In short, Namibia needs power and needs it soon, and the Walvis Bay Power Plant project is in a position to deliver power in 2017.
We are confident of being able to produce the first power within six months of signing the PPA as we have already completed much of the preliminary groundwork. This includes the issuing of environmental impact assessment certification, largely completing the geotechnical studies, designs and due diligence, and conducting the studies related to the floating storage and regasification unit (FSRU). Furthermore, General Electric has already manufactured the first two gas turbines for the plant, and the essential components for the floating storage unit have already been secured.
As is the case with any project this size, once operational the Walvis Bay Power Plant will have an induced economic effect through its revenue, wage bill and procurement of local goods.
A major benefit of LNG import fuel is that it can be sourced from a variety of suppliers. The liquefaction process includes a gas pre-treatment step, which ensures that any LNG import cargo is suitable for use regardless of its source. The project partner that will secure the gas for the Walvis Bay plant has no fewer than 75 master agreements in place with suppliers.
Price is another important factor. Natural gas has better pricing dynamics than Brent Crude oil (from which heavy fuel oil is made) because the market is diverse and less centrally driven.
Compared to coal and fuel oil, natural gas has a significantly lower emission footprint. This includes lower carbon, lower sulfur oxides and lower nitrogen oxides.
In addition, natural gas is safer. Escaped gas does not cause any soil or marine contamination.
The new plant will effectively increase the treatment capacity of the Walvis Bay WWTP by almost 50%, without the WWTP having to contribute capital outlay, and provide significant operating flexibility and redundancy to the existing plant.
Other benefits include making excess water produced available for town use and to supplement the water sources at the Bird Paradise Wetland. In fact, the plant will supply sufficient water (3 100m³ – 4 000 m³ per day) to allow this 20-hectare sanctuary, which supports about 20 000 birds at any given time, to flourish.
Importantly, no fresh water will be used in the production of power but a nominal amount of fresh water for domestic purposes will be supplied by the Municipality.
The tariffs themselves are fair and reasonable. Namibia would not be able to import electricity for a lower tariff, nor would the country be able to produce electricity at a lower tariff with the same benefits.
The project could also be a catalyst to position Namibia as a leader in the development of a national and regional LNG industry. This is possible in that the Walvis Bay Power Plant will use only 20% of the LNG that its floating storage and regasification unit is able to hold, leaving considerable spare capacity that could be put to productive use. Using the project’s gas storage and transportation infrastructure, natural gas could be supplied to independent power producers, factories, mines and households. Namibia would even be in the position to export natural gas to other SADC countries seeking to diversify their power supply.