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dam-l Epupa Story, WRR/LS (fwd)
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From owner-irn-safrica@igc.org Mon Jun 15 22:18:37 1998
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Date: Mon, 15 Jun 1998 17:06:00 +0100
From: lori@irn.org (Lori Pottinger)
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Subject: Epupa Story, WRR/LS
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The following article appeared in the April 1998 issue of World Rivers
Review, published bimonthly by International Rivers Network. Please do not
reprint without permission. If you would like to post it on a web site,
please contact me first. Thanks, Lori
NAMIBIA: Good Energy Alternatives, Bad Economics May Kill Epupa Dam
by Steve Rothert
On a hot day in late January and with the sound of Epupa Falls in the
background, Himba Chief Hikuminue Kapika rose to address the two dozen
people gathered around a table overlooking the Kunene River. "Epupa Falls
was created by God," he said. "When God made the falls, he left his
footprint in the rock below. Now the government wants to build the dam and
cover God's creation. Government should not try to go beyond God."
With its 380-square-kilometer reservoir, the proposed Epupa Dam would
inundate this meeting place and a broad swath of the surrounding river
basin. The dam would force the relocation of 1,000 people and affect more
than 10,000 through the inundation of grave sites, 18,000 hectares of
grazing land, and thousands of riparian palm trees which produce omarunga
nuts, a critical food source for the Himba during times of drought. At 160
meters high and 570 meters across, the dam would be one of the largest in
Africa (a second proposed site, called the Baynes Scheme, would result in a
200-meter-high dam - the largest in Africa). Despite its enormous size,
however, its maximum potential capacity is only 360 megawatts (one megawatt
can supply 1,000 average homes in the US).
The spiritual importance of the landscape is just one of many reasons the
Himba oppose the Epupa Dam. At the January meeting, the community finalized
its position on the proposed dam in preparation for a February 7 public
hearing on the project.
"The traditional leaders think the dam is not in the best interests of
Namibia nor of the communities they represent," the statement begins. "We
question the need for the electricity, and ask if there are options that
would not destroy the Himba economy, culture and grave sites." The
statement further requested a meeting with the government to discuss
development options for the region that would be less harmful to their
culture and way of life.
Himba leaders have named some of the more important meetings about the dam.
The gathering at which they were first informed of the dam's size,
complexity and major impacts is known as "katu tjiwa," or "we did not
know." The meeting to finalize the community's opposition to the project
was named "katu tjitire," or "we will not die," to express their conviction
that they will not forfeit their lands and livelihood.
Project Faults Detailed
The Himba are not alone in their critique of the Epupa scheme. The
project's economic, environmental and technical drawbacks have been
highlighted by a number of critics, both inside Namibia and
internationally. A team of outside experts volunteered to review the
project feasibility study for local environmental groups; the review was
coordinated by IRN, and comments delivered to the government in January.
The review team - which included a lawyer, hydrologist, economist,
ecologists and other technical experts - found numerous problems with the
project as described in the Feasibility Study, which was released in
October 1997. In addition, critiques of the project's social, environmental
and economic impacts were lodged by government officials, local NGOs and
concerned citizens.
One particularly alarming impact for the arid region is that the reservoir
would evaporate up to 630 million cubic meters of water each year - more
than the total potable water supply in Namibia. Yet he cost-benefit
analysis in the project Feasibility Study gave absolutely no value to this
huge volume of water - even in the shadow of Namibia's worst water supply
crisis, and as the government plans a US$600 million project to extract
water from the Okavango River. "The external costs of evaporative losses
must be set at nil due to a lack of alternative uses for this water," the
study states.
The Feasibility Study was widely criticized over this issue. Scientist Hans
Eggers wrote in a review of the study, "The Kunene represents a priceless
water reserve. The huge evaporation loss and the desperate need for water
in Namibia alone should conclusively eliminate any proposal to build a dam
which does nothing but waste this reserve."
Economic Consequences
The Epupa hydropower scheme not only wastes valuable resources like water
and land, but involves considerable risks - many of which would impact the
project's bottom line.
One of the biggest risks for Epupa is already plaguing the Ruacana Dam
upstream: too little water in drought years to fully power the turbines.
The industry publication International Journal on Hydropower & Dams
reported late last year that Ruacana is currently operating at just 13
percent of its installed capacity due to "falling water levels in the
Kunene River." Since Epupa's economic viability also depends on the
reliability and predictability of the Kunene River hydrology, at least
several decades of stream flow records are needed to make reliable
predictions about its long-term profitability. However, since no
hydrological record exists at either of the proposed dam sites, the
Feasibility Study uses a "synthesized" a data base to predict future flows
and assess the project's viability, based on a 12-year hydrological record
from a site 200 kilometers upstream at Ruacana and a longer record from the
Okavango River.
