It’s been estimated that USD450 billion (ZAR6.9 trillion) will be needed to build new power generation capacity on the continent over the next 25 years. Africa’s ideal energy mix, however, is not a straightforward answer. Jay Urban, Director of Power Generation at WSP Africa, explains that: “While many African countries are making a concerted push into the sphere of renewable energy, coal and other fossil fuels will continue to be an important part of the mix, at least for base-load power and for the foreseeable future.”
A recent story published by Bloomberg stated that despite low oil, coal and Natural Gas prices, 2015 saw more global investment into the development of renewable energy (USD134 billion) than fossil-fired power plants (USD80 billion) for the first time.
“This is certainly a significant development, especially in emerging markets. However, in Africa the shortage of base-load power needs to be addressed urgently,” Urban says.
“Solar energy, for example, currently can’t compete with base-load solutions because, while a solar energy plant can feed into the grid during off-peak times (during the day), due to storage capacity challenges these solutions often don’t prove efficient for peak time. Although this is slowly changing with new technology developments for improved Concentrated Solar Power storage, alternatives need to be included in the overall energy mix,” he adds.
Grota adds that because the power situation of every African country is different, pinpointing an ideal energy mix that could be applied across the board is not so cut and dry. “The natural reserves of each country differs - one country may be sitting on a wealth of coal, another may have deep oil or natural gas reserves, while other more arid countries lend themselves more towards solar or wind energy power plants. While hydro power has played a significant role in providing a base-load alternative to fossil fuels over the years, drought in much of sub-Saharan Africa has seen these power stations struggle to meet demand as well.
“Given the geography of the continent, rural and remote Africa also presents further opportunities for power producers who have an appetite for owner-managed micro-grids in decentralised market models.”
There is undoubtedly a burgeoning of opportunities in Africa’s power sectors. However, successful investments will require more certainty around state-led resource programmes, prioritisation of these programmes and having an inherent understanding of local market issues and operating environments.
“We are in a prime position to assist both investors and developers in navigating the power sectors in Africa and can share insight, expertise and experience based on our working knowledge so that they make informed and responsible decisions,” says Grota.