HYDROPOWER: AFRICA’S BIG GAMECHANGER

ENERGY UPDATE OPPORTUNITY AFRICA

Projects of All Sizes in the Works

BY LIESL VENTER

Over 640 million Africans have no access to energy. The African Development Bank estimates that per capita consumption of energy in sub-Saharan Africa (excluding South Africa) is 180 kWh, compared to 13,000 kWh per capita in the U.S. and 6,500 kWh in Europe.

Bringing universal access to affordable electricity by 2030 on the continent would require installing connections to 90 million people a year, triple the rate of recent years, notwithstanding that energy demand in industry, freight and agriculture are growing rapidly. As is the population. It is one of the world’s fastest-growing Region: Africa Problem: Africa’s growing power needs held back by a lack of infrastructure

Solution: Large and small hydropower projects key to electrifying the continent

populations – one in three people born are African.

According to the International Energy Agency, or IEA, to achieve its energy and climate goals, Africa needs at least US$190 billion of investment a year between 2026 to 2030. Twothirds of this must go to clean energy.

The picture looks overwhelming. Especially if one considers the unfolding crisis in South Africa, home to the continent’s most developed electricity network. There, rolling blackouts have become a norm. To solve the problem of its flailing network, the country’s power utility has opted for a model of power-sharing, implementing rotational power outages several times per day for up to four hours per session. The reality in South Africa – and Africa – is simply this: there is not enough electricity.

IEA executive director Fatih Birol, however, maintains that amid the tumult of today’s continental energy crisis there is opportunity. Breaking down the enormous figures involved he uses a stark example: access to

OPPORTUNITY AFRICA

Rubagabaga hydropower plant located in Nyabihu in the western part of Rwanda.

CREDIT: EAST AFRICAN POWER

energy for all Africans calls for an investment of only US$25 billion per year – a sum equivalent to the cost of building just one liquefied natural gas terminal.

He notes that clean energy will be the key to electrifying Africa. “The continent has the potential to leapfrog towards renewable energy. It holds one of the world’s best wind, solar and hydropower untapped resource potential.”

While the continent undoubtedly faces enormous challenges to build the infrastructure required to meet its needs, renewable solutions kill two birds with one stone – delivering much-needed energy and addressing climate change and environmental goals.

Trevor Criswell, IEA renewable energy market analyst, believes the hydrogen sector, in particular, holds big potential for Africa. “Given the weak grid infrastructure in many countries in Africa and the urgent need to expand large-scale power capacity, hydropower can meet multiple needs of the continent. First, hydropower offers an affordable solution to providing electricity access to those who don’t have it. Depending on the country, hydropower can provide comparable, if not lower, cost of electricity compared to fossil fuels,” he said. “Second, large hydropower dams can provide additional benefits beyond electricity in Africa such as agricultural irrigation, drinking water supply, transport and navigation, flood control and strategic water storage. Third, hydropower has other services such as power system flexibility and – it can ramp up and down quickly and start quickly. This helps prevent load-shedding, black-outs, and helps maintain a reliable system which is needed for industries to grow.”

THE ARGUMENT FOR HYDROPOWER

International Hydropower Association (IHA) Vice President Anton-Louis Olivier told Breakbulk what makes hydropower even more viable is that it is already well-established on the continent. “In Sub-Saharan Africa, excluding South Africa, there is already around 50 to 60 GW of installed capacity of which more than half of that is hydropower.”

Statistically, Africa shares a similar picture to the rest of the world: hydropower accounts for around 17 percent of power generation. By the end of 2021, there was a total of 38 GW of installed capacity in Africa but this figure has increased thanks to several projects having been commissioned in recent months, most notably Ethiopia’s Grand Renaissance project that began electricity production in February this year, commissioning two units with an installed capacity of 375 MW each. Once completed, it will be Africa’s largest hydropower plant at 5.3 GW. Also, in Nigeria, the first 175 MW were commissioned at the 700 MW Zungeru Hydropower Station.

IHA Head of Research, Alex Campbell, said the good news, however, lies in the huge untapped capacity. “It is the continent with the least exploited resource with only around 10 percent of the economically and environmentally viable capacity being used at the moment. The two main rivers, the Congo flowing through the Democratic Republic of the Congo (DRC), and the Nile through Ethiopia, hold great potential for the development of hydroelectric power.”

