Power Leads to Economic Resilience

Africa is intensively pushing to build and grow its economy on the back of increased domestic demand, aggressive infrastructure construction activities and economic interconnection among countries in the continent. In fact, in a recent annual meeting in Rwanda, the African Development Bank (AfDB), presenting its African Economic Outlook 2014, reported that the continent’s economy was expected to grow by 4.8% in 2014 and 5.7% in 2015, approximating its growth figures pre-economic downturn.

The ongoing economic efforts in the continent will, naturally, have to be supported by energy. Gone are the days of organic economies, where economic growth could be achieved through mere human and animal strength. In this day and age, almost all economies rely on power to sustain their activities and produce tangible results. Power has become an integral component of any economy or society that outages and blackouts could bring about devastating consequences.

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Africa’s power scenario
To support Africa’s ambition to achieve economic sustainability, diversity and viability, it will primarily need to boost its infrastructure to support the growth of its various industries. To achieve that, the continent will require massive amounts of power. Does it, however, have enough energy to sustain this power-intensive phase?

The International Monetary Fund (IMF) sounded a warning that an escalating power supply deficiency in Africa may hamper the projected economic growth. It has been documented that some 25 countries in Sub-Saharan Africa were facing an energy crisis, evidenced by rolling blackouts, and that some 30 countries in region had suffered acute energy crises in recent years. While the Key World Energy Statistics by the International Energy Agency reported that electricity generation in Africa rose from 1.8% in 1973 to 3.1% in 2011, the continent still remained to have the smallest share globally, despite being the second most populous continent.

With Africa’s population expected to double to approximately 1.9 billion people by 2050, and with the continent’s industries projected to require power at almost full capacity, the World Bank said that a much higher investment would be needed to at least double Africa’s current levels of energy access by 2030. In fact, it is estimated that the Sub-Saharan region would require more than USD 300 billion in investments to achieve total electrification by 2030.

The power instability: The bigger picture
Sub-Saharan Africa was observed to have absorbed much of the blow of the recent power crisis. Blackout brought cities to a standstill and spelt terminal financial losses to small- and medium-scale companies. Mining, one of the region’s pillar industries, was severely affected, even prompting mining companies to shelve expansion plans and curtail local power usage.

Nigeria, for instance, a country that has three times the population of the Republic of South Africa (South Africa), only has one-tenth of the power generation capacity of the latter, and business in the country are reportedly starting the feel the effects of power interruptions in their daily turnover.

In Tanzania, a blackout that lasted for almost a month was experienced in Zanzibar when the underwater cable lines supplying power to the archipelago failed, owing to a huge surge in demand. As a result, residents needed to shell out USD 10 daily to run diesel-powered domestic generators, while businesses requiring refrigeration or heating had to suspend operations until power was restored.

In Angola, the occasional recession of the water level in some of the rivers affects power production, distressing allied services, like water distribution. Luanda’s water supply firm, EPAL, cited that various areas in the city experienced water supply shortage, owing to challenges related to power distribution.

The Democratic Republic of Congo (DRC), touted to be Africa’s biggest copper producer, in May 2014 advised mining companies in the country to suspend any project expansion that would require more power, amidst a power shortage that, the government said, would take years to resolve.

Even the Republic of South Africa, the region’s largest economy, was not exempt from power-related woes. In a communiqué in June 2014, Eskom, supplier of 95% of the country’s electricity, warned residents of a rolling blackout due to load-shedding, which, it said, was necessary to protect the electricity grid from total blackout. Eskom said it had begun scaling down maintenance to prepare for winter, but in the face of a rising energy demand, particularly during peak hours, it appealed to the public to reduce power consumption by at least 10%. If the power demand does not decline, then, the company said, load shedding would be the last resort to avoid a total power shutdown.

At present, solutions are underway – but these, naturally, will not come without a hefty price and cannot be completed within days or weeks. Economic reports indicated that, at the prevailing growth rate of the demand from industries and residents, the region would have to double its power generating capacity by 2025, at an approximate cost of USD 171 billion in South Africa alone.

In order to sustain this projection, the governments in Africa have identified potential sources of funds, such as power rate hikes and foreign investment. Yet, power hikes could stir social unrest and could prompt industrial entities to cut down on operations, putting jobs and production at risk. Foreign investment agreements, on the other hand, could take time to materialize, and the planning, designing, installation and commissioning of permanent power generation projects may entail several years, if not decades.

