Africa Energy: Electricity industry faces more opportunities than challenges

Substation_electricityThe energy industry in Africa is faced with more opportunities than challenges, a panel of speakers at the PowerGen conference agreed on Tuesday.

Power Utility Leadership platform founder Izak du Plessis remarked that similar to other industries, the electricity industry will change and keep changing.

He pointed out that if utilities and businesses are not meeting market needs, then market forces will “take you where you need to go”.

Du Plessis further noted that financial challenges often limit a utility’s capability to properly serve its market. This is especially true in sub-Saharan Africa, where utilities are struggling to implement sustainable financial models that balance utility needs and consumer needs.

Additionally, he said the electricity industry needs broad-based participation, where the private and public sectors collaborate more and where more stakeholders are included in utility value chains.

State-owned power utility Eskom sustainability acting group executive and generation division group executive Thava Govender commented that before a “new dawn” in the industry can be realised, there is a need for political will.

“A supergrid in Africa is an ideal [electricity] solution, and potential is continually highlighted, but the initiatives do not move.”

He added that, above and beyond the political will, there is also a need for more research into technologies that could work for African conditions and needs, which he feels is lacking.

Schneider Electric South Africa energy VP Taru Madangombe, meanwhile, noted that a new dawn in the energy industry has been happening for the last ten years.

“We are seeing positive outcomes through private sector inclusion in the industry [from generation to distribution] but more collaboration is necessary to realise a new energy dawn.”

Madangombe also discussed digitisation and decentralisation as key trends affecting the industry, paving the way for opportunities to collaborate and come up with innovative solutions – both on the supply and the demand side in terms of service delivery.

Additionally, he stated that African utilities face the challenge of ageing infrastructure.

“There are technologies that can aid with ageing infrastructure to have visibility of the asset and remote control of the asset without compromising the integrity of the network. State-owned entities need to invest in these technologies if they are going to opt to keep old infrastructure.”

Moreover, Zambia Energy Regulator Board economic director Alfred Mwila claimed that there is a drive on the regulatory front to ensure cost effective solutions to both urban and rural electrification.

“Policies must adapt to industry changes,” he said, adding that institutional mandates also have to be clear if Africa wants to attract investment.

Mwila also said business modelling needs to support the new energy dawn in terms of balancing the need for affordability on the consumer’s part, with utility viability.

“A particular tariff needs to keep the utility viable, but the end-user needs to [be able to] afford it.”

Power Africa overseas private investment corporation liaison Peter van den Dool, meanwhile, suggested that the industry’s focus should shift from just delivering megawatts to increasing connections.

“We need to create an enabling environment for more connections. Grid, and off-grid, distribution markets in Africa are ripe for development.

“We need clearer rules, adapted business modelling, new technologies and private-public collaboration to realise more connections in a new dawn electricity sector.”source:engineeringnews.co.za

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