Report Highlights Urgent Need for Power in Africa as Demand Rises

Consultancy Frost & Sullivan's 'African Utility Market Intelligence Report' has highlighted an urgent need for power and water utilities to expand and improve their generation and distribution capacities.

This finding is based on the consultancy's analysis of the African Utility Week exhibition and conference, held in Cape Town in May, which underline an increasing demand for water and electricity across Africa, largely due to growing populations and rising levels of urbanisation.

The report recommends that utilities reshape and optimise their business models to align these with the increasingly stringent environmental standards and low-carbon economy requirements of today.
In terms of electricity generation, the report reveals a lack of financial resources in Africa to provide electricity in a reliable, affordable and economically viable, as well as socially and environmentally, acceptable manner. However, in order to enable access to the required financial resources, investors need a guaranteed return on their investment.

Meanwhile, the role of fulfilling electricity generation shortfalls and supporting energy security in the coming years will be played by public–private partnerships and large energy-intensive industrial firms, which are constructing off-grid solutions.

The report also underpins a trend among energy-intensive companies toward investing in energy efficiency programmes and energy management systems.

For the African continent to move towards smart transmission and distribution technologies and smart metering, a combination of conventional technologies with directed implementation of smart technologies will be required. This should produce context-specific solutions, with due consideration made to capital availability, existing infrastructure, economic dynamics and local culture.

However, while these technologies will provide for improvements and efficiencies, challenges abound. The adoption of these technologies will include poor regulative frameworks, local content requirements and high initial capital costs, as well as a lack of specialist skills.

Frost & Sullivan's report indicates that Africa is poised to take advantage of several new gas discoveries, which will enable it to leapfrog industrialised countries' development path and move directly to a renewable gas hybrid system.

Progress on reducing costs relating to clean renewable-energy technologies has been made in terms of solar and wind power.

Africa is endowed with abundant and readily available resources for renewable-energy power generation. Wind and solar photovoltaic power plants can be constructed with relatively short lead times, presenting a rapid solution to the power generation shortfall experienced by so many countries in sub-Saharan Africa.

Sub-Saharan Africa also has the potential to generate 1 750 terawatt hours from its hydro sources, of which fewer than 15% have been developed, the report reveals.

Surprisingly, it is envisaged that most African countries may prefer to develop their existing hydropower potential rather than invest in other, more expensive fossil fuel energy sources.
These advantages will ensure a rapid, cost competitive, clean and sustainable development pathway for the power sector, which is able to support economic growth and foster social development, while helping to unlock Africa's vast economic potential.

The report states that sub-Saharan Africa lags most regions in the world regarding water access, management and supply.

To improve this situation, the report suggests that water utilities implement new technologies, such as smart water grids, to reduce costs and enhance the efficiency of water distribution systems, where it appears that information and communication technology is playing an ever-increasing role.
The report also highlights the need for cost- reflective pricing in both the water and energy sectors. Water utilities and service providers, specifically, need to price water so that revenues can cover operation and maintenance, while profit can be reinvested in expansion and the rehabilitation of infrastructure.

See more at: http://constructioninsightmagazine.com/2014/07/urgent-need-for-larger-african-power-water-utilities-as-demand-rises/