CWC

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Egypt Trounces South Africa as the Continent’s Top Electricity Producer

Egypt has reached installed capacity of 55,000 Megawatts of electricity per day, the country’s supervisory minister for energy says.

That is some 3,000MW higher than produced by South Africa, to go by that’s country’s own official figures.But capacity, especially of African infrastructure, doesn’t always translate to actual delivery.

“Starting from 2014 up till the end of 2018, the total capacity added to the network was 25,426 Megawatts”, declares Mohammed Shaker, Egypt’s Minister of Electricity and Renewable Energy.

85% of the power is fuelled by natural gas.

“The 25,426MW was approximately the maximum load we could supply during 2014, which means we already doubled what we have at that time”, Shaker explains.

South Africa doesn’t have that kind of story to tell, as the state power utility grapples with a debt load of about $30Billion, borrowing money on short-term contracts to help it meet its commitments to its long-term loans.

But whereas Eskom is a clear corporate entity, it is difficult to differentiate the Egyptian Electricity Holding company from the Egyptian state itself.

“The installed capacity in Egypt is almost exceeding 55 Gigawatts although our consumption is less than that but we are trying to depend on the operations of high efficiency generators, combined cycle and because of these we could manage the to reduce the consumption of fuel to a great extent and this will be reflected on the cost of tariff”, says the minister, a former Professor of Electrical Power Engineering at the Cairo University.

“Almost 60-65% of the cost of tariff is as a result of the fuel, if we have savings in the fuel consumption, it makes a difference for the costing of electricity”.

 


Diesel Supply Now a National Emergency in South Africa

By Toyin Akinosho, in Lagos

South Africa’s power utility, Eskom, has burned between 20-Million to 25-Million litres of diesel in recent months by running two open cycle gas turbine (OCGT) power plants as a last resort.

Phakamani Hadebe, CEO of Africa’s largest power producer, says the utility has so rapidly burnt up the fuel in a short amount of time that there are no diesel stocks available in South Africa, except for cars and small utilities.

Eskom resorted to the use of OCGT plants which use diesel (because there’s no natural gas supply logistics), as the country’s large “fleet” of coal fired plants are in suboptimal performance.

The Gwourikwa and Ankerlig thermal plants in the Western Cape, commissioned between 2007 and 2009, have a combined name plate capacity of around 2,000MW. They were intended to supply electricity into the National Grid during peak hours and emergency situations. They should originally be fuelled by natural gas, but South Africa’s cluelessness around natural gas utilisation has forced the country to use far more expensive diesel to fire these turbines.

Diesel availability is such a national emergency that Parvin Gordhan, South Africa’s charismatic Minister of Public Enterprises, told a media briefing that Eskom was in discussion with National Treasury and the Auditor-General for guidelines which will allow emergency procurement processes
for maintenance and the purchase of diesel.

Hadebe says that Eskom is expecting a shipment of diesel to be offloaded in the next couple of days and relieve the pressure on the grid by March 22.


South Africans to Pay More for Fuel and Electricity

South Africa’s Department of Energy released the figures for pump prices for Petroeum Products for March 2019 in the same week that the country’s energy regulator announced the response to a plea by the Electricity Utility.

Both announcements mean higher energy costs for the average South African.

Jeff Radebe, Minister of Energy, said that South African motorists would be paying 5% more for a litre of petrol and 4% more for litre of diesel from midnight of March 5 until the fourth of April 2019.

South African pump prices are deregulated, so the calculations are based on the movement of international oil prices as well as the strength of the currency against the US dollar.

If the prices of crude oil fall sharply in the international market, for example and the currency strengthens, motorists would be asked to pay less for diesel and gasoline in the following month.

Contrary to the swing in pump prices however, the tariff on electricity will continue on an upward trajectory.

On March 8, three days after pump prices were announced, the National Energy Regulator of South Africa (Nersa) granted Eskom a 9.41% tariff increase in the 2019/20 financial year. The grant was in response to applications received from the utility in September 2018, praying the regulator for increase in tariff over the 2019/20 year, 2020/21 and 2021/22.

Nersa evaluated this application using the MYPD4 methodology, which is forward looking in nature. Making the announcement at its offices in the capital, the regulator approved allowable revenue percentage price increases of 9.41%, 8.10% and 5.22% respectively over the three-year period.

 

 

 


South Africa To Release Long Overdue Energy Plan

Natural volumes expected to be lowest in the mix

 

By Sully Manope, Southern African correspondent, in Windhoek

The South African Government says it will release the Integrated Resource Plan IRP latest by Friday, August 24, 2018.

The document determines the country’s long-term electricity demand and details how the demand should be met in terms of generating capacity, type, timing and cost. 

The extant edition of the IRP, finalised in 2010, was promulgated in March 2011. Although it sets out the blueprint for likely demand and supply of energy and the type to be delivered between 2010-30, there has been expectations of its revision since 2014. The government itself has fuelled the expectation by repeatedly stating that the electricity demand outlook has changed from that expected in 2010.

That expectation, that the IRP would be significantly revised, has been part of the cause of uncertainty in the country’s energy sector.

That said, the new IRP will show how much gas is expected to be introduced for electricity in South Africa and that itself is a pointer for any investor seeking to play in the proposed South African gas market.

Early revisions of the 2010 plan bumped up the target set for gas from 2,370MW to 3,550MW. Compared with renewables (+9,0000MW) and Nuclear, (being under heavy debate, but expected to be higher than 5,000MW), this is still a minuscule contribution in the proposed total generation of 60,000MW by 2030.

