All articles in the ENERGY TRANSITION Section:


ENI Signs off on BioFuels Study with The Kenyan Government

Italian explorer ENI has signed a Memorandum of Understanding with Kenya’s Ministry of Petroleum and Mining to promote the decarbonization process through new industrial models of the fully integrated circular economy along the whole bio-fuel production value chain.

The European major says that the parties will jointly conduct feasibility studies to develop waste and residue collection as well as agricultural projects, with the purpose of establishing a wide range of feedstock sources that do not compete with food cycles, to be transformed into bio-fuels and bio-products that might contribute to feed ENI’s bio-refineries in Gela and Venice, Italy. The parties will also assess the opportunity of converting the Mombasa refinery into a bio-refinery, as well as the construction of a new plant for second-generation bio-ethanol from waste biomass, leveraging on Eni technologies Ecofining™ e Proesa®.

The agricultural development project focuses on the development of sustainable oil crop cultivations – namely, low ILUC (indirect land-use change) feedstock such as cover crops, castor in degraded lands, croton trees in agro-forestry systems, and other agro-industrial co-products.

The waste and residue collection would be focused to promote and implement a collection system for used cooked oil (UCO) and of other agro-processing residues.

This initiative will contribute to diversifying Kenya’s energy mix and supporting the overall de-carbonization process, while also decreasing the Country’s dependence from imports of petroleum products. Other expected benefits include developing sustainable agricultural activities and a circular economy, producing power from renewable sources, fostering the economic competitiveness of the local industry, and creating new jobs.

“The agreement contributes to the objectives of the Paris Agreement on Climate Change and to the UN Sustainable Development Goals”, ENI declares in a release. “The projects also contribute to the implementation of the Kenya Bioenergy Strategy, Updated Nationally Determined Contribution, Kenya’s National Development Plans, including Kenya Vision 2030. Also, the initiatives are in line with ENI’s commitment to play a pivotal role in the decarbonization process and with the Company’s target to become palm-oil free by 2023 and to double bio-refineries capacity to around 2Millilon tons by 2024”.

ENI has been present in Kenya since 2013 through its subsidiary ENI Kenya.


ENGIE Angles for Leadership in Nigeria’s Mini-grid Renewable Energy Sector

PARTNER CONTENT

ENGIE is projecting portfolio investment budget of about $100Million in Nigeria’s solar Mini-grid sector between now and the year 2025.

The company, one of the ten leading renewable energy developers in Africa, has created a subsidiary to capture the solar home system and mini-grid market in Nigeria and Ghana, two countries where grid-scale solar and wind opportunities are not on the radar of governments, but which have sizeable markets to take advantage of off grid services.

The new subsidiary integrates a company formerly known as Fenix International, a widely known participant in Nigeria’s pay-as-you-go (PAYGo) solar industry, as well as ENGIE Mobisol, a solar home systems company and ENGIE PowerCorner a mini-grids provider, under one entity and one name – ENGIE Energy Access.

ENGIE Energy Access Nigeria says it plans a phased deployment of Mini Grid power stations across underserved rural communities around the country, adding that the company is currently operating in eleven states of the federation and has completed a Mini Grid plant in Niger state, right in the geographical centre of the country. ENGIE anticipates spending between $120,000 to $500,000, on each of the planned 300 grid assets to be completed by 2025 in Nigeria. That number is 30% of the planned target of 1,000 plants across Africa.

ENGIE, credited with construction and operation of Africa’s largest wind farm to date: the 300MW Tarfaya Wind Farm in Morocco, was formed in 2008 through the merger of Gaz de France and Suez. It is thus a large, independent electricity producer while Fenix International started operations in Nigeria back in 2018 as part of ENGIE’s ambition to expand its footprint in Africa.

