Adams Adams Advisory Insights - May 2020

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AFRICA INSIGHTS The biggest new growth in renewables has emerged from the West and East African regions respectively. ECOWAS nations have seen the renewable portion of their energy mix expand dramatically over the past two years, with five new solar plants built in Senegal since 2018 and similar projects underway in Mali. The AfDB has additionally launched a financial support mechanism for rural electrification projects in Cote d’Ivoire, Guinea and São Tomé and Príncipe. East Africa has seen the proliferation of a variety of renewables including geothermal projects in the Rift Valley, wind farm projects in Ethiopia, Kenya, Tanzania and Uganda, and planned ‘run of river’ hydropower projects across Burundi, Kenya and the DRC. In addition to the shifting focus toward renewables the past two years have seen committed efforts by regional partners to further advance energy trade in and between regional power pools. The Maghreb Electricity Committee (COMELEC) is the continental leader in this regard with Morocco and Tunisia both intending to sell power to European nations via undersea transmission cables. Members of the East African Power Pool (EAPP) have been trading power amongst each other since 2018 following the construction of six major transmission lines between member states. In the same year Tanzania received a US$455 million funding package for the construction of a transmission project which links the EAPP and the Southern African Power Pool (SAPP), while in September 2019 the World Bank helped fund the Malawi-Mozambique interconnector, with additional projects for linkages between the DRC and Zambia also underway. The West African Power Pool (WAPP) will begin trading energy across borders by the end of 2020 through an active IPP market in Ghana and privatised transmission infrastructure in Nigeria. Source: PIDA, Ketraco, ESI-Africa, Prime Investment Limited; 2018-2020 Priorities and opportunities leading up to 2030 Thanks to reductions in cost and newfound ease of scalability the notion of renewables playing an integral role in powering national and regional grids is becoming increasingly palatable to international investors. Development priorities have shifted towards making the energy mix of renewables and non-renewables more efficient and easy to manage, providing a conducive platform for building an efficient and digitised renewable energy grid from the ground up. Opportunities over the coming years are likely to focus on aspects such as better utilising Big 4
AFRICA INSIGHTS Data and the internet of things (IoT), improving battery storage capacity, implementing smart grid development through artificial intelligence (AI), and streamlining the transfer and sale of electricity through blockchain technology. Advancements in battery storage are the key avenue by which renewables have managed to compete with oil, gas and coal for utility scale applications. These instances have been generally confined to developed countries including Japan, Germany, UK, US and other EU member states, however analysts predict that their application will drive growth of at least 45% percent year-on-year in emerging markets between now and 2025. Battery-storage systems including lithium-ion, sodium-ion, sodium sulphur and vanadium redox, can serve as vital components in the interplay between renewables and fossil fuels as they remove inefficiencies and manage output by storing energy during peak production and releasing during peak demand. In smaller contexts they can drive down costs for individual consumers in micro-grid operations through the use of ‘behind-the-meter-systems’. In a grid intensification context they remove inefficiencies by harmonising the intermittent supply of renewable energy with peaking and troughing demand of central grids. Such systems are in demand in countries like Burkina Faso, South Africa and Zimbabwe, where aging centralised grids suffer from frequent failures. In February 2020 the International Finance Corporation signed a deal with the Burkinabe government to begin rolling out such systems before the end of the year. The South African government has similarly adopted the Battery Energy Storage System (BESS) which has already been deployed in small scale at the Sere wind energy facility. Across the border in Zimbabwe, Distributed Power Africa has employed Tesla battery systems in its cell towers and sold units to local firms to mitigate against rolling blackouts. Shepherding a mixed generation and supply of renewable and non-renewable sources to cyclically coincide with demand and generation peaks across national and regional boundaries, will quickly become too complex to do efficiently, and this is where the deployment of AI systems will come to the fore. The development of 5G technology will also allow IoT systems to rapidly analyse and share information about the state and usage of electricity, and when coupled with AI can provide an analytical element with the capacity to gauge and predict future demand needs and preemptively inform energy operators of supply requirements and maintenance. When combined with blockchain technology it will allow for the tabling of secure databases on billing and tariffs, allowing for dynamic energy trading across regions in keeping with demand at the lowest cost to producers and consumers. Smart meters will also greatly aid national power utilities in revenue collection, which has historically been an obstacle in practically all African countries. The EAPP, SAPP and WAPP will have a particular need for such systems in the near future as more and more renewable energy is fed into the grid and increasingly changes hands across borders. Africa’s two biggest economies, Nigeria and South Africa, have already begun to deploy these in a limited capacity, with 2015-startup The Sun Exchange launching the peer-2-peer solar leasing market for photovoltaics in South Africa and RA365 employing the use of AI to plot the best locations for deployment of solar tech in Nigeria. 5
Page 1 and 2: AFRICA’S ENERGY DEVELOPMENTS COMP
Page 3: Africa INSIGHTS NEW TECHNOLOGY AND
Page 7 and 8: AFRICA INSIGHTS Key considerations
Page 9 and 10: AFRICA’S TOP 10 STORIES 3 WEST AF
Page 11 and 12: AFRICA’S TOP 10 STORIES 8 LOCALLY

Adams Adams Advisory Insights - May 2020

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