Evidence that the South African government isn’t keen on pumping natural gas into Africa’s largest economy is it lackadaisical attitude to developing the Gas Utilisation Master Plan (GUMP), which has been under development for over five years. GUMP is meant to establish a framework for the investment in gas infrastructure, provide clarity about the role of gas in the South African market, set out the regulatory environment, government commitments and economic prediction for the use of gas and outline  demand, supply, market structure, industry organisation, environmental risks, financing and social impacts.

The country’s Gas to Power IPP Programme, which was announced with aplomb in 2016, has also faced headwinds.


Ghana’s Energy Minister Took The Fall For An “Overpriced” Electricity Deal

BoakyeAgyarko, Ghana’s charismatic Minister of Energy, has become the first in Nana AkufoAddo’s cabinet to be fired by the President.

The economist and politician, who was a vice president of the Bank of New York, was sacked over government’s embarrassment about a controversial power purchase deal, according to the local media.

The press release announcing Mr.Agyarko’s ouster gave no reasons, only saying that the former minister should hand over his office to the Minister of Lands and Natural Resources, John Peter Amewu. In the last week, Amewu has been named the substantive Energy Minister, through a shuttle of cabinet positions announced by President Akufo-Addo.

Agyarko’ sacking came after several weeks of complaints by Ghana’s vocal press and civil society groups about AkufoAddo Government’s handling of the renegotiation of the “Ameri Deal”, a power purchase transaction originally procured by the previous administration.

Agyarko led a committee which reviewed a 2015 electricity transaction entered into by the John Mahama government which the Akufo-Addoadministration promised to review because the $510Million, five year deal with Dubai-based company Africa & Middle East Resources Investment Group (AMERI) was over-priced by $150Million.

The government then tabled, in parliament, AMERI II, a 15-year contract to be taken over by a new company Mytilineos. The ministry claimed the reviewed deal would save the taxpayer $405Million, a claim which the highly influential Africa Centre for Energy Policy (ACEP) immediately declared as misleading.

ACEPnoted that, rather than any savings, the AMERI II deal would cost the taxpayer $937.5Million. Workers of the Volta River Authority, the country’s main generator and supplier of electricity, called for Mr.Agyarko’s dismissal.

That the government then proceeded to withdraw the new deal from debate in parliament, pledging to come back with another reviewed document, is the most significant indication that it accepted it was wrong.


Egypt Targets 9,000MW of Renewables By 2022

By Mohammed Jetutu, North Africa Correspondent, in Cairo

Egypt is working on tripling its renewable energy generating capacity in just four years.  “By the year 2022 we hope that the capacity will be about 20%, which means that we have to have about 9,000MW of renewables after the said year”, Mohammed Shaker, the country’s Minister of Eectricity and Renewable, discloses.

“Here is an opportunity for anyone looking to invest. We generate about 3,655MW in renewable energy plus a fair amount of about 120MW this is actually for everything (hydro and solar) which is in operation and under construction.  We have permission for some allocated areas in Egypt to generate up to 90,000MW from renewables”.

Speaking to a group of businessmen in Cairo, in a meeting sponsored by the American Chamber of Commerce, Shaker says that “the thing to fix” with the procurement of renewables in Egypt is the method of feed-in tariffs. “We are going to stop it, we are resorting to what we call an auction system because with auctions we will be able to get the far better prices. The feed-in tariffs was structured approximately at about $7.1 in peculiar hours but with auctions we can go down to $3.8 or even less because the pricing of the photovoltaic panel is going down very sharply and because of that we not going through auction with large quantity versus small ones one after one to match the reduction happening in the cost of the PV panel”.

Shaker says that his ministry has devised a system called net metering. “If you generate electricity from solar panels on the roof and you are injecting it in the network we will be measuring both from your photo voltaic and the ones supplied from the network and subtracting this from each other. So once your consumption is more than one thousand kilowatt hour per month you’ll be making money out of this because the price is now for over one thousand megawatt is currently 155piastres (1.55 Egyptian Pounds) but it is going to be increasing for the next three years and I will actually publish this but not now”.

Full text of the speech is available here

 


Egypt Installs Five Million Prepaid Meters In Three Years

By Mohammed Jetutu, in Cairo

And there are more than 60 Million LED lamps in the market, Minister discloses
Mohammed Shaker, Egypt’s Minister of Electricity and Renewables, says his ministry has almost five million prepaid meters in the last three years. “Our network we have approximately fifty three million meters and under construction now we have two hundred and fifty thousand smart meters”, he told an audience made principally of members of the American Chamber of Commerce in Cairo.

Egypt runs the largest gasfired electricity market on the continent, with 90% of the 35,000MW installed capacity made of gas fuelled turbines.

Shaker expressed the government’s ambition to turn the many prepaid meters to smart meters. “The smart meter is more modern than the prepaid”, the minister, himself a Professor of Electrical Engineering, told his audience. “It can give you information which can help you to control your consumption from electricity and you can regulate what you are doing. Another one million smart meters is under construction from a Japanese company”.

Mr. Shaker said the government has also distributed 11.3Million L.E.D lamps through the Ministry of Electricity. “It is the efficient lightning which is most important”, he explained “In the market, in my estimation, we have approximately more than sixty million L.E.D lamps”.


How Egypt Plans To Eliminate Electricity Subsidies Entirely By 2021

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 Signs On GE to Optimise Power Delivery At Afam VI

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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Sonangol Inaugurates A Gas Fired Plant In Soyo

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.

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