When the World Health Organisation declared the coronavirus (COVID-19) outbreak a pandemic, utilities in the power and energy sector had to act swiftly to adapt to the new normal of working remotely to keep the lights on while adopting safety measures for their employees.
ESI Africa’s primary focus is to provide support to the industry through the good times and the bad. To honour this promise in the month of April, along with our global colleagues, we aired a COVID-19: Utility Crisis Management webinar series covering four regions.
The aim of the discussions was to bring the best insights from utilities in Africa, Asia, Europe and the US who have undertaken to keep services operational in an age of physical distancing and lockdown conditions.
Here follows what transpired during the Africa-focused discussion.
Managing the grid in Ghana
Presenting the case in Ghana, Jonathan Amoako-Baah, CEO of GRIDCo, noted that there is no single country that can claim to have the solutions to curb the pandemic. “In Ghana, we took proactive measures at the onset of the pandemic, which resulted in reduced numbers of confirmed cases.” The government introduced economic interventions to reduce the plight of
citizens like the provision of free water, free transport and no tax on allowances for frontline health workers.
At GRIDCo, the majority of staff were advised to stay at home. While, in the
event of emergency work being required, “one person at a time is requested to perform the work and report on the status. It is only critical staff that are allowed to enter the office area,” he clarified.
Responding to an audience question on whether utilities will cope with the increase in electricity demand once the lockdown is lifted, Amoako-Baah noted that this depends on the state of the infrastructure and whether a good maintenance regime had been established in the past. As demand in some countries has drastically decreased, “I don’t think that post-COVID-19 we are going to have an unmanageable increase in demand.”
Amoako-Baah envisions that the system in Ghana will cope once industry returns to pre-pandemic levels and that, with the lessons learnt during this time, utilities worldwide will be in a better position to deliver services.
On a query around new projects materialising in the future, the GRIDCo executive pinpointed opportunities arising in the use of technology in ensuring business continuity, rather than traditional projects such as for transmission lines and substations. The possibility of technology projects for automation to minimise human intervention and person-to-person
contact will become prevalent. “This crisis has revealed inherent vulnerability in some business processes and practices … we now have an
opportunity to review them to enhance business operation, efficiency and productivity.”
The legal standpoint
Adding a legal and financial perspective to the conversation, Gadi Taj Ndahumba, Head of Power at African Legal Support Facility (ALSF), stated that they had not seen a decrease in developments since the beginning of the crisis. However, he noted that this might change if the pandemic continued for a long time.
According to Ndahumba, ALSF anticipated the following power sector trends:
• Short-term impacts: Different approaches to COVID-19 will lead to different impacts on utilities; complete lockdown vs. semi or no lockdown.
• Mid- to long-term impacts: Different economies will experience distinct
pressure in their power sectors; level of interdependency with the global economy (US vs. China); type of commodity (drop in price does not necessarily equate a drop in energy needs); importance of tourism.
• Even a global recession will have limited impact on the electricity demand in some African countries.
He did, however, admit that it was difficult to anticipate how the above impacts would unfold considering that not all countries would be affected in the same way. At this stage, the extent of the economic crisis in Europe and US is difficult to anticipate, but if it is a significant global downturn, and a lasting one, “you can expect the capital that was earmarked for
African investments to be reallocated to other investments in the US and Europe”.
Responding to an audience question on how utilities could handle IPPs’ payment capacity in the event of lengthy reduction in demand resulting from lockdown, Ndahumba said: “This is a tricky question in the sense that it is possible under most contracts to claim force majeure to avoid having to make some of the periodic payments to the IPPs.”
However, he noted that there will be a mechanism in most PPAs where the
developer or operator will be in a position to trigger termination. In most cases, if not the utility, then the government will have to pay a significant compensation. Suspending payments, even if the contract allows, is a
short-term solution. As such, he stressed that it is important to have a sector approach, where the whole market develops a response that will allow utilities to remain financially stable.
An island nation’s COVID-19 response
Painting a picture for the audience from a Mauritian perspective, acting GM at the Central Electricity Board (CEB), Shamshir Mohammed Mukoon, pointed out that the island nation is used to abnormal situations like cyclones. However, he admitted that they never anticipated something like COVID-19.
As such there was no contingency plan against the pandemic. “Since the declaration of this pandemic reaching Mauritius, from the 20th of March was a cancellation of incoming and outgoing flights; and on the 23rd a
complete lockdown ensued. The measures were acted upon after having registered seven confirmed cases of the virus,” he stated.
Mukoon stressed that as the head of the utility, he feels the responsibility and pressure of keeping the power system functioning day and night, which is demanding for a team working with a minimum taskforce. Since the lockdown, he notes that fortunately all the power plants are in operation-mode with no maintenance currently scheduled. “All planned maintenance has been kept aside. On the transmission side, the network is being operated by the SCADA team – with a minimum of two staff per SCADA; that is, six staff, rotating between eight hours to keep the network control on.”
As an importing country, he highlighted that procurement of fuel is a concern. “When South Africa declared its lockdown plans, we feared that our cargo would be stuck; unable to leave the continent for Mauritius to deliver coal.” Fortunately, through the ministry of foreign affairs, the ship left South Africa before the implementation of lockdown. “We recognise that COVID-19 has shaken all of us and the way we used to work,” said Mukoon, adding that this has given the sector an opportunity to reinvent itself and, as such, “we will be embarking on a post lockdown phase”.
In terms of the financial impact, Mukoon said CEB is aware that many customers will struggle to meet their electricity bills. “Because of this, we are working on a plan that will allow them to pay their bills over an extended period. COVID-19 has taught us a lesson: that we are all equal – and we need to work together to move forward,” he said.
A maintenance approach for South Africa
Adding to the discussion, the City of Cape Town’s executive director of energy, Kadri Nassiep, underlined that the pandemic has presented an opportunity to complete the much-needed maintenance programme.
Since the load has shifted from intensive power users to mainly residential, “we have sustained a significant decrease in demand”.
This means there is going to be a knock-on revenue impact for the city “and our initial projections indicate that we might be sitting with well over a R150 million lost at the end of this financial year – which is at the end of June – of a drop-off in sales.” However, there’s a silver lining that is attached to this, stated Nassiep, which is to perform maintenance from the Eskom side and alleviate loadshedding.
During the webinar, a number of audience questions focused on how utilities will continue with maintenance while protecting employees.
Nassiep explained that due to the City of Cape Town’s efforts to minimise health risks, maintenance work was limited to emergency repair work for the lockdown duration. “We are focusing exclusively on emergency power
restoration, street lighting where public safety is at risk, and leaving the non-essential work, which includes repairs caused by vandalism as well as capital projects.”
However, the biggest concern for the first-line response team is the availability of PPE equipment such as masks, for which there is a shortage of stock that has been made available across the entire essential services value chain. This includes water and sanitation as well as primary health care.
In conclusion, the four panellists took cognisance of the fact that the pandemic requires utilities to be flexible and dynamic in their responses to operational situations. They agreed that there is no knowing what a likely long-term post-pandemic scenario would look like. However, they felt it has
galvanised all industries to evaluate the template for business as usual. In the future, it’s possibly going to create an avenue for further decarbonisation of economies and in particular power and transportation. ESI
– Want to know more? Listen to all four regions’ webinar recordings at www.esi-africa.com/webinar