Namibian national electricity utility, NamPower, has approved the Renewable Energy Policy Paper which states that the company’s target for the renewable is 10% of the total installed capacity and the first target is 40 MW by 2011. Namibia has undertaken several energy savings measures such as special tariffs for big customers, introduced directive to install solar water heaters to all government buildings and introducing independent power producer concept and supporting development of the energy from the bush encroachment, introducing solar/diesel hybrid mini-grid system and the options for windpower generation.
About 80% of all rural households in Namibia rely on wood fuel as their main source of energy (FAO). The population in Namibia is small and dispersed with the more densely populated areas in the north and, on the other hand, with vast and thinly populated areas in the south. Consequently grid extension is very costly. Considering the situation of deforestation in Namibia and limited possibilities for grid extension, energy efficiency improvement and alternative rural energy solutions are needed. Some piloting activities have already been carried out with government support.
Namibia is very dependent on imported electricity from non-renewable energy sources. In 2008 the imported energy counted 52% of the remaining local generation 48% about 88% was produced by hydropower. The peak load in 2008 was about 430 MW. In 2008, the Namibian cabinet decided to aim for self sufficiency in electricity generation and to reduce the dependency on ESKOM in South Africa. Namibia is already cooperating with Zambia, Zimbabwe and DRC on alternative supply options. The country has some natural gas resources and exploration for gas and oil resources on the coast is ongoing. Hydro power has significant potential for further exploitation but large scale plans for hydropower scheme establishment have raised political arguments with Angola, South Africa and Botswana over the decades.
Through the Energy White Paper of 1998, the Government has committed itself to introducing renewable energy sources: The Government will promote the use of economically viable renewable energy technologies to improve energy access in rural areas, as a complementary supply option to grid electrification. However, under current pricing the cost of using renewable energy is initially still higher than alternatives for rural customers. The Ministry of Mines and Energy of Namibia has introduced a revolving fund to support solar energy usage for off-grid purposes to lower the threshold for RE investments. Furthermore, all imports of solar equipment has been relieved from import duties.