ENERGY AND ENVIRONMENT SECTOR OVERVIEW:POWER ON

BY ELSKE JOUBERT

POWER ON

An optimal energy mix for Africa relies on a variety of generation technologies. In a 2015 report, McKinsey estimated that if every country in Africa had to build to meet their current electricity demand, the region would require about $490-billion of capital for new generating capacity – and a further $345-billion for transmission and distribution infrastructure, says Paul Grota, Director: Industrial, Power & Project Medupi, WSP, Power, Africa.

“The good news then is that despite the commodity price challenges over the last seven to eight years, there is still significant investor interest within the African power sector(s),” he says.

HERE ARE 3 MAJOR TRENDS ENERGISING CONTINUED INVESTMENT INTO AFRICA’S POWER SECTORS:

GAS-TO-POWER POTENTIAL IN AFRICA IS BALLOONING

We are still seeing investor interest in gas especially, which is still less carbon intense than coal. Gas is gaining momentum with the recent finds in southern Africa where gas-to-power offers a suitable base-load resource that can supplement coal-fired power in the medium- to long-term.

CARBON REDUCTION TARGETS SOLIDIFY INTEREST IN CLEANER ENERGY SOURCES

Clean coal will remain a key base-load power source for a number of countries across sub-Saharan Africa, as the reality is that governments within these countries are faced with the trilemma of providing affordable, decarbonised and secure electricity.

Renewables continue to play a vital role in the power mix for most African countries. Renewable power plants hold great opportunities for communities and/ or industrial activities as these plants can be deployed more quickly and close to the source of demand through microgeneration.

MAKING CONNECTIONS WITH DISTRIBUTION AND TRANSMISSION INFRASTRUCTURE

Closely linked to renewable energy, regional integration increasingly dominates African policy-makers’ agendas and donor finance institutions. The focus is on developing infrastructure that strengthens the existing power pools and enables cross-border or intra-continental power trading.

Investor confidence, however, requires certainty around state-led resource programmes, prioritisation of these programmes and policy stability, and that investors have an understanding of local market issues and operating environments.

WASTE SECTOR

The South African waste management landscape is set to experience a raft of legislative and regulatory changes that will advance the country toward a more resource-efficient economy, thereby creating opportunities for business and investors in the waste sector who focus on plastics, organics, e-waste, and construction and demolition waste. This is according to GreenCape’s Waste 2019 Market Intelligence Report.

The report also states that, according to the Department of Environmental Affairs (2017), the waste economy:

A further R11.5-billion per year could be unlocked by 2023 by diverting up to 20-million tonnes of waste. The anticipated spin-offs could include 45 000 additional formal jobs and 82 000 indirect jobs, as well as the creation of 4 300 SMMEs.

CONTRIBUTED R24.3-BILLION

to the South African GDP in 2016

Provided 36 000 FORMAL JOBS

Supported 80 000 INFORMAL JOBS/LIVELIHOODS

Increased awareness of the impact of waste on the economy, environment and society

THE MAIN DRIVERS OF GROWTH IN WASTE BENEFICIATION INCLUDE:

Extensive support from producer responsible organisations and industry associations

Regulatory reforms (national and provincial)

Increased pressure on municipal landfill airspace

A growing understanding of the value of waste

Recognition by government that the waste economy creates jobs and attracts investments

Sources

Green Cape Waste 2019 Market Intelligence Report – funded and commissioned by the Western Cape Provincial Government’s Department of Economic Development and Tourism.