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February 22, 2013

Namibia Seeks Energy Independence



Namibia, a nation of 2.1 million people in southern Africa that fought for and achieved freedom less than a quarter of a century ago, today is battling on another front—this time, for energy independence.

A report just released by New York City-based Frost & Sullivan (News - Alert), “The Future of Namibia and Energy,” finds that the Republic currently imports over half of its total electricity. But researchers point to the discovery of the Kudu gas field—in an Atlantic offshore sub-basin about 110 miles northwest of the city of Oranjemund—as a potential game-changer.

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The field is estimated to contain at least 1.3 trillion cubic feet of proven natural gas reserves, as well as oil resources, both of which would enable the Namibia to achieve greater energy self-sufficiency and reduce its dependence on imports.

"A breakthrough in the oil and gas sector in Namibia, which is relatively underexplored, holds enormous potential for the country," noted Frost & Sullivan's Energy & Environmental Research Analyst Muneera Salie. "If these resources are proven to exist, it could result in the country becoming one of the richest in Africa in terms of GDP per capita within the next five to 10 years."

Rapid growth of the oil and gas sector is expected over the next five years, with the exploration of six to eight new wells commencing within two years. At the same time, development and production from the Kudu gas field will be driven through the expansion of the country's export market – as well as the planned production of gas-fired, combined-cycle power plants in the region.

Economic growth also could be boosted by the expansion of Namibia's mines, particularly its uranium mines, as well as the production that is expected to occur from new mines. In turn, mine expansion should trigger the need for more electricity generation, encouraging growth in this sector.

While these are positive signs for Namibia, major challenges persist. Namibia will urgently need a new base load power generation facility by 2016. Easier said than done; Delays are usually common when securing finance for large projects such as this.

"A base load facility is expected to be commissioned within the next five years," noted Salie. "Tried and tested technologies in the form of power generation from fossil fuels are likely to be used, as these projects can be fast-tracked and would obtain finance more easily than renewable energy projects, even though these are favored."




Edited by Braden Becker
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