The Egyptian Government has again outlined plans to eliminate electricity subsidies, in order to allow some form of free market involving the Private sector.
This time, it pledges, it would work.
To be successful at transforming the electricity supply industry, says Mohamed Shaker, the country’s electricity and renewable energy minister, “we have to get rid of all the subsidies”.
Egypt generates 80% of its power from natural gas fired power plants, which collectively have a nameplate capacity of over 35,000MW.
“If we had gone through our plan started in 2014, we would have completely eliminated subsidies by 2019, but because of the economic reform and a large depreciation of the currency, we had to extend our five year plan by another three years”, the minister told a meeting of the American Chamber of Commerce in Cairo, the Egyptian capital. “In a short while, I will actually announce what will be the electricity price for the next fiscal year and the year after that so everybody knows what will they will be paying for electricity, though I highly recommend that you go and buy L.E.D lamps and go for energy efficiency in order to have a cut for your electricity bill.”
The Egyptian government has been gradually restructuring the tariff in the last three years, Mr. Shaker notes. “We started in 2015, the subsidies rose at that time to 27.3Billion Egyptian Pounds and this was going down if we went through our plan by the year 2018-2019 we will be reaching actually a point where we don’t have any subsidies but because of the economic change (forex deregulation) this jumped from 12.8 to 62.4Billion Egyptian pounds, which was the subsidy last year (2017).
The subsidy this fiscal year is 52.74Billion Egyptian pounds. We are trying to follow the step that by 2021 we will be completely eliminating the subsidies. This will give good chance to the private sector who will like to invest and building a real big power station so when you go to the deregulated power market it can be competitive and then he can make money from his installations”.
Shell Petroleum Development Company (SPDC) of Nigeria has signed a Multi-year Service Agreement (MYA) with GE for its 650MW Afam VI combined cycle power plant located in eastern Nigeria.
The agreement covers planned maintenance for the three existing GE GT13E2 gas turbines as well as one GE steam turbine.
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Angola’s state hydrocarbon company Sonangol has commissioned a gas fired thermal plant in Soyo, located in the province of Zaire, at the mouth of the Congo river.
The city is host to the Angola LNG Plant.
The Soyo Combined Cycle Thermal Power Plant is operated by Luxerviza, a Sonangol subsidiary that manages natural gas plants.
The Soyo plant is producing 22 megawatts of energy for the time being, with two turbines in operation, utilising natural gas from mainly the Angola LNG plant.
As more turbines are added in subsequent phases, the plant is expected to be integrated into the National Energy Network (RNE) to supply power to Luanda, the country’s capital city and commercial hub, as well as other regions of the country.
Angola expects to boost its electricity supply capacity by 2,172MW in six years’ time, after China’s Gezhouba Group completes the Caculo Cabaça hydroelectric complex on the Cuanza River.
Ren Jianguo, deputy director of the Gezhouba Group, contracted by the Angolan government to execute the $4.5Billion project in the Cuanza Norte province, says that the facility is the biggest hydroelectric complex under construction by a Chinese firm in Africa. Plans call for it to be completed in 2023. Caculo Cabaça’s output capacity will be 102Megawatts higher than the Laúca Dam which officially opened in the Malanje province, also on the same Cuanza River, on Friday, August 4, 2017, the same day that President José Eduardo dos Santos laid the foundation stone for the Caculo Cabaça complex.
The current project has an execution deadline of 80 months. It will involve the contracting of more than 10,000 workers during the peak of construction. The Gezhouba Group Co. Ltd will also be in charge of maintaining the complex during a four-year period and training a group of technical personnel who will subsequently be responsible for operating the dam and the electric power production equipment.
The Laúca hydroelectric complex, under construction by the Brazilian firm Odebrecht group, is being launched in phases. What was inaugurated last Friday, August 4, was the first of a set of six turbines, able to produce 334Megawatts. The complex is 156 metres high and 1200 metres long, encompassing an area of 24,000 hectares, including the reservoir. It counts a main power station with six generator groups each able to produce 334Megawatts and a 65Megawatt ecological plant. The project cost around $4.3Billion.
By Sully Manope
Eskom has denied Sunday Times report that it was in severe financial difficulties and down to its “last R20Billion ($1.54Billion)”.
But Africa’s largest electricity company went ahead to confirm it was deep in the red.
“We are currently in a net borrowing position and our ability to continue as a going concern is premised on access to the debt capital markets”, Chief Financial Officer Anoj Singh told reporters. “If something had to happen catastrophic tomorrow that limits our access – and we are not aware of currently – then obviously we would need to approach the National Treasury. [But], at this point in time there is nothing that gives us cause for concern that we would need to approach the National Treasury under current circumstances.”
Reporters wondered which was worse, the fact that you had a net credit of $1.5Billion as indicated by the Johannesburg based newspaper, or that you are in the negative, which Mr. Singh admitted.
The South African minister Finance, Malusi Gigaba had acknowledged, in late June 2017, two weeks before Mr Singh’s annual report commentary that the power utility was experiencing hardship and government was looking to support it further.
Mr. Singh said that the sharp drop in net profit from over R5Billion ($390Million) in the previous financial year to R888Million ($68Million) in 2017 was a consequence of a rise in its asset base, as it introduced generating units at Ingula, Medupi and Kusile. “Those assets have a much higher asset value and, therefore, there is an increase in depreciation.”
