant morning peak.

CSP Today: Is demand mostly residential - or from mining and industrial development? What is your growth expectation?

Mutschler: The load profile constitute residential as well as industrial and mining. Mining step loads (in or out) has an impact on the supply planning.

The expected load growth is influenced by organic growth of existing loads, the addition of rural electrification and additional step loads as a result of industry and mining development.

The moderate growth expectation is about 4%, with the high at about 6%.

CSP Today: How much storage are you looking for and what are your needs?

Mutschler: The storage will be determined by the optimal dispatch requirements in the supply mix. First indication seems to be more around 6-8 hours. This will be confirmed through modelling and analysis.

CSP Today: What are the available funding sources and what must be taken into consideration?

Mutschler: The funding sources are mainly influenced by the maturity of the technology and the feasibility of the project.

NamPower has procured loans from commercial banks, development banks as well as through bonds for its projects. It has experience in procuring grant funding, concessionary funding, commercial funding as well as to use development banks or Economic Capital Assessment’s to underwrite the risks in projects and therefore to lower the cost of funding.

As the capital expenditure (CAPEX) on a CSP project is high, and one of the best ways to ensure feasibility is to lower the cost of funding, Namibia will investigate ways to ensure the lowest cost of funding possible.

CSP Today: Have you decided how you will be handling procurement - with competitive Independent Power Producer (IPP) auctions like South Africa? Or might NamPower contract for and own the project?

Mutschler: Namibia has adopted a range of procurement strategies for the procurement of renewables. It believes the first CSP plant will provide for investor comfort, and therefore has decided that NamPower will lead the development thereof.

The procurement for the project will be on a competitive base regardless of whether it be the procurement of an IPP, a public-private partnership (PPP) partner or just an EPC Contractor.

The mechanism to procure future CSP projects is still to be decided, and the decision will be informed by Namibia’s policy on transparent and fair competition.