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POWER | REPORT All countries in southern Africa are squaring up to the challenges posed by the energy transition.
Southern Africa navigates energy transition
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The southern Africa region is navigating the challenges of the energy transition with a push to renewables and other clean technologies, though natural gas will remain pivotal for the foreseeable future.
or decades, southern Africa’s power system has been, in large part, underpinned by the security of supply emanating from South Africa, where coal is king. The economic powerhouse has been integral to the early days formation and evolution of the fledgling Southern African Power Pool (SAPP), which has helped support demand in neighbouring countries since its 1995. How things have changed. With its home market now facing a crippling supply crunch, Eskom, South Africa’s state power utility, is frantically looking to plug gaps while faced with its own huge problems, including a massive debt pile. That’s at the same time as mounting environmental concerns, which have thrown doubt over coal use and other traditional thermal energy sources, accelerating the shift to renewables.
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While coal remains the mainstay of South Africa’s energy system, meeting around 70% of installed power generation capacity, there is a clear move going on to cleaner alternatives. But it’s also a problem that needs to be put into a wider perspective. Africa’s power sector overall contributes less than 2% of global CO2 emissions, and while South Africa accounts for a sizeable proportion of that, it’s only a relatively modest impact on a worldscale.
Thermal-based power For most countries, economic and social development remains the top priority, given that around half of Africa’s population still has no access to reliable electricity – though funding options for traditional thermal-based power generation have narrowed.
AFRICAN REVIEW OF BUSINESS AND TECHNOLOGY | JUNE 2022
That’s not to say that new largescale thermal power plants are not being built, but development finance remains as important as ever. In Mozambique, the 450MW gasfired Central Termica de Temane power project (CTT) achieved financial close at the end of last year, with debt financing worth US$652mn from a group of international lenders. The power project is being developed by Globeleq, a leading independent power company and its partners, Electricidade de Moçambique, E.P. (EDM) and South African fuels giant Sasol. Located at Temane in Inhambane Province, it will supply power to EDM under a 25-year tolling agreement, and meet about 14% of Mozambique’s electricity demand. Analysts at Rystad Energy
continue to predict a bright future for gas, at least in the medium term, as Africa transitions to other forms of energy in the long run. Mozambique is one such example, which plans to develop its gas market and infrastructure based on huge offshore resources, to meet both local and international demands. South Africa too has made substantial offshore gas discoveries in recent times and may well seek to exploit these assets in the future look of its energy industry. In the interim, it is seeking to bring in temporary gas-fired floating power plants from Turkey’s Karpowership in a bid to reduce shortages and load shedding. Another country that has unearthed offshore gas most recently is Namibia, which likewise, will be looking to exploit this precious resource too.
www.africanreview.com
