HomeIndustry SectorsFinance and PolicyLow profits drive gas turbine market to Africa

Low profits drive gas turbine market to Africa

gas turbines. Natural-Gas-Rights.-Pic-credit-Institute-for-Energy-Research
Amid decreasing profits, some producers have recently chosen to disassemble their gas turbine plants. Pic credit: Institute for Energy Research

In international news, Turkish investors have started to disassemble gas turbine power plants, which are no longer profitable, reports local media Daily News. According to sector representatives, the equipment will be transported abroad, mainly into Africa.

Lowering electricity and natural gas prices, increasing electricity supply and the weakened Turkish lira, are attributed to this trend, which sector representatives warn may put future energy supply in Turkey at risk.

According to the Daily News, a source from the Energy Markets Regulation Board (EPDK), said: “Gas prices are high. Some power plants, therefore, cannot meet their operational costs, initiating a natural selection and carrying their power plants abroad. Some African countries show great interest in these plants. […]”

The same trend is also the case of several coal-fired turbines, which produce high emission levels and use expensive fuels.

Second-hand gas turbine market

Explaining that some 44% of Turkey’s power generation is based on natural gas turbines, Ali Rıza Öner the general manager at Sarempet said: “There is no chance for combined cycled power plants with a productivity level under 58% to be profitable all the year around, except some months when prices are higher, such as winter months.

“While independent electricity producers made their financing feasibility calculations on 7,200 hours at minimum, this figure decreased to 2,500 hours in the last two years. Many gas-fired power plant owners have therefore tended to take their plants abroad, mainly Iran, Kazakhstan and western African countries, […].”

Öner concludes: “Most of the African regions have an energy deficit and their purchasing guarantees constitute lifeblood for the second-hand power plant market.”

Renewables driving out gas

Meanwhile, there are also non-functional gas-fired power plants in Europe due to a dramatic rise in the number of renewable power plants.

According to a Daily News’ source, there are many gas-cycled power plants in Turkey, including both gas turbines and gas engines.

The high level energy executive explained that: “As gas engines have lower productivity levels than gas turbines, almost none of them are online now. Gas turbines’ productivity level is around 50%, but most of them have barely come online this year.”

The source added that these power plants “have no choice other than being closed down […] It is more feasible for them to be taken abroad, especially to African countries, some of which give purchasing guarantees up to 85%. This means the capacity costs are paid even if they go offline.”

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.