There are several serious problems with using such a synthesized data base.
The two systems could be different in significant ways that are not readily
apparent. Also, recent evidence suggests that flows in the Kunene basin are
decreasing. Finally, the Kunene River's great variability in flows,
including consecutive years of low flows, could delay the project's start
of power production due to drought-induced delays in filling the reservoir.
Delays in the project's start-up date would affect its economic viability.
Based on the worldwide record, a project the scale of the Epupa (which
would be among the largest dams in the world) could typically experience at
least a one year delay and, conservatively, a 10 percent cost overrun. The
feasibility study states that such a delay and overrun would drop the
project's return below 10 percent, and thereby fail the study's own test of
the project's economic viability.
Project economics also depend on the financing package negotiated. At N$2.5
billion, the cost of the project is equivalent to one-fifth of Namibia's
1996 Gross Domestic Product. Undertaking this project would increase the
government's annual expenditure on capital investment by more than four
times. Windhoek-based independent economist Robin Sherbourne says, "This is
a very large project in relation to Namibia's population and economy, the
risks of which would be borne by the Namibian government and people if
financed with public funds. Even if privately financed, the Namibian people
would not escape the project's risks because the government has committed
to underwriting the financing package." Steve Rivkin, the economist on the
NGO review team, concluded, "I do not believe that it passes the narrow
test of economic viability using only the quantifiable costs and benefits,
much less so when all costs and benefits are considered."
Because of the risks inherent to large hydro projects, Epupa has a high
probability of low economic returns. Any potential investor, public or
private, closely examine the region's power market to ensure sufficient
demand exists to justify the project. With South Africa currently exporting
power at less than half the estimated cost of Epupa electricity, and with
the Kudu gas power station promising to produce twice as much electricity
as Epupa at a lower cost, finding a buyer for the dam's electricity might
prove difficult.
Exploring Alternatives
Much has been learned about the Kudu gas field since the Epupa study got
underway. According to the Epupa study, the 750-MW natural-gas-fired power
plant would be able to supply electricity at a lower cost than the Epupa
scheme, and would satisfy Namibia's capacity needs until 2020. In addition,
the risk of the gas project would be borne by the private sector, not the
Namibian people. The first phase of the gas feasibility study should be
completed by June.
The Namibian government is currently studying the feasibility of
large-scale wind and solar power production. Namibia has the highest solar
energy potential in the world, and considerable wind resources along its
lengthy coast. Preliminary results of wind-velocity monitoring at two
coastal sites suggest wind power could play a significant role in meeting
Namibia's power needs. Wind gauges in Walvis Bay have clocked an average
velocity of 6.5 m/s, and at least 7.5 m/s at Ludderitz, both of which
exceed the 6.0 m/s velocity considered to be the threshold velocity for
developing a wind farm. A wind power feasibility study should also be
completed by June.
The Windhoek-based Wildlife Society of Namibia has asked the government to
reassess recent progress on alternative energy sources and incorporate that
information into the Epupa feasibility study. The group also wants the
revised study to be submitted for an independent international scientific
review. A review of the original Feasibility Study by IUCN's regional
office in Zimbabwe is nearing completion, but will not include the new
information on gas or wind power options.
The Namibian and Angolan governments have already postponed making a final
decision on the dam by several months - a delay welcomed by project
critics, because it allows the new studies on alternative energy sources to
inform the decision-making process. In addition, the Namibian government
will soon finalize a new energy policy that establishes several laudable
policy standards under a "sustainable energy development" goal. If the
Epupa scheme is reviewed under the new policy, it could spell the end for
this controversial and costly project.
The reviews of the feasibility study by outside experts are available on
the IRN web site: www.irn.org.
BOX:
Promising New Energy Policy
Namibia's new draft Energy Policy calls for developing energy resources in
a sustainable manner. Some of its most promising provisions include:
* Government must base decisions regarding new energy projects on
"internationally recognized principles and procedures for environmental and
socio-economic impact assessment, mitigation and compensation";
* Cost-benefit analyses of proposed projects must be based on "full
environmental and socio-economic costs of projects," and new energy
projects must have positive net socio-economic benefits.
* The draft policy concedes that renewable energy technologies are
currently prevented from competing on equal footing with conventional
energy forms. Government will "level the playing" such that conventional
energy sources do not enjoy institutional or financial preferences over
renewable sources;
* Government will promote the use of solar and wind power to complement
grid power in rural electrification, water supply, urban water heating and
other appropriate areas.
-end-
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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