ENGIE Energy Access Nigeria says it is in a unique position as the only energy player offering end to end off-grid energy solutions with both solar home systems and mini-grids under one roof. “As Fenix International, we only offered solar home systems, and with ENGIE Energy Access we are now able to offer both solar home systems and mini-grid solutions to our customers. Our decentralized solutions cover the full spectrum of energy needs from basic lighting and phone charging (with our basic kit selling for $108 (or ₦44,500) and can be paid off in 20 months) to more advances systems for households all the way to powering productive use equipment to promote entrepreneurship and boost economic activity in rural communities across Nigeria.

 


Egypt’s Red Sea Resort to Generate 5MW from Solar PVs

The management of Soma Bay, a holiday Resort on the Red Sea in Egypt, has inked a set of agreements with TAQA Power to install solar photovoltaic (PV) facility on the resort.

The first part is a PPA (Power Purchase Agreement); stipulating TAQA Power to invest in building and operating a PV station with the capacity of 3.8 MW, over the course of a 9-month period, and on the land owned by Somabay. 

Subsequently, TAQA Power is entitled to a concession management agreement of the solar power station for 30 years. The second part of the agreement is an EPC Contract “Engineering, procurement, and construction”; where in  TAQAPower is to design, deliver and install another PV station, with a 1.2 MW capacity, and then transfer its management to Abu Soma Touristic Development (ASDC). The total contracted capacity of both stations is up to 5 MW.”

“TAQA Power’s agreement with Abu Soma Touristic Development counts as a model for utilizing renewable energy and capitalizing on its economic value,” says Samy Abdelqader, TAQA Power’s Cheief Executive officer.

Somabay is one of Red Sea’s most prominent coastal destinationand one of Africa’s most sought-after tourist sites. The 10 million square metre peninsula south of Hurghada, which harbors an exquisite recreational sandy beach along its 11KM coastline, says a statement on the website of Abu Soma Touristic Development, which manages the bay. “Our primary objective is to generate the power required using solar energy to reduce electricity and water desalination cost, thereby closing the gap between our consumption and distribution demands.”


The Greening of BP- Phase 2: Becoming an Investment Vehicle?

By Gerard Kreeft

Helge Lund, BP’s Chairman of the Board, is perhaps ideally suited to take BP to its next challenge: the first super-major to become an investment vehicle which is both green and can guarantee shareholders a handsome return on investment. 

Lund is a veteran of oil and gas politics, having served as Equinor’s CEO for 10 years, and CEO of British Gas before it was taken over by Shell. As Board Chairman of BP, he is chartering BP’s green future. Not only has he overseen the company’s transformation to becoming greener, he is in the process building an investment structure, which now requires only a few skilled accountants. The company has either sacked employees or will be delegating BP’s headcount to its joint ventures. The goal is becoming lean and mean, reducing costs and hopefully increasing margins. What to

date has happened?

What BP Promised

In 2020, BP painted a glowing portrait for its shareholders of how it would reach the promised green land:• An underlying EBIDA (Earnings before interest, depreciation and amortization) of between 5% – 6% per year through to 2025 with returns in the range of 12% – 14% in 2025 – up from around 9% today.• After allowing for the impact of divestments, and reflecting the expected share buyback commitment, EBIDA per share is expected to grow by 7%- 9% per year through to 2025.• From 2025 onwards, when its low carbon projects start to kick in, expect growth of between 12%- 14% to be maintained.• BP has announced it wants to reduce its oil production by 2030 by 40%. • According to BP, its $25Billion divestment will provide the basis for up-scaling its low-carbon business. A pipeline of 25 oil and gas projects, and additional 18 projects in the pipeline are also key

factors.• BP also announced that it would be spending $5Billion per year to green itself and

by 2030 will have 50GW of net regenerating capacity.  To date the company has a planned pipeline of 20GW of green generating capacity.

