The Southern African energy landscape is dominated by South Africa--the epicentre of power demand and production--which lies at the heart of the Southern African Power Pool (SAPP)--the continent's most developed regional power network.
Electrification rates are improving across this diverse region, but consumers' inability to pay energy tariffs that are high enough to encourage either domestic or foreign investment in new power projects is constraining the expansion of power generation.
Sub-Saharan Africa's power generation mix typically comprises a large chunk of hydropower, along with gas, oil and diesel, while in the south coal is the dominant fuel, thanks to both South Africa's huge reserves and consumer demand. This may change as the region looks for cleaner energy to meet rising demand. Production from Mozambique's large offshore gas reserves, along with gas field discoveries off of South Africa itself, could also affect the region's fuel mix. But for now, coal remains king.
ESKOM ON THE ROPES
State-owned South Africa power company Eskoni is the dominant force in the sector, though it has struggled in recent years after becoming embroiled in the country's wide-reaching corruption scandals and racking up debts of R420bn ($29bn) by the end of 2018--equivalent to about 15% of all state debt. Meanwhile, its inability to maintain power supplies to one of sub-Saharan Africa's most developed economies continues to make headlines.
South Africa has power rationing, due in part to a lack of infrastructure and a failure to increase its generating capacity. While the situation has improved in recent years, this was as much down to stagnating demand in an ailing South African economy as it was to improved supply.
And the problems remain--rolling four-hour residential power cuts were employed by Eskom in March this year as part of the company's load-shedding strategy and it has had to rely on expensive diesel back-up plants to prevent the situation becoming even worse.
The reliability of South Africa's older coal-fired plants will be put to the test further from June to August, a period when power demand spikes. If they can't stay online, further supply problems could ensue.
Pretoria is committed to reducing South Africa's carbon emissions, but creating a low carbon power sector is easier said than done in what is one of the world's most coal-dependent countries.
The construction of 3.5GW of gasfired capacity along the coast has helped...