AFRICAN UTILITIES AT A CROSSROAD: HOW MUCH POWER IS ENOUGH? Restructuring has helped the fortunes of some public utilities, but others remain big loss-makers.


The past decade has seen tremendous growth in Africa's energy capacity. Large-scale investment in hydropower projects have taken shape in Angola. Ethiopia and Mozambique, with potential for the Grand Inga III to materialise in the Democratic Republic of Congo (DRC).

Similarly, investments in renewables have increased as the price of solar energy has fallen--countries such as Morocco, Rwanda and South Africa have made considerable strides in bringing online more solar power as part of the energy mix There is still some emphasis on strengthening baseload capacity through improvements in fossil fuel power generation. However, the conversation is shifting away from coal and oil towards gas as the preferred source. The signs are pointing toward distributed and gradually decentralised generation.


Completion delays, cost overruns and susceptibility to corruption have impacted on the ability' of such projects to have a tangible impact as far as most Africans are concerned.

With this in mind some of the central utilities across Africa--such as in Ethiopia, Kenya and more recently, South Africa--have placed emphasis on incorporating independent power-producers (IPPs) into power generation activities. With growing technological innovation in grid interconnectivity, the opportunities available to IPPs have increased considerably.

At the same time, governments have had to be mindful of the need to build transmission and distribution infrastructure, which is further impeding progress.

This has become a focal point of discussion, with some looking to maintain centralised power generation, transmission and distribution, while critics have emphasised the need to decentralise and better integrate private-sector participation, particularly when it conres to power generation activities in remote areas.

A certain level of resistance has been experienced in this regard as central utilities look to maintain control over their respective power grids. Some tough decisions have been required, including the most recent discussion of unbundling South Africa's Eskom into three separate arms for generation, transmission and distribution given its huge levels of accumulated debt.


One area where central utilities are looking to make definitive improvements is in bringing online more renewable energy capacity. Zambia has made a concerted effort to include renewables in the energy mix, with the largest emphasis being placed on solar --the latest addition is the 34MW Ngoye solar photovoltaic (PV) plant just outside Lusaka, which is tied to a 25-year power purchasing agreement (PPA) with state utility...

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