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How temporary power plants can help
Power is indeed a fundamental element for any economy to function, as every sector of the modern society, be it domestic, commercial or industrial, is, in a way or another, dependent on electricity. Nowadays, a power interruption affecting critical facilities, like hospitals, airports, telecommunications towers, data centers, mining facilities and oil & gas installations, has the potential to put an entire country, region or city to a standstill, and in light of globalization and economic integration, the consequences could spill over regional, national or even continental borders.

Hiring interim power plants to bridge the gap between the demand and the supply of electricity yields many advantages, particularly when there is a foreseeable delay in the construction of permanent power generation facilities or while waiting for the permanent power plants to be completed.

When time is of essence, rental power companies, like Altaaqa Global CAT Rental Power, are capable of providing solutions as needed, when needed. Utility companies in the region, like Eskom in South Africa, Kenya Electricity Generating Company, Tanzania Electric Supply Company, the Power Holding Company of Nigeria, the Concelho Nacional de Electricidade in Mozambique, the Empresa Nacional de Electricidade in Angola and the Société nationale d’électricité in DRC, among others, can hire temporary power plants in times when the demand outpaces the supply, when the electrical grid becomes unstable due to a spike in electricity requirement or when power distribution networks are unavailable, like in the rural areas. This will allow them to bridge the supply deficit immediately. Hiring power generators can prove to be a viable solution to power supply inefficiency, bridging the power gap while the permanent power solution is still in progress.

With an immediate solution on hand, the governments and the utility companies can avert resorting to raising the prices of electricity or curtailing the supply of power during peak hours. On a greater scope, an instantaneous resolution of Africa’s escalating energy supply challenges will preclude social and political instability and massive financial losses to businesses and individuals.

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The power to go further
The continent that was once regarded as a tail-ender in terms of development, is now making an aggressive move towards economic stability and viability. To sustain the economic growth that Africa is now enjoying, it is imperative that the governments in the continent address the critical issue of chronic power shortage, which could hamper the development of various industries in the countries. The effort that the African governments are putting to address this predicament is commendable, but there exist other entities that can help them to further alleviate the situation. Rental power companies propose solutions that address the issues of urgency, cost-efficiency, reliability, energy-efficiency and environmental safety. It is advisable that utility companies provide for a contingent power solution in cases of power interruption that may lead to operational delays and, ultimately, negative social, political, economic and financial consequences.

IMIESA October coverage cover

The foregoing article was originally published in the October 2014 issue of IMIESA, published by 3S Media, South Africa.

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Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505
rbagatsing@altaaqaglobal.com

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Putting power in the hands of the communities

Kenya has had a taste of the consequences of high costs of electricity and erratic electric power generation. Droughts experienced in recent years had driven water heights in major dams to precarious levels, that power industry authorities were left with no other conceivable choice but to rely on imported fuel to produce electricity. High cost of available fuel in the international market drove electricity prices up – a burden that would have to be passed on to industrial and private consumers that were fortunate enough to be connected to power lines.

While rising energy prices were the bane of these end-users, approximately 90% of Kenya’s rural population and an estimated 45% of the country’s urban residents were yet to gain access to electricity, while a projected 60% of Kenya’s total population still used biomass as a source of energy for cooking.

The energy situation in Kenya was far from being stable, to say the least.

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Kenya’s renewable energy potential

The country’s energy situation represented a daunting affair for any government to try to overturn. But somehow, something has to be started somewhere, so Kenyan authorities trained their gaze on renewable energy sources for solutions. Today, Kenya’s renewable energy sector is touted to be one of the most active in Africa, with investments in wind, geothermal, small-scale hydro and biomass rising from virtually zero in 2009 to approximately USD 1.3 billion in recent years. Kenya is considered to be the largest producer of geothermal power in Africa and is known as a world leader in the number of solar power systems installed per capita.

Kenya’s renewable energy sources hold enormous potential. For instance, experts from the African Energy Policy Research Network 2004 observe that, at an average, Kenya receives an estimated four to six kWh per square meter per day of solar insolation, which is equivalent to about 300 million tons of oil. The study adds that most areas in the country can enjoy the benefits of solar energy, because they receive more than six hours of direct sunlight per day.

