The sub-Saharan African region, although diverse in resources, economies, and policies, shares one commonality – a lack of investment in power infrastructure as witnessed by rolling blackouts, load shedding and spiralling energy tariffs. Add to this a startling fact disclosed at the African Development Bank’s annual meeting in Lusaka in May 2016. The bank estimates that by 2050, two-thirds of Africans will live in cities. Given the pressure already being experienced on the power sector, how can the continent begin to close the infrastructure gap and prepare for a more urban future?
Planning equals good returns
“At Poweroad Africa, we believe new generation projects can be bankable and add to Africa’s power capacity as long as they are well planned,” says Darin Mac Allister, MD of Poweroad Africa. “We have a team with over 30 years’ experience with energy in Africa and emphasise the need to take time to conduct studies prior to commencing projects.”
Studies, which initially begin with an energy landscape study, are conducted to determine the most suitable energy source. This is followed by a concept study on the chosen generation technology, and then a pre-feasibility/feasibility study. Finally, after the completion of these studies, conducted to provide evidence for the viability of the project, bankable feasibility studies are conducted with the ultimate goal being to obtain project finance supported by solid information. By following this process, developers will face the least risk, and ensure that any finance obtained will result in the successful completion of a project.
“This expert process, which we provide to clients, allows project developers to evaluate the viability of their projects with the least amount of finance required. This greatly assists project developers in implementing projects, which otherwise would not have been able to commence,” Neil Borthwick, director of sales and marketing at Poweroad Africa explains.
Utilities and municipalities will concur that initial costs for development vary considerably between the different generation technologies available in the market. For instance, to obtain bankability for a project, solar technology is a relatively inexpensive option when compared to hydro and geothermal power. This is partly due to the availability of solar irradiation data and also due to the scale of the projects. Whereas, hydropower requires specific flow measurements to be conducted over a substantial time-period. To determine geothermal power, exploration drilling, which can prove to be expensive, has to take place first.
Prices for the various technologies, and specifically for solar PV and wind generation, have dropped considerably in recent years due to innovation, improved efficiency, increased number of completed projects, and the rising demand for these technologies. This, along with increased availability of funding, has resulted in increased implementation of renewable technologies. Solar PV has decreased in price to the point where it is now within the reach of private individuals and corporates wishing to install it within their own homes and at their business premises.
Wholesale of electrification market
Borthwick continues: “We provide a fully comprehensive service to ensure that the electrons generated are delivered to your electrical equipment, safely and efficiently. We can meet your total project requirements through the supply of switchgear, cables and transformers. Not only do we supply the equipment; we are also able to assist with design specification and implementation.”
Even though there is a concern around tariffs, some African countries have very favourable feed-in tariffs in place for technologies like solar PV, wind and biomass. Thus, projects that are aimed at self-use or generation in isolated areas can be viable when consideration is given to the opportunity cost, the loss of production, or the cost of installing transmission systems to the location. This has resulted in some projects being implemented where ordinarily they would not have been.
Borthwick knows that funding for any project can be difficult to obtain. “However, due to our involvement in the industry for a number of years, we have built relationships with sources of early stage funding and can assist clients in how best to access this funding.”
“The key to project success is being able to bring all the various aspects together in a coordinated manner and ensure overall project control. At Poweroad Africa, we therefore make use of tried and tested project management body of knowledge (PMBOK) principals for the delivery and implement of projects.”
These principals include the following:
- Cost control and reporting
- Schedule control
- Project scope control
- Quality control
- Expediting and accurate materials control
- Project management systems
- Client reporting and transparency
- Document control and governance
- Change management and client approval process
- Health safety and environmental management
Borthwick concludes: “When considering your next energy project Poweroad Africa looks forward to forming lifelong partnerships that will enable you to navigate the tricky world of projects and ensure that your project is a success.”