Innovation unlocks Africa's future energy mix

Innovation unlocks Africa's future energy mix

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New technologies and innovative approaches are opening doors for Africa's off-grid and on-grid efforts to widen access to electricity, according to SRK Consulting associate partner and principal environmental scientist Warrick Stewart.

As a panelist at the high-profile African Energy Indaba in Johannesburg recently, Stewart signalled exciting developments that will pick up the pace of energy project roll-outs, from large-scale power generation to smallerrenewable projects. He said the gathering of energy stakeholders acknowledged the need for African countries to explore a range of energy options extending the capacity and reach of regional grids while also harnessing new technologies to create a more varied energy mix. 

"Considerable innovation has taken place in terms of energy storage, through the development of battery technology," said Stewart. "Up until a year or two ago, this was not readily available in a cost-effective format but has now seen an increase in up-take, mainly in the domestic space. There has also been a dramatic increase in commercial rooftop solar systems in countries like South Africa."

As energy storage capacity evolves, there will be opportunity for renewables to start moving from non-baseload to baseload status, said SRK partner Darryll Kilian. "New technology is proving that bigger is not necessarily better, and that hybrid projects involving more than one technology can be structured to provide continuous energy supply," said Kilian. "This is also creating more opportunity for captive solutions which provide power for commercial companies or mines. Inventive funding solutions were also emerging for smaller projects of about 5 MW or less. There was still a need for reliable off-takers of energy, as the financial capacity of many African utilitiescan make it difficult for them to provide guarantees."

Gas discoveries were also likely to change the future energy landscape, said Stewart, providing another option for baseload production or a more flexible energy source to supplement renewables. "At the end of the day, it is in the interest of consumers for African countries to use the cheapest available source of electricity," he said. "Gas is likely to play an important part in a future system in which energy supply is structured so that the least-cost energy sources can be employed most often."

Kilian highlighted the Indaba's concern with policy and political consistency as a foundation for energy developments in Africa. Kenya and Ghana were mentioned as governments that were making positive policy adjustments aimed at providing confidence to investors, and these efforts were attracting investment in energy projects."It was clear from a range of experts that policy uncertainty will discourage investment," he said. "It was therefore no surprise that there was significant focus on the latest problems in South Africa regarding renewable energy and independent power projects (IPPs) - when Eskom appeared to be holding back on signing off power purchase agreements with IPPs."

He said it was vital for the regulatory regime to be transparent and consistent, particularly as South Africa's renewable energy IPP procurement programme had been so successful that it was viewed as a model approach across the continent. "There was also discussion about the desirability of South Africa's energy regulator being assigned an independent status, rather than falling under the Ministry of Energy," he said.

One of the key obstacles to broader energy access in Africa was the quality of the existing grids, which limited the ability of new power generation to be effectively harnessed and distributed. The good news was that development funding for energy projects was available and was increasingly used to bridge the gap when governments were not able to provide the necessary guarantees. On the down-side, however, many projects were still plagued by delays."The roll-out of large projects - both generation and distribution - has in the past often been delayed by a lack of alignment between in-country regulatory requirements for environmental and social approvals, and those standards set by the lenders themselves," said Stewart.

Working with the South African Power Pool (SAPP) to address key factors behind these delays, SRK has developed an Environmental and Social Management Framework (ESMF) to facilitate the screening of projects in line with lenders' requirements," he said. "This will help accelerate the implementation of SAPP's priority projects in the region, which promise to extend access to affordable electricity."

Stewart said the ESMF would ensure that the project development teams within the utilities and independent power producers (IPPs) were more aware of the project funders' requirements. It would also facilitate the earlier involvement of these institutions' environmental and social experts in the project planning process - as early as the concept phase and pre-feasibility stage. 

 

 

 

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