RENEWABLE ENERGY

Namibia benefits from an abundance of renewable energy resources namely solar, wind and biomass, and is home to a well-established electricity supply industry (ESI). The country boasts the world’s second highest solar and wind regimes, with a technical wind potential of over 100GW, making it one of the windiest places in the world with a capacity factor of around 50%. In addition, Namibia has a large capacity of rangeland and biodiversity which makes it suitable for the accumulated biomass opportunities from bush thinning, creating an economically viable resource for value addition opportunities. In addition, the development of a green hydrogen industry, which will rely heavily on renewable energy, is under way. Currently, renewable energy, other than large hydro, only accounts for a small amount of the installed capacity in the country, leaving substantial scope for its development to its full economic potential. 

Despite the immense potential for renewable energy resources, the country remains a net importer of energy due to a number of reasons. The Namibian economy currently consumes about 640 MW of power per annum. A large part of this energy is imported from neighbouring countries and via the Southern African Power Pool (SAPP). NamPower, the power utility, imports between 50% and 60% of the country’s energy requirement.  

The most dominant sub-sector of energy in Namibia is the liquid fuel which includes petrol and diesel and accounts to approximately 60% of total energy net consumption, followed by electricity with around 20% net consumption, coal with 5% and the remaining 15% is from other types of energy such as solar, wood, and wind energy among others.  Due to the geographical vastness of the country, the transport sector consumes a proportionately large amount of energy via petroleum products. 

While Namibia does not produce oil at the moment, major international oil companies such as Total Energies, Shell, Galp Energia, Chevron and Exxon and many others, have since 2022 announced strong prospects for hydrocarbons off the country’s coast, particularly in the orange basin. By January 2024, there were four drilling rigs operating in Namibian waters, namely the Deepsea Mira, Tungsten Explorer, Deepsea Bollsta and Maersk Voyager. These rigs are busy appraising the discoveries to determine how much oil will be able to flow to the surface as well as explore further the potential of the blocks. The Lüderitz, Walvis and Namib Basins are also highly prospective and share many characteristics of the Orange basin yet remain relatively underexplored. Onshore, the Owambo and Nama basins are also underexplored, while exploratory drilling in the Kavango sub-basin has indicated the presence of an active petroleum system that could hold up to 30 billion barrels of oil. 

Namibia’s high electricity imports has exposed the country to high prices in the past and represents a real risk in the future, given that the entire region is grappling with electricity shortages. For this reason, the country has adopted a Modified Single Buyer (MSB) market model to allow more Independent Power Producers (IPPs) to invest in energy generation and hence to foster growth in economic activities.