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Introduction
It is not that long ago, that we only had candles... they were used to light our homes before the industrial revolution. Wood or coal fires provided heat for cooking food and for keeping us warm. Walking was then the only form of transport for most people.
Since then, however, vast arrays of energy devices and systems have been developed and these transform energy from sources provided by nature (coal, oil, gas, wind, sun and nuclear fuels) into other forms that we can use.
A constant and uninterrupted flow of energy is now more important and fundamental to the quality of our lives than ever before. Most of the world is totally dependent on the supply of energy for living and working and it is a key ingredient in all sectors of modern economies. We use energy constantly at home, at work and for leisure ranging from lighting, domestic appliances, televisions, computers, etc. to factories to power the manufacture of the products we use everyday; in cars, trucks, ships and aeroplanes to transport people and goods. Energy maintains our standard of living and economy and we have come to take it for granted that energy is available whenever we want it.
As the population grows, so the demand for energy grows and as countries become more developed, more sophisticated networks for supplying the country with energy becomes a focus for the governments. This has also been the case in Namibia.
In the past, a large number of individual distributors (almost 50) ensured that the majority of Namibians enjoyed the advantages of electricity. This was not practical for a scarcely populated country like Namibia and lead to the loss of economies of scale. It furthermore led to an abundance of electricity tariffs, often not cost-reflective, with resulting efficiency losses and a large difference in quality of supply and service to customers amongst the multitude of distributors. There was also diverse financial performance amongst the various electricity distributors and a lack of adequately skilled and experienced human resources. Lastly, many of the distributors were financially not capable of making the necessary large investment requirements in the short to medium term.
The Government establishes the RED’s
The Government of Namibia then decided to establish the RED’s or regional electricity distributors. The Energy White Paper was developed by the Ministry of Mines and Energy and published in May 1998. Two years later, in 2000 the Electricity Act was promulgated. This Act established the Electricity Control Board (ECB) which regulates electricity related matters such as the licensing of all companies or institutions involved in the generation, transmission, distribution, supply, import/export of electricity and the approval of tariffs. The energy policies contained in the white paper were designed to achieve the following goals: Effective Governance, Security of Supply, Social Upliftment, Investment and Growth, Economic Competitiveness and Efficiency & Sustainability.
The Ministry of Mines and Energy, custodian of all electricity matters, conducted studies to determine the best way to re-arrange the electricity supply industry. After some extensive consultations with the relevant stakeholders it was agreed that the distribution of electricity in Namibia will be done by five Regional Electricity Distributors of which Erongo RED is one.
Advantages to the RED’s
There are numerous advantages to the RED’s, some of the most important which include the fact, that economies of scale will lead to lower electricity prices to the electricity consumers; the pooling of human, operational and capital resources will lead to reductions in cost and a company specializing in only electricity distribution will be better focused to meet the current, significant distribution challenges.
Through the above competitive advantages, REDs will be in a much stronger position to address the problems in the distribution industry than the current fragmented EDI players, thus having the greater potential in bringing quality, uniformity, viability and sustainability to the electricity distribution industry in the long term.
Erongo RED is born
Erongo Regional Electricity Distributor Company (Pty) Ltd, commonly known as the Erongo RED was established within the context of the Government’s National Development Plan and envisages a dynamic and efficient commercialized Electricity Distributor for the Erongo Region. Erongo RED’s inception took place on 1 July 2005 and the company assumed responsibility for the Electricity Revenue Management Services of the Walvis Bay customers from Monday 22 January 2007.
The shareholders of Erongo RED are the municipalities of Walvis Bay, Swakopmund, Arandis, Usakos, Omaruru, Henties Bay, Karibib and the Uis Village Council, as well as NamPower and the Erongo Regional Council. Currently the company has 47 959 customers, of which 22 075 are in Walvis Bay, 14 723 in Swakopmund, 3 183 in the remainder of the towns, whole 7 095 comprise pre-paid and sundry and 253 are found in rural areas.