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AFRICA.
WITH LESSONS FOR KENYA POWER
GROUP 1
ADRIAN ONSARE.
HUSNI MUBARAK.
JAMES WASULA.
JOSHUA OTIENO.
STEPHEN MUSUNGU.
OBJECTIVES
DEFINITIONS.
ENERGY & DEVELOPMENT BRIEF.
ELECTRICITY IN SSA-A BRIEF.
INTRODUCTION TO THE ENERGY VALUE CHAIN.
CASE STUDIES: STUDY OF UTILITIES IN THE FOLLOWING
COUNTRIES & RELEVANT LESSONS.
DEMOCRATIC REPUBLIC OF THE CONGO.
NIGERIA.
SOUTH AFRICA.
DEFINITIONS.
Energy: Power Derived From The Utilization Of Physical Or Chemical Resources, Especially To
Provide Light And Heat Or To Work Machines.
Spinning Reserve: The Extra Generating Capacity That Is Available By Increasing The Power
Output Of Generators That Are Already Connected To The Power System.
SSA: Sub-Saharan Africa.
Value Chain: Process Of Linking Functions From Input Through Output To Delivery, Enhancing
Economic Value Of Product.
THE ENERGY & DEVELOPMENT
ENERGY &DEVELOPMENT CTD.. Generally, countries with high energy consumption per capita
tend to have high GDP.
Energy consumption cannot be decoupled from GDP.
African Countries generally have low GDP per capita and
associated low energy use in Tonnes of oil equivalent per
Capita.
Countries with high populations, but with relatively low
energy consumption also have comparatively low GDP per
Capita, as compared to countries wit high population and
high energy consumption per capita. E.g. India vs USA.
Source: https://www.eea.europa.eu
Source:http:WWW.euanmearns.com
ELECTRICITY IN SSA-BRIEF
All economies are anchored on two primary infrastructure developments, namely
power and transport.
Without proper development of these two industries, further investment into
secondary infrastructure (education, health, housing etc.) ALWAYS struggle to
materialise.
Power one of main areas of concern for the sub-Saharan region across all aspects of
the economic value chain.
Despite SSA installed capacity of approximately 70GW, at least 25% of this is
unavailable due to poor infrastructure and maintenance.
Challenges, trends and developments in SSA region
Generation:
In many ssa countries, generation does not meet demand, hence there is more
investment in generation projects.
Investment is meant to address current shortfall and projected growth in demand.
In many ssa countries, increased installed capacities do not necessarily translate to
increased actual generation mostly due to deployment of inefficient technologies.
In isolation, bumping up generation does not solve all problems in the power
sector
Energy storage: not popular in large scale in ssa since reserve margin is still very low. E.G.
Kenya is approx. 28-30%.
However, with uptake of renewable energy technologies, storage may be necessary to mitigate
intermittency of solar/wind.
Energy trading:
As mentioned, lack of diversified generation mix is major challenge in ssa.
Energy trading would open up opportunities for generation resource sharing.
Generation resource sharing would result in a diversity in the energy mix & reduce reserve
requirements.
Europe has the European energy exchange; this is an avenue for trading of physical energy
commodities and derivatives trading.
SSA however, only has power pools, which are a series of bilateral agreements between countries.
I.E. East African power pool(EAPP), west African power pool(WAPP), southern Africa power
pool(SAPP),Central African power pool(CAPP).
SAPP most advanced.
Main shortcomings of power pools are conflicting national policies & need for significant
investment in transmission infrastructure.
Trade on power pools currently minimal- less than 1% for EAPP, less than 7% for SAPP.
ENERGY VALUE CHAIN CTD..
TRANSMISSION:
Has to be developed along with generation and load growth.
Increasing demand in Kenya & other SSA countries has necessitated.
Increased development of high capacity transmission line infrastructure to
evacuate power from large generation, improve reliability, enhance power trade
in power pools, and reduce overloading of exiting transmission lines.
DISTRIBUTION:
Distribution infrastructure direct correlation to electrification rates.
Most affected by faults, breakdowns, vandalism.
Most ssa countries have high aggregate technical, commercial & collection losses.
In ssa countries, distribution losses exceed north American & European average of 8%.
Kenya currently undertaking intensive rural electrification programed through expanding distribution network.
Tariff structure a key comment in distribution
High tariffs can lead to cost push inflation.
Low power tariffs can make it difficult for utility companies to maintain infrastructure.