To date, BP has taken the following green steps: 

BP and Ørsted announced that they will jointly develop a full-scale green hydrogen project at BP’s Lingen refinery in Germany. The two firms intend to build an initial 50MW electrolyser and associated infrastructure, which will be powered by renewable energy generated by an Ørsted offshore ‎wind farm in the North Sea and the hydrogen produced will be used in the refinery.‎ 

BP and Equinor revealed that BP would become a 50% partner, of the non-operated assets Empire Wind(Offshore New York State) and Beacon Wind (Offshore Massachusetts). BP and Equinor will jointly develop four assets in two existing offshore wind leases located offshore New York and Massachusetts that together have the potential to generate power for more than two million homes. BP is to pay Equinor $1.1 billion for interests in the existing US offshore developments and to form astrategic partnership to pursue other offshore opportunities together in the fast-growing US market.

Most recently, BP joined Statkraft and Aker Offshore Wind in a consortium bidding to develop offshore wind energy in Norway. The partnership – in which BP, Statkraft and Aker Offshore Wind will each hold a 33.3% share – will pursue a bid to develop offshore wind power in the Sørlige Nordsjø II (SN2) licence area. According to the consortium SN2’s favourable location provides power export access to local and adjacent markets. The consortium also intends to explore opportunities to provide clean power to electrify offshore oil and gas facilities. 

BP is to purchase 9GW of solar development projects in the US from independent US solar developer 7X Energy. The acquisition represents a significant step towards developing its net renewable generating capacity to 20GW by 2025 and to 50GW by 2030.

Finally, BP and ENI have stated that they will be merging their assets in Angola into a joint venture, possibly with a view to also bringing in other African assets. This could include:

Algeria, where BP has helped to deliver two major gas developments at Salah Gas and In Amenas, both of which are joint ventures with Sonatrach and Equinor.

BP currently produces, with its partners, close to 60% of Egypt’s gas production through the joint ventures the Pharaonic Petroleum Company (PhPC) and Petrobel (IEOC JV) in the East Nile Delta as well as through BP’s operated West Nile Delta fields. 

In Mauritania and Senegal, BP and its partners are developing the Greater Tortue Ahmeyim gas field with a 30-year production potential. The field has an estimated 15Trillion cubic feet of gas and is forecast to be a significant source of domestic energy and revenue.

What will happen to BP’s 20% share in Russia’s Rosneft which comprises three oil and gas joint ventures? Maintaining a presence in Russia could be very strategic, given the country’s oil and gas assets and the fact that a green strategy is still waiting to be discovered.

The New Energy Players

The speed with which BP has unveiled its strategy indicates that it wants a seat at the green table,occupied by the new energy elite-Engie, Enel, E-on,Iberdrola, Ørsted, RWE, and Vattenfall- who have pole positions in determining the direction of the global renewables market. Is BP’s $5Billion per year investment to green itself and its goal of 50GW net regenerating capacity by 2030 enough to warrant it a place at the green poker table?  Perhaps a starting position, but hardly enough to be classified a heavy-weight, green poker player! Consider the competition:• Engie: in 2021 will spend €11-12Billion on investments across a broad swath of sectors including solar, wind (on and offshore), hydro plants, biogas, and developing gas and power lines, and will have 33GW of global renewable installed capacity by 2021.• Enel: strategic plan outlines total investments of €190Billion by 2030 and tripling renewable capacity to 145GW. • Ørsted: by 2030 will have installed capacity of 50 GW. • Iberdrola: in the period 2020-2025, will be spending €75Billion on renewable energy and has a pending target of 95GW of installed wind capacity.• RWE: by 2022 RWE will have 28.7 GW of installed wind and solar capacity.• Vattenfall: In the Nordic countries Vattenfall has low emissions with practically 100% of the electricity produced based on renewable hydro-power and low-emitting nuclear energy.

Then there is the paradigm that BP and the other majors have to face: an oil company becoming an energy company. The oil company strategy: high risk = high returns being replaced by high risk= low/no returns. 

New energy companies by contrast- Engie, Enel, Iberdrola, Ørsted, RWE and Vattenfall- all are low risk: their dividends are competitive with the oil majors. Iberdrola has a 5% dividend planned for 2021, and Enel  paid 5.15% in 2020, and Engie 4.77% in 2019. Their stock prices are steady and positive. Their green strategy has been delivered, in place and accepted by the investor community.

