Mapping the effects of power sector trends on Africa’s industrial growth, with specific focus on weighing the benefits and challenges of waste-to-energy, alternative fuel options, new coal builds, energy storage and smart energy solutions are powerful discussion points at this year’s POWER-GEN & DistribuTECH Africa conference.
Let’s unpack some of the trending topics, starting with Africa’s prime power development hotspot.
Nigeria offers a wealth of power sector business opportunities, with industrialists actively seeking generation and distribution solutions to power their business growth. The country has further revealed numerous opportunities for power sector businesses, particularly those operating in the renewable energy, solar energy, power storage, technical and training and specialist financial consulting arenas.
With a population officially in the region of 186 million, serious power challenges and massive industrial growth potential, Nigeria is actively seeking viable power solutions to drive economic growth and is therefore considered a hotspot for power industry development.
Many Nigerians and companies operating in the country are looking to alternative power solutions due to unstable grid power. Some areas have grid power for only 9 – 16 hours a day. This could cause serious problems for industries like smelters or manufacturers requiring options to overcome downtime. Many are looking to renewable energy and hybrid solutions to assure power supply and support their growth.
In Nigeria, where components of the power ecosystem have been privatised, generation companies and distribution companies face certain operational challenges, including fixed power tariffs. However, these challenges present opportunities for suppliers and service providers who can support lower cost, more efficient operations, advanced new technologies and enhanced technical skills.
The POWER-GEN & DistribuTECH Africa conference investigates this investment landscape with a focus on overcoming the risks while maximising the opportunities presented in this unique landscape.
Biomass: untapped potential in Africa
As a renewable, carbon neutral and potentially cost-effective power source, biomass is being harnessed effectively around the world, with Research and Markets’ Biomass to Power report stating that by late 2016, there were approximately 3,600 active biomass power plants throughout the world, with an electricity generation capacity of approximately 51GW.
Biomass presents significant opportunities for African countries; however few new projects are actually being developed. One major challenge appears to be a lack of understanding of the pros and cons of the different biomass technologies available. There is also a lack of capex – no credit lines allowing for these projects to be realised.
Another key reason for fewer biomass projects is an unsecured supply chain. It is crucial for any such investment to In less developed countries where the feedstock might be supplied by family farmers, collecting and bundling this supply could prove challenging.
Overcoming the challenges would present Africa with a compelling new addition to the energy mix. Biomass is a decentralised renewable energy source, which has great stabilising potential for the grid, as well as the ability to reduce carbon emissions.
POWER-GEN & DistribuTECH offers dialogue around how to optimise the potential for biomass, ensuring bankable projects that ensure reasonable return for investors.
Focus on finance
Several changes in the investment landscape will ensure a substantial focus on financing in the power sector.
According to Dr Willie de Beer, chairperson of the POWER-GEN & DistribuTECH Africa advisory board, the industry has acknowledged the disruptive landscape they now operate in. “Things we would have thought a year or two ago could never happen to this industry are now happening. While in the past we focused very heavily on generation and energy mix, now we are confronted from a broader industry perspective with things like leadership challenges, and how well we operate and run our utilities.”
There is an increased awareness that immediate action must be taken to bring stability to the sector before considering growth opportunities. “We have to stabilise the credit ratings and balance sheets, build investor confidence, and find ways to capitalise on the environment to remain relevant into the future,” he said, adding: “Without a focus on finance, we will go nowhere.
There has to be a balance between the technologies and the finances.” A new challenge emerging in Africa’s power sector is that the kW/h business model is no longer working. There is a need to move towards more innovative ways of doing business, while addressing the structure of the value chain and maximizing technological developments.
The conference discussion will illuminate these issues within the context of a shifting power balance in Africa, also causing less reliance on South Africa as the major power producer and giving each region more power independence.
A top of mind challenge emerging in 2018 is that of digitalisation. The conference provides a platform to understand how data is being collected, analysed and used. Equally important will be looking at the role of the prosumer and how data provides information about consumer behaviour patterns, priorities and service expectations.
Moefi Moroeng, advisory board member and specialist for electricity wholesale trading at NERSA, reports that key emerging trends include digitalisation, data management and the software issues the sector needs to address. “In addition, we need to focus on developing rules and processes to manage the grid in the changing environment.”
Clear trends have been identified towards the further development of renewable energy across Africa. Discussion at this year’s event will focus on how renewables can be integrated with the conventional power sector and how renewable energy can be used for the greater social and economic good.
Pools of excess generation need to be used to light areas of the continent still in darkness. To this end, POWERGEN & DistribuTECH Africa facilitates discussion regarding electricity strategy across the continent, ensuring we use and share best practices to serve the approximately 650 million who still have no access to power.
Delegates and visitors alike can look forward to comprehensive discussion addressing the lack of infrastructure to support renewables integration, the speed with which change is occurring in the sector and how to mitigate the risks presented by this rapid disruption, through sound partnerships, bankable projects and a supportive regulatory framework. ESI
Find the POWER-GEN & DistribuTECH Africa 2018 highlights here.
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