Advisory board members of the 18th annual African Utility Week – a gathering of over 7,500 attendees from more than 90 countries taking place this year on 15-17 May in Cape Town – share their thoughts on electrification in Africa and more with ESI Africa…
From left to right: Andrew M Herscowitz, Coordinator, Power Africa, USA; Lazarus Angbazo, CEO, Energy Connections Business, GE, sub-Saharan Africa; Alastair Herbertson, Director, Investec Asset Management, South Africa; and James Stewart, Global Head of Major Projects (Power &Utilities), KPMG, UK, take questions from moderator Bonney Tunya, Presenter, CNBC – Africa, Kenya during the 2017 African Utility Week keynote address.

Advisory board members of the 18th annual African Utility Week – a gathering of over 7,500 attendees from more than 90 countries taking place this year on 15-17 May in Cape Town – share their thoughts on electrification in Africa and more with ESI Africa…

Ikeja Electric, Nigeria | Engineers Without Borders | Stellenbosch Good Governance Forum | Nuclear Industry Association of South Africa | Ministry of Energy, Ghana

In our first conversation, Jamiu Badmos, HSSEQ & Business Sustainability Executive at Ikeja Electric, Nigeria painstakingly outlined the top contributing factors challenging Nigeria’s energy landscape. Describing the different levels of players in the energy value chain and how each is affecting the market, he lamented the apathy and resistance towards bill payment on the part of the consumers.

He pointed out various reasons for this, including the perception of electricity being a social amenity that should be free or very cheap: “In fact most Nigerians don’t factor utility energy cost into their expenditure.” Other leading factors are unjustifiable billing by some distribution companies; strong dissatisfaction with the quantum of service received; and unavailability of prepaid meters.

This article originally appeared in Issue 1 2018 of our print magazine. The digital version of the full magazine can be read online or downloaded free of charge.

In terms of the distribution network, alongside huge ATC&C losses, the weak distribution infrastructure due to poor CAPEX investment by successive governments before unbundling of the power sector has compounded the challenges. “This poor performance index scares most investors away, as this figure forms the basis for calculating ROI,” states Badmos, adding: “Major contributors to this are inefficient energy accounting and billing; and poor collection efficiency.”

The business sustainability executive is further concerned about the lack of cost-reflective tariffs “with the sale of power (N/kWh) being unsustainable and government parastatals owing the distribution companies huge debts in addition to the utilities’ normal customer debt.”

All is not lost, as the sector is also being transformed by young managers on all levels. We approached Ralph Muvhiiwa from Engineers Without Borders, South Africa to ask about innovative energy solutions and motivating young engineers in a challenging environment.

Muvhiiwa’s message to young engineers is to apply simple technologies that relate both to social and economic needs in a sustainable manner. “Nature likes simplicity! So we must develop or adopt technologies that are simple and sustainable in our societies. As upcoming engineers we must be able to see what works and what does not work in our communities,” he advises.

From research the organisation carried out in a small area in Muldersdrift, Gauteng in South Africa, about 92% of respondents are willing to adopt biogas technology. “There is a big interest in the acceptance of biogas projects that we are currently undertaking in communities. People who have enough animal waste materials are willing to adopt this innovative technology and use it in their communities,” explains Muvhiiwa.

However, the biggest challenge is the cost of installing the biodigesters. “The cost is beyond the reach of many households. Also, there is a big misconception of the technology as people often think that it is a dirty technology since it uses waste to produce energy. People cannot imagine cooking with gas produced say from cow dung,” Muvhiiwa shared. Nevertheless, through education and exposure people are beginning to understand the concept of producing biogas from waste to power their homes. This has led to the huge interest in this natural technology in communities.

Young energy professionals are surely questioning the sector’s leadership as ongoing financial and governance scrutiny of South Africa’s state-owned utility Eskom is underway. We asked Erwin Schwella, Professor of Public Leadership, Stellenbosch Good Governance Forum, South Africa to explore the type of leadership needed to overcome this burning issue.

Schwella views the leadership required with “good leadership linked to professional competencies”. This means effective and ethical leadership. Leadership with professional competency is leadership that possesses professional qualifications in the areas within which the functions of the particular SOE require professional competencies such as electricity generation and distribution, airlines and aviation, engineering, accountancy, and broadcasting – as well as expert competencies in good corporate and public governance.