It should not be surprising that the investor community is wondering how a transformed BP can become an energy company promising to deliver results that other energy companies can only dream about: an EBIDA per share of between 7%- 9% per year through to 2025 and from 2025 onwards when low carbon projects start to kick in growth of between 12%- 14%.

Answers may start to appear more quickly than we realize.

Charles Donovan, Director of the Centre for Climate Finance and Investment at Imperial College and lead author of a recent study released by Imperial College and the IEA (International Energy Agency) found that renewable energy investments are delivering massively better returns than fossil fuels. The study(May 2020) analyzed stock market data to determine the rate of return on energy investments over a five-and 10-year period.

Renewables investments in Germany and France yielded returns of 178.2% over a five year period, compared with -20.7% for fossil fuel investments. In the UK, also over five years, investments in green energy generated returns of 75.4% compared to just 8.8% for fossil fuels. In the US renewables yielded 200.3% returns versus 97.2% for fossil fuels.

Green energy stocks were also less volatile across the board than fossil fuels, with such portfolios holding up well during the turmoil caused by the pandemic, while oil and gas collapsed. Yet in the US which provided the largest data set, the average market cap in the green energy portfolio analyzed came to less than a quarter of the average market cap for the fossil fuel portfolio—$9.89Billion for the hydrocarbons versus $2.42Billion for renewables.

Speaking to Forbes.com, Donovan said “The conventional wisdom says that investing in fossil fuels is more profitable than investing in renewable power. The conventional wisdom is wrong.”

Conclusions

That BP has taken the step of becoming an investment vehicle is a bold and radical step and could create a number of exciting investments. BP’s strategy is in place. Now the implementation.

The various joint ventures could provide new possible investment options, given the decentralized decision-making and shorter lines of communication.

BP’s strategy is one being developed and watched by the other majors. How long can the other majors including ENI, Equinor, Shell, and TOTALEnergies continue to balance the various investment balls in the air, hoping to fund both their exploration and development assets and their renewables? This can continue for a short time but ultimately more strategic decisions have to be made. More crossovers between the oil majors and the new energy players. Also, more mergers downstream. In short, a total revamp of the energy value chain.

The oil majors have helped propagate their own myth that fossil fuels yields are indeed better than renewables. With BP proclaiming it is now an energy company the company may have a lot of explaining to do to convince its shareholders that their return on investment and their golden dividend can be guaranteed.

Is not BP’s strategy to become a partner with Equinor in its US offshore wind projects, and their decision to partner with Ørsted at BP’s Lingen refinery in Germany to produce hydrogen the most visible evidence that the energy value chain is starting to produce new alliances?

In Africa, the BP-ENI joint venture could set off a series of mergers and acquisitions among the other majors and national oil companies. Perhaps with a new strategy in place renewable energy in Africa headed by the majors may become a serious part of the mix.

Finally, do not be surprised that the BP’s Net Zero Scenario of reducing fossil fuels to 20% of today’s share of primary energy by 2050 becomes a reality. The urgency of the task ahead is virtually a guarantee that this BP scenario will happen sooner rather than later. 2030 and not 2050 could become BP’s new deadline to become CO2 neutral.

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia, and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands. He writes on a regular basis for Africa Oil + Gas Report.


IFC Provides $20Million For Solar Hybrid Systems in Nigeria

The International Finance Corporation (IFC), is providing $20Million in financing for Daystar Power’s expansion project in Nigeria. The company installs solar hybrid systems for commercial and industrial customers.

Half of the money is a loan from the IFC-Canada Renewable Energy for Africa Programme. The other $10Million of the funding is being provided as a local currency (naira) loan directly by the IFC.

Lagos-based Daystar Power installs hybrid solar systems for commercial and industrial customers. These installations allow companies to have electricity, despite load shedding. These small hybrid solar power plants also allow its beneficiaries to reduce their dependence on generators, which are often the only alternative to the instability of Nigeria’s national power grid.