Dan Klinck, CEO of East African Power, an integrated renewable energy development and engineering company, estimates that hydropower will account for at least 30 percent to 35 percent of new generation installations on the continent for the next twenty to thirty years. “Hydropower might not see the same headline coverage as solar and wind in Africa, but it is an extremely popular solution for many governments. There are multiple projects taking place across Africa as we speak, and the pipeline is even longer.”

What makes it even more beneficial is that the projects are spread across the spectrum from very large to tiny delivering only one-digit MW. “The opportunity is massive because we are not talking about ten or 20 or even 50 large hydro plants that need developers, investors and project experts but thousands of small hydropower projects that are as attractive to the market.”

More so, new hydropower would not only bring clean, reliable renewable energy, but it would also stabilize the grid in many regions, in turn facilitating the building of new solar and wind projects.

“From a logistics point of view, the continent is well-placed to deliver on hydropower projects – those currently under construction and the massive pipeline. Logistics companies have built up the knowledge and expertise to move this type of cargo efficiently.”

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PLENTY OF PROJECT CHOICE

Hydropower, Klink said, is all round good news for the project sector at large. Renewable energy expert Wim Jonker Klunne agreed that there is much to be excited about when it comes to hydropower projects as they hold potential for the entire supply chain – big and small players alike.

“Looking at small-scale projects alone there is a lot of activity taking place. In South Africa, a country that is considered dry, there are at least five hydro plants between the Lesotho Highlands and the Vaal Dam requiring project cargo and heavy-lift capability for the transformers that have to be moved. There is work for logistics operators in the hydropower sector across the continent.”

More so, the projects are situated all over Africa meaning the pie is not only large but can be shared. A U.S. Aid spokesperson told Breakbulk that 1,582 MW of Power Africa’s hydropower projects had reached financial closure by March this year and were ready to move ahead. This included Singrobo-Ahouaty in Cote d’Ivoire, the Mein River Hydro Pilot in Liberia, the Kainji Power-Jebba Hydro Power station in Nigeria, the Nachtigal Amont Hydroelectric Project in Cameroon, Giciye III in Rwanda, Nyamagazani I, Siti II and SM Hydro Limited in Uganda as well as the Luponde and Rusumo Hydropower projects in Tanzania.

Plants that had been commissioned more recently were the KruisvalleI Hydro in South Africa, Nkula A Rehabilitation in Malawi,

Achwa 2 HPP, Kyambura, Ndugutu

SHP and Nkusi in Uganda. Also, the

Lubilia Power Project, Mavumbe

and Rwime and Waki project were commissioned. In Liberia, the Mount

AFRICAN PROJECTS ‘NOT FOR FAINT-HEARTED’

Capital costs are a huge barrier to starting new hydropower projects in Africa, especially those that are large and owned by the State, according to a U.S. Aid spokesperson. “Many of these projects are dependent on weak sovereign borrowing rates making the cost of capital high. There are well-founded concerns as well around environmental and social issues caused by new hydropower that must be addressed with robust environmental and social impact awareness assessments and feasibility studied.”

For Philip Warren, managing director of Africa Route Clearance Consultants, the reliance on road networks remains one of the biggest challenges to overcome in Africa. “Although we are seeing investment into road infrastructure increase and efforts are being made to maintain the main arterial routes, the secondary network, especially for project cargo, can be a nightmare.”

Warren said cargo in the energy sector is extremely sensitive and requires as smooth transport as possible. “Road rehabilitation is ongoing, but the networks are old, particularly the bridges. That is where the biggest challenges lie especially for heavy and sensitive cargo like transformers. Nearly all of the bridges have to have bypasses and on a single route that can be one or five. It becomes an astronomically expensive exercise.”

He said in many instances where a bridge does not have to be bypassed it still requires propping. “The infrastructure has severe weight and height limitations. Fatal flaws exist and circumventing it can be done, but it comes with a price tag.” Transport and handling equipment is also not always readily available and congested ports with not enough storage facility add to the woes.