SMART TECHNOLOGIES:
Mainly smart grids and smart metering.
Important in determining accurate consumer energy consumption & to find optimum deployment of generation sources.
Issues non-cost reflective tariffs, billing errors and tampering of prepaid electricity meters
DEMOCRATIC REPUBLIC OF THE CONGO
Power Sector Regulatory Environment
Utilizes About 2% Of Its Significant Hydroelectric Resources From The Congo River;
Whose Estimated Capacity Is 100GW.
Project underway to build USD80B Grand Hydroelectric Power Plant Inga dam; at
40GW, will be largest hydro power facility in the world.
ENERGY VALUE CHAIN CHALLENGES.
CHALLENGES:
Challenges across the entire value chain. These include:
Lack Of Power Supply To Meet Current Power Demands- Despite underutilized hydo resource.
Lack Of Funding And Financial Support From The Government.
Access To Electricity In The DRC Is Extremely Low At 9% Per Year.
The DRC has one of the longest transmission line sin the world-The 1,700km Inga- Kolwezi Transmission Line.
In 2014 There Was A Refurbishment Of The Transmission Line To Improve Its Operating Capacity From Its
Previous Level of 25%.
Low Per Capita Energy consumption.
DRC CHALLENGES & LESSONS FOR KENYA
Billing collection rates around 40% mark in recent years and the hidden costs in power generation
for the company stand at nearly 600%, due to gross financial inefficiencies.
Inadequate specialized labor force.
LESSONS.
KENYA Power would need to restructure revenue protection methods so as to secure turnover.
Kenya Power should speed up power distribution; energy consumption leads to economic growth, which
in turn leads to increased revenues for the utility.
Kenya Power to retain sharp focus on training & development in order to avoid a skills gap.
Kenya Power to lobby so that tariffs are cost reflective and to improve the rate of recovery of electricity
invoices.
NIGERIA
THE POWER SECTOR STORY
NIGERIA KENYA
Power Sector Regulatory Environment
Main entities in the Electricity Transmission Company of Nigeria(TCN), National Integrated Power Projects.
Transmission Market
Supply disruptions.
Mostly due to activities by militant groups such as MEND, Boko Haram.
August 2016,Kenya power and Toshiba Transmission & Distribution Systems (India) pvt ltd (TTDI),
MOU for implementation pilot project aimed at decreasing distribution losses in the national grid.
Supply of gas Insulated Transformers to fight vandalism.
Supply of environment-friendly Solid Insulated Switchgear.
SOUTH AFRICA
SOUTH AFRICA
KENYA
Power Sector Regulatory Environment
Main entities in the Electricity Eskom, with IPPS becoming more prominent.
Generation Market
2%
5%
1%
Coal
Nuclear
Hydro
Renewables
92%
ENERGY VALUE CHAIN CHALLENGES & SOLUTIONS
GENERATION:
PROBLEM
A botched privatization plan of Eskom by SA government; policy framework
prevented Eskom building new power plants.
Resulted in In 2007, reserve margin fell to less than 8% of installed capacity
Peak Demand at times overshot available generation, therefore causing rolling
blackouts and scheduled load shedding
Load shedding intense from 2008-2015
Recall Energy trilemma( Security, affordability, sustainability).
Overreliance on coal-A non Renewable Resource.
SOLUTION.
Amid Funding, labour & Technical Challenges, South Africa had to rapidly increase generation
while also improving generation mix.
Key Projects : Medupi Coal Fired 4,764mW,Kusile Coal Fired Plant 4,800mW
This change in generation mix is largely driven by IPPS; especially renewable energy thro
Renewable Energy Independent Power Power Producers(REIPPs) together with Coal, Gas, Cogen &
Nuclear IPP programmes.
LESSONS FOR KENYA.
R&D in bulk power storage to address peak loads as demand grows. E.g.
pumped storage, compressed air storage etc.
Stringent quality control in rural electrification initiatives.
THE END
Resources
KPMG-Sub-Saharan-Africa-Power-Outlook- Scott, Lindfeld, Martin, Pitso & Engelbrecht,2016
Powering Nigeria for the future (PWC report)- Wijeratne ,Jaswal,Sircar & Pasemann,July 2016.
Http://www.Fin24.Com/economy/eskom/eskoms-new-challenge-is-distribution-koko-20170207
Http://www.Infrastructurene.Ws/2013/09/17/the-lessons-eskom-learnt-the-hard-way/