Interest costs could also no longer be capitalised as the plants were brought into operation, which had resulted in a rise in interest costs. For all its challenges, Eskom reported a 14.4% rise in earnings before interest, taxes, depreciation and amortisation (Ebitda) of R38Billion ($2.93Billion) and a 7.9% rise in revenue to R177Billion($13.64Billion).
ENEO Cameroon S.A. (ENEO), the Cameroon power utility, will pay an interim gas price of $7.4 per thousand cubic feet of gas to gas producer Victoria Oil &Gas until 31 December 2017.
This is part of the terms that the two companies inked in the deal to extend the current gas supply agreement until the end of 2017.
ENEO Cameroon is the energy joint venture between UK Group Actis and the Cameroon Government. The extension will enable ENEO and the VOG’s100% owned subsidiary, Gaz du Cameroun S.A. (GDC) to optimise all technical and financial elements of a long-term gas supply arrangement aimed at increasing the current contractual power supply of 50MW to beyond 100MW. The take-or-pay components will remain in place.
VOG says that it continues to prove its commitment to Cameroon and have been proud to help provide the Douala region with additional power to meet fast growing demands.
The drilling of the two new wells at Logbaba continues.
“VOG and ENEO are working to create long term solutions, using natural gas for power generation beyond 100MW”, says Ahmet Dick, VOG’sCEO. “We believe there is demand for more than 150MMscf/d in Douala and we are in discussions with third party IPP licensees to supply gas.”
French major TOTAL has applied for power generation licence from Uganda’s Electricity Regulatory Authority (ERA).
It wants to build a 146MW thermal power plant in Buliisa District, in the oil prospective region of Uganda.
Buliisa is bordered by Hoima District to the south and the Democratic Republic of Congo, across the Lake Albert to the west.
TOTAL is leading the $20Billion Uganda Albert Basin oil development project, which will include draining over a billion barrels of waxy crude and transporting them through a 1,444Km pipeline from Hoima to Tanga, the Indian Ocean port town in Tanzania.
The tentative cost of the power project is $117.4Million or 416BillionShs (Ugandan Shillings)
TOTAL is hoping to start the plant’s construction in 2019 if it receives ERA’s approval to generate power. “The project would be financed by 100 per cent shareholder equity”, the company says.
Although the project is, in part, to boost electricity supply in one of TOTAL’s most important African hydrocarbon portfolios, the power generated will be sold to Uganda Electricity Transmission Company Limited (UETCL), the country’s licensed sole buyer of electricity from power generation plants.
UETCL then sells the power it buys to electricity distribution companies such as Umeme and the Uganda Electricity Distribution Company Limited.
Siemens has been awarded the contract to supply key components for five power plant units
in Republic of the Sudan
The agreement was signed in Berlin December 1, 2016, with the country’s state-power utility Sudanese Thermal Power Generating Company (STPGC) to supply five SGT5-2000E gas turbines.
These machines will deliver a combined electrical generating capacity of some 850 megawatts for the Sudanese national grid.
All five power plant units are scheduled to already commence commercial operation at the end of 2017
In addition to the five E-class gas turbines, Siemens’ scope of supply also comprises five associated SGen5-100A generators as well as Siemens’ SPPA-T3000 control systems. Three of the machines are destined for Garri Power Station in the North of the Sudanese Capital Khartoum, while the remaining two units will generate electric power further east in Port Sudan on the country’s Red Sea coast. All five of these turbine-generator sets will be initially commissioned as simple-cycle gas-turbine power plant units. However, later add-on of steam turbines is planned to expand the units to combined cycle configurations.
Nicolas Terraz, TOTAL’s managing Director in Nigeria, says that his company will later in July 2016, commence delivery of gas, through its Northern Option Pipeline (NOPL) to Alaoji power plant in the east of Nigeria and improve electricity supply in the country.
But his comments were coming a full month after Dada Thomas, Managing Director of Frontier Oil, an indigenous gas development firm, told journalists he wished Frontier was allowed to continue supplying gas to the same power plant. TOTAL has a domestic supply obligation to supply gas to Alaoji, but had been unable to do so, which is why the Frontier/Seven Energy partnership was given a one year emergency contract to supply the gas to Alaoji Power Plant.
That contract ends in July, 2016. Last month, at a briefing with journalists, Dada Thomas told Africa Oil+Gas Report’s Foluso Ogunsan that his company had made representation to government that they be allowed to continue the supply. Terraz, on the contrary, told a group of parliamentarians in Lagos in early July 2016 that the delivery of gas to Alaoji, in Aba (Abia State) was among TOTAL’s huge bouquet of projects that are aimed at contributing to the socio-economic development of the country. The 504MW combined cycle Alaoji Gas Power Station was inaugurated in March 2015, but it doesn’t supply more than 200MW of electricity.
The 400MW Gasfired Plant in Obite in TOTAL operated Oil Mining Lease (OML) 58 is not likely to be built. It is official. “What the government is asking us to do is not necessarily to build a Power Plant but to supply the gas”, Nicolas Terraz, Managing Director TOTAL E&P Nigeria Limited, told the Africa Oil+Gas Report.
The Obite Gasfired power plant project has been on the drawing board for about a decade and was part of a queue of Power Plants that were meant to be constructed by Oil Majors in Nigeria between 2003 and 2007 to (1) Put out the Flare and (2) help boost electricity supply in the country.
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