Moreover, according to scientific studies, Kenya has one of the best wind resources in the world, averaging between three and 10 m/s, with northern Kenya even hitting record speeds of up 11 m/s. Experts suggest that wind energy facilities can be strategically installed along the coast and in areas where agricultural production is counter-intuitive, like in the Northeastern Province. The Lake Turkana Wind Project currently underway is poised to provide 300 MW of wind power to Kenya’s national grid.

While the country has already been thriving in geothermal energy production, experts say that only two per cent of the country’s geothermal potential has been tapped, adding that the total estimated potential for geothermal power capacity in Kenya is in the area of 7,000 to 10,000 MW. Currently, the Geothermal Development Company has laid out plans to drill 1,400 steam wells to provide steam for up to 5,000 MW of geothermal power capacity by 2030.

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It is not just power; it is empowerment

Beyond providing large-scale additional power to Kenya’s national energy generation capacity, renewable energy solutions hold a significance much closer to home. Owing to their flexibility and scalability, renewable energy sources could be locally installed in rural and urban communities, and in industrial facilities, encouraging power decentralization and source diversification. Experts opine that this fact can potentially be a workable solution to over-dependence on hydro and thermal power, which could at times be unreliable or expensive. Decentralized and localized renewable energy projects will find merits in terms of mitigating the risks of climate change and environmental degradation, as well as of the rising prices of fuel in the world market. Giving local communities and industrial players the opportunity to “create” their own power will additionally pave the way to fully capitalizing on the renewable energy potential of Kenya and to unraveling further economic growth.

While localized renewable energy projects in Kenyan rural and urban communities and in industrial facilities are still in the nascent stages, there are technologies available that are able to sustain their progress and advancement. Mobile power technologies are designed and engineered to support power generation when permanent or renewable sources meet challenges in sustaining the electricity demand. As national frameworks are created to promote renewable energy investments at the community levels, temporary power stations can provide the power supply that installed renewable facilities are still not able to produce. As wind or solar power plants depend on unpredictable natural elements for “fuel”, interim generators will be able to supplement the generated power in cases when wind or solar supply is insufficient.

As Kenya improves its hydropower and thermal energy generation capacities, veering away from over-reliance on fossil-based power, mobile electric power stations will be able to support existing permanent power infrastructure in times when the national electric power requirement outstrips the supply. Owing to the fact that rental gensets do not require steep initial investment to procure, the Kenyan government will be able to preserve the budgetary allotment aimed at the construction of renewable energy facilities at the grass-root levels.

Empowering local communities

National economic growth may never be sustainable if a significant percentage of a country’s population and industries has yet to be empowered. Today, with the advancement in research and technology, local electrification and community empowerment is within reach. Renewable technologies are maturing, and are now proving to be viable and sustainable sources of energy. As communities and industrial facilities enjoying the benefits of electric power grow in number, the road map ahead of a country’s economy becomes increasingly clear.

Empowerment, however, does not simply mean being connected to the grid. Encapsulated within the very essence of the word is giving rural and urban communities alike the opportunity to care for their environment, to plot their own future and to traverse their own paths to economic and social advancement.

Kenya Engineer Sept 2014 Cover

The foregoing article was originally published in the September-October 2014 issue of Kenya Engineer, published by Intercontinental Publishers, Kenya.

 

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Robert Bagatsing
Altaaqa Global
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rbagatsing@altaaqaglobal.com

Hydropower-dependent Economies: The Big Dry

Many developing countries are gradually embracing the hydropower technology as one of their main sources of electrical power. Countries in Sub-Saharan Africa and in the Middle East are actively pursuing the construction of large dams to develop more hydropower resources. In recent years however, hydropower facilities have been facing power generation challenges, largely owing to variations in climatic parameters brought about by climate change and discrepancies in the pattern of seasonal months. Some countries have been experiencing low amounts of rainfall, and the heavy rains expected to kick in during the wet months have been delayed. As a result, water levels in many reservoirs in developing countries have dropped, causing the amount of electricity generated by hydropower plants to recede.