The upside, DSV’s senior manager of projects, air and sea, Peter Verheyke said, is that logisticians and transporters in the project sector have become professional at finding out-of-the-ordinary solutions. Warren added: “Often experts from elsewhere in the world will have nearheart failure when they see how we deal with some of the challenges. The African project logistics sector is not for the faint-hearted. It requires real resilience.” Coffee Hydropower Plant project is up and running as is Itezhi Tezhi in Zambia.

IHA’s Olivier said another reason for celebration was the numerous projects already being planned. In Burundi, the government approved a project to build two hydroelectric power stations on the Mulembwe and Ruvyironza rivers that will inject 10.65 MW into the local electricity grid. “Malawi just signed an agreement for the Mpatamanga hydropower plant on the Shire River. This 350-MW facility will be the first of its kind in the country doubling the installed capacity of hydropower in Malawi,” he said.

NOTHING SPECIALISTS CAN’T HANDLE

According to Peter Verheyke, senior manager of projects, air and sea at DSV, hydropower logistics are not a problem with logisticians able to easily handle hydropower projects just about anywhere on the continent. “There is very little that cannot be moved despite the many challenges and obstacles that exist. The hydropower sector is also logistically far less challenging than wind for instance and so there is a lot of interest from companies to service these projects.”

He said that while project logistics by their very nature in Africa are not easy, logistics companies have over the years developed the skills to ensure projects are delivered within deadlines. He said technical assessments are necessary as this allows risks to be identified early on in the process.

“Moving 300-ton pieces of equipment over treacherous terrain in very rural areas far from ports is never easy,” Klink said. “Hydropower, while easier cargo than some others, still involves numerous pieces of electromechanical equipment that is sensitive and needs to be treated carefully. Considering the locations of these projects in Africa, logistics is an important element for success.”

When it comes to greenfield projects, the available infrastructure to deliver cargo to a site is always a critical element to consider whether it be the need to bring in heavy handling equipment, propping a bridge, or building a jetty or even a road.

OPPORTUNITY AFRICA

A Kaplan turbine. CREDIT: VOITH

Experts Breakbulk spoke to agreed that the range of projects currently underway, and in the pipeline, is a major boon for the sector’s service providers. PriceWaterhouseCoopers (PwC) energy expert Martin Solomon said: “For large-scale projects timelines are long and the process can take decades to get off the ground. There needs to be an alignment between the public and private sectors while the investment needs to make sense to financiers. Getting the political and commercial sides on the same page can be difficult. The smaller projects, however, require only a modest amount of capital, are extremely scalable and many governments are happy to see private stakeholders and independent power producers take the lead.”

In East Africa, major inroads have been made, Klinck said. Ghana, Kenya and Rwanda are on track to meet their 2030 energy goals and other countries on the continent are working hard to catch up. Efforts to deliver capacity are being scaled up.

“There is potential in Mozambique for another 1,500 MW and in Tanzania, a similar size project is underway. In the Democratic Republic of Congo they are moving forward with a project on the Congo River, while Zimbabwe has more than ten projects in the pipeline that are a good medium to large scale,” he said.

IT’S ALL ABOUT THE ROUTE

In the end, successful projects in Africa start and end with route feasibility. Said Warren: “The biggest problems oftentimes only rear their head over the last few kilometers getting to a site that could involve constructing a road from scratch or finding alternative truck/trailer combinations. Considering the sensitivity of a transformer it is important, for example, to avoid a situation where the front of the truck goes over a crest and the back is not there yet, resulting in the cargo touching the ground or the truck getting jammed in tight dips.”

According to IHA’s Campbell, this is where small-scale hydro projects are proving their worth as they can be scaled and adjusted to meet the local environment and geographical limitations. “When it comes to hydropower it is very much sitespecific. It requires a lot of civil work upfront, but it does not have the particularly difficult demand of wind or is delicate.”

Moving forward, he said, it is critical to increase timelines for getting consenting and planning right. “At present, it can take up to ten years to complete these processes alone and that is too long. We have built enough hydropower projects in Africa to know we can overcome the challenges that exist from a logistics and project perspective. We have to improve regulatory frameworks to speed up delivery.” BB

Liesl Venter is a transportation journalist based in South Africa.