Another dimension is that the leaders appointed to the boards and as executives must have the capacity as well as the commitment to act competently, professionally and ethically as leaders and executives to bring the mostly failing SOEs back from the brink of disaster on which they are currently poised. “What is not required are loyal, sycophantic, self-serving leaders who hide their incompetence and corrupt intentions and actions under a cloak of bullying behaviour, which not only drives the institutions into insolvency but also without moral or ethical care destroys people’s careers and indeed their lives,” states Schwella.

Another staunchly watched industry topic is South Africa’s new nuclear build programme. We asked Des Muller, Chairman, NIASA Supply Chain Development Sub-committee, what is keeping nuclear energy relevant in the market.

“As we evolved through a 20th century industrial revolution with the sources of energy we had (mainly thermal energy: coal, oil and gas), we arrived in the 21st century with a global energy mix that is unsustainable within the framework of addressing the climate change and air quality concerns we now have,” states Muller.

According to Muller, a sustainable energy portfolio should provide a safe, reliable, affordable and clean energy supply to the people and economies it serves. A balanced portfolio of thermal energy, renewables, hydro and nuclear energy will make a significant impact on climate change mitigation, with nuclear energy being the biggest contributor per kW installed.

With the world’s energy demand expected to double by 2050, we would need an unprecedented expansion in clean energy sources to first get the balance right and then meet increased demand and replace retired assets. Thermal energy should at the same time go through some transformation as retired generation assets are also replaced with cleaner coal and gas technologies.

When considering the sustainability of nuclear energy, the safety and security of nuclear power plants and the safe management of its waste has always been a priority for the nuclear industry. These are areas that are managed exceptionally well as demonstrated in the industry’s global safety statistics.

At a 92% capacity factor, which means it produces electricity 92% of its 60 year operating life, nuclear energy is considered the most reliable source of energy on the grid. When comparing the total lifecycle costs of all energy sources, the cost of electricity from nuclear energy competes favourably with hydro and coal power (without emission taxes).

France, which relies mostly on nuclear energy, enjoys the cheapest electricity in Europe at almost half that of Germany and Denmark. Nuclear energy produces no emissions during operation and is considered one of the cleanest sources of electricity. France’s emissions are on average 64 grams of CO2 per kWh against a global average of 564.

Nuclear energy can therefore be safely regarded as a sustainable energy supply, on all accounts, with the additional benefits of saving our fresh water resources, providing coastal-based desalination and off-setting our massive transmission losses, while able to power a clean electric transport system when it’s ready. That’s what makes nuclear energy a sensible and versatile option for the future, exclaims Muller.

Looking further afield, we spoke with Andrew Barfour, Director/Project Coordinator, Ministry of Energy, Ghana to uncover the successful policies and regulation directing the country’s progress.

The objective of Ghana’s policy is to provide an adequate, safe, efficient and reliable electricity T&D network, and improvement projects are constantly being developed to achieve these policy targets, states Barfour. This involves securing gas supply for power generation and other uses, explains Barfour. “All natural gas resources being produced in Ghana’s oil fields are being used for power generation as priority. In addition, the country receives natural gas for power generation through the West Africa Gas Pipeline.”

Increasingly, policy is delivering on achieving universal access to electricity in the country by 2020. At present Ghana’s electricity access rate is 84.15%, which is as a result of mini grids on island communities and rural electrification projects being undertaken.

Increase penetration of renewables in the energy mix is another target. Presently, the penetration of mainly solar energy in the energy mix is less than 1%. The goal is to achieve a minimum of 10% penetration in the energy mix by 2030. According to Barfour, utilityscale solar, wind and hydro projects are expected to be added online soon but current PPAs are being reviewed.

Some $150 million worth of grid intensification projects in various regions are being financed from multilateral and bilateral funding and are ongoing to improve and reinforce the distribution system.

Strong political will and a resultsoriented implementation approach are critical to ensure the achievement of rural electrification targets. Ghana’s local solution, the Self-Help Electrification Project, encourages communities to embrace and support government’s national electrification vision.

Another best practice is zero connection fees paid by beneficiaries of rural electrification projects. “This ensures that rural dwellers have no impediment to connecting to electricity,” says Barfour. The right financing strategy and source is another aspect – using both local and external sources. Adequate budgetary allocation was made on a yearly basis and bilateral and multilateral sources of funding in the form of grants and concessional loans were utilised, concludes the African Utility Week advisory board member. ESI

This article originally appeared in Issue 1 2018 of our print magazine. The digital version of the full magazine can be read online or downloaded free of charge.

Go to www.african-utility-week.com to view the conference programme and register your attendance at Africa’s leading industry event taking place on 15-17 May 2018 in Cape Town, South Africa.