With an ever-expanding population, countries in West and Central Africa are facing a rising demand for power. Aggreko, a supplier of temporary power generation equipment and temperature control equipment, believes that increasing demand provides an opportunity to introduce an improved energy mix to aid these regions’ journey to reduce carbon emissions and their energy transition.
According to Kweku Frempong, recently appointed as area general manager for West and Central Africa (WACA) at Aggreko, as countries look to increase their energy generation capacity it is critical to look at flexible commercial and technical solutions that incorporate a mix of thermal and renewable resources.
“As a global organisation we have already made a commitment to reduce our carbon emissions and use of diesel fuel with customers by 50% by 2030 and achieving net-zero across our fleet by 2050. We are also working closely with our partners to deliver flexible and cost-effective financing models for most of our customers as a sustainable financing model is a key ingredient in solving the energy issues in the region,” he said.
Kweku adds that along with the move to using alternative fuel sources in the region, there is also an aggressive push for decentralised power on the continent, especially in remote areas with small populations where it is not cost-effective to connect them to the grid. “We have seen growth in micro and minigrids in most parts of Africa and this is playing a critical role in ensuring energy security and supporting failing infrastructure.”
Countries like Cote d’Ivoire, Ghana and Nigeria have long faced long periods with no investment in the grid and transmission and distribution lines. “The lack of investment into the grids in these countries have led to a lot more power outages,” he says. “It is estimated that there is a 60% funding gap between the current demands and the funds available to bridge that gap.”
“However, we are beginning to see changing economic models and structures with more countries moving to service and cost-reflective tariffs. Historically, we have lived with energy subsidies from government in most parts of Africa, but these cost-reflective tariffs, will open up most of these economies for the much-needed funding that is required.”
Kweku says another noticeable trend is that of regulatory changes around decentralisation. “We are seeing a lot of economies moving to a willing seller, willing buyer model. We saw this recently in South Africa and Nigeria, where the countries have relaxed the traditional models of transmission and distribution to the consumer as well as to key sectors such as manufacturing and mining that have significant power needs. They can now also contract directly with independent power producers (IPPs) to meet their power demands, which in turn opens up these economies for private sector investment in the power sector.”
He says that while it was anticipated that Africa would leapfrog into renewables, the transition has been modest to date. “Often where the demand is urgent, countries look for immediate solutions, which is often thermal. While there are strategies for the long-term energy transition to renewables, many countries remain focused on addressing the immediate need and this sometimes puts renewables on the backburner.”
“There is, however, scope to move along this energy transition journey faster than anticipated. As more countries affirm their commitment to the 2030 ambitions and 2050 net zero emissions, we hope to see funding made available for large-scale hybrid projects. While we have already seen this happen in countries like Egypt and South Africa, there is still a need to rebalance between the immediate need for power for the population while also looking at the long-term solutions for renewables,” stated Kweku.