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Countries that have anchored a major part of their national power supply to hydroplants are bound to encounter economic, social and political obstacles in the face of changes to weather patterns. Myriad case studies conducted throughout the world have shown that lack of reliable power sets off a disastrous domino effect, wreaking havoc in several industries, including utility generation, industrial and commercial production, telecommunications, transportation, urban and rural electrification, mining and petrochemicals. Massive losses in finances and in social services could result in public unrest, often leading to street protests and demonstrations. As the country’s political stability may be threatened by social discontent, transformative investors could lose confidence altogether in pouring in money in ongoing and prospective projects in that country.

Emerging countries can find benefit in studying the impacts of climate change and prolonged summer months before and during the implementation of hydropower projects. Proactive approaches such as this may help them respond and adapt to the effects of climate change, and save costs in maintenance and refurbishment in the long run.

Power for insufficient power
In cases when the power generation capacity of hydropower plants is not enough to meet the existing energy demand during extremely hot months and days of elevated temperatures, there are available technologies that are capable of supporting them, like large-scale mobile rental power generators. Employing temporary power technologies can potentially be an integral part of any proactive approach to counter the effects of climate change on hydropower facilities. For one, interim electric generators represent a cost-effective alternative when supplemental power is required for short periods of time, like during droughts or prolonged absence of rain. As procuring them does not require large capital outlays, provisional power technologies can secure a government or a utility company’s cash flow by not necessitating considerable initial expenditure.

Because every minute counts during potential electricity interruptions, such as load shedding or electric blackouts, solutions to bridge the power gap should be swiftly and rapidly deployed at any given time. Owing to their flexibility and modularity, hiring rental power plants can be a quick and temporary solution for emergency and exceptional situations. Interim power stations are furthermore equipped with cutting-edge innovations that allow their capacities to be ramped up or scaled down, depending on the need of the situation. For instance, when rains start to kick in but are still not enough, utility companies have the liberty to lower the temporary power generation, gradually blending the productions from hydropower plants and rental gensets.

Choosing a power partner
As with the technology, choosing an appropriate interim power partner is an important element of a proactive initiative to mitigate the effects of climate change on hydropower plants. As was established in the foregoing discussion, hydropower generation has increasingly become one, if not the foremost, sources of power for many countries, thus hiring a temporary power provider entails momentous stakes. Imagine, when a country’s economic, social and political stability is on the line, should the government or hydropower companies entrust the power project to companies with little experience in large-scale operations?

There are several factors to consider in choosing a suitable mobile power provider. Governments and utility companies have to be discerning of a rental power supplier’s experience and track record in delivering executable, measurable and sustainable solutions to projects involving hydropower facilities. Industry stakeholders are advised to avoid dealing with backyard companies, which may not be able to deliver the required solutions on time nor on budget. This may create more problems in the long run, leaving vital institutions of a country – schools, hospitals, production plants, airports, telecommunication entities and petrochemical companies – suffering prolonged hours of no electricity and losing millions of dollars in cash and in opportunities by the minute.

Governments and hydropower companies should also consider the manpower expertise and after-sales service delivery of a prospective rental power supplier. A temporary energy partner should have spare parts and human resources readily available to carry-out after-installation support in times of emergency at any given location anytime.

Industry stakeholders should also be keen on a power supplier’s capability of providing flexible, scalable and turnkey solutions for a wide array of requirements. The potential power partner should have the appropriate expertise to study and evaluate a situation and to prescribe the exact solution up to the minutest exigency of a project. In order to translate plans into tangible and executable output, a rental power provider should have adequate and state-of-the-art technologies available in its product line.

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Proactivity is key
Reversing the effects of climate change may involve time – years or, even, decades. It entails paradigm shifts, not only in one country, but in all countries, developed and developing alike. The magnitude of the task at hand is enormous, and governments in several countries are working to commence the change. It remains to be a work in progress, and not all of us may be lucky to see its fulfillment. To support these efforts, governments and utility companies should be proactive and vigilant in moderating the consequences of climate change on the lives of their citizens and customers, respectively. As a sweeping transformation could not implemented overnight, the best thing to do at this very moment is to prepare. Humans of today are fortunate to have acquired the ability to foretell the effects of climate change, and to have on hand solutions to assuage or preclude them. The onus is now on us to put them to productive use.

AWW Sept 2014 coverage cover

The foregoing article was originally published in the September 2014 issue of Arab Water World, published by CPH Media, Middle East.

 

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PRESS INQUIRIES
Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505
rbagatsing@altaaqaglobal.com