Angeli Hoekstra. Africa Power and Utiliies Leader. PwC Survey
PwC survey reports consensus that power companies will need to change their business models to respond to energy transformation. Angeli Hoekstra, Africa Power & Utilities Leader at PwC.

In South Africa, multinational accounting and professional services company, PwC, announced the results of its survey of the African power sector on Thursday.

The PwC survey of the Africa power and utilities sector interviewed 51 senior power and utility sector executives from 15 African countries.

The survey reports continued concern about some of the immediate risks to the power system but are also optimistic about the longer-term prospects for electricity in Africa.

Two thirds (67%) of those interviewed for the survey cited ageing or badly maintained infrastructure as a high or very high concern.

PwC survey shows positive outlook

However, the PwC survey found that many felt this situation would improve, with only 39% predicting that it would be a similarly high or very high concern in 5 years’ time.

Looking ahead to 2025, survey respondents anticipate definite step changes in a number of key issues:

  • An overwhelming majority (96%) say there is a medium or high probability that load shedding will be the exception rather than the norm by 2025.
  • Nearly three quarters (72%) felt confident enough to rate the above scenario as a high probability.
  • 94% of survey respondents said there is a medium or high probability that, by 2025, the challenge of finding a market design that can balance investment, affordability and access issues will have been largely solved.
  • 70% expect cross border electricity flows to be significant by 2025, accounting for a third or more of electricity generated.

Supply and cost reflective tariffs

Angeli Hoekstra, Africa Power & Utility Leader at PwC said: “There is much to be optimistic about and the results point the way to improvements ahead.

“But security of electricity supply and cost reflective tariffs continue to be the number one challenges.

“Until they are resolved, power systems will remain stretched, as investments in the power sector will be limited. Addressing cost reflective tariffs while ensuring social equity is a key challenge.”

Sector transformation

The PwC survey also highlights the energy transformation that is taking place.

According to the vast majority of survey participants (83%), the market vision for the future will be a mixture of large scale centralised generation and local mini grid and off-grid distributed generation.

The PwC survey found that 70% of respondents believe there is a medium to high probability that advances and cost reductions in renewable off-grid technology will deliver an exponential increase in rural electrification levels by 2025.

Utility business model

There is consensus that power companies will need to change their business models to respond to energy transformation.

80% expect that future power utility business models will be transformed by 2030 with a quarter of them saying they will be unrecognisable from those operating today.

Hoekstra commented further: “Technological and regulatory change and new investments presents very exciting opportunities to increase electrification access and electricity supply.

“New businesses and business models will be created and Africa will leapfrog into a better and more sustainable energy future if all stakeholders in the sector, from customers to governments, new businesses, regulators and utilities will embrace the opportunity.”