With this particular funding, Daystar says of the $20Million, “we are gaining more than just capital. IFC brings a deep understanding of renewable energy projects and project financing in emerging markets,” says Jasper Graf von Hardenberg, CEO and co-founder of Daystar Power.

In January 2021, Daystar Power raised $38Million from the French fund STOA Infra & Energy, Proparco, the subsidiary of the French Development Agency (AFD) group, and the American bank Morgan Stanley. The solar hybrid system provider also received $4Million from the German Investment Corporation (DEG) for its Ghanaian subsidiary. In all, Daystar Power has raised $62 million since the beginning of the year for its expansion in sub-Saharan Africa.


ENI Signs on Plans to Produce Hydrogen in Egypt

Italian explorer ENI has signed an agreement with the Egyptian Electricity Holding Company (EEHC) and the Egyptian Natural Gas Holding Company (EGAS) to assess the technical and commercial feasibility of projects for the production of hydrogen in the country.

The parties will conduct a study into joint projects to produce green hydrogen, using electricity generated from renewables, and blue hydrogen, through the storage of CO2 in depleted natural gas fields.

The study will also analyze the potential local market consumption of hydrogen and export opportunities. In addition, possible development and business schemes will be evaluated to implement the selected projects.

The agreement is “part of the path that ENI has undertaken to reach the target of eliminating Scopes 1, 2 and 3 net emissions (Net GHG Lifecycle Emissions) and cancelling out the relative emission intensity (Net Carbon Intensity) by 2050, referring to the entire life cycle of the energy products sold”, the company says in a release. “It comes in the framework of Egypt’s strategy for energy transition, diversifying energy mix and developing hydrogen projects in cooperation with major international companies.

ENI is the largest hydrocarbon producer n Egypt. It has been present in the country since 1954 and operates through the subsidiary IEOC Production.


Africa’s Biggest Renewable Energy Developers

By Toyin Akinosho

The biggest developers of renewable energy projects in Africa are names that were rank unknowns 15 years ago.

But since 2011, companies like ACWA, Scatec,  Lekela Power, ENEL, Biotherm, ib vogt, ENGIE, and Siemens Gamesa have become associated with the continent’s largest wind farms, solar photovoltaic plants and concentrated solar power projects.

Africa is host to hundreds of off-grid renewable energy facility under construction, but this article will highlight only those companies involved in relatively large on-grid projects, in particular, those who have been involved in solar or wind projects in excess of 75MW capacity.

Scatec, a Norwegian company claims to have the largest solar energy capacity in Africa (400 MW in Egypt, over 300 MW in South Africa, 40 MW in Mozambique, 300 MW under construction in Tunisia).

But you have to consider the impressive resume of ACWA, the Saudi owned developer which came to international prominence in 2012, when it was announced in both Morocco and South Africa as preferred bidder in a key solar project in each country.

In Morocco, ACWA was granted the Build, Operate and Own (BOO) contract for the 160 MW NOORo I Concentrated Solar Power Plant, the first of several Independent Power Plants (IPP) projects planned by the Moroccan Agency for Solar Energy (MASEN) at the Ouarzazate Solar Complex. It was commissioned in 2016 and 73.1% owned by the company. In South Africa, ACWA won the bid to construct the 50MW Bokpoort CSP Independent Power Project, located in the Northern Cape Province.  In 2014, ACWA acquired a controlling stake in the Khalladi 120 MW Wind Farm in Morocco, an Independent Power Project IPP that had been developed by UPC Renewables. In 2018, ACWA completed the installation of the 200 MW NOORo II CSP Project, developed as the second project for MASEN in the series of planned developments at the Ouarzazate Solar Complex, a 500 MW solar park incorporating several utility-scale solar power plants using various solar technologies. ACWA has since completed NOORo III CSP , the 150 MW capacity third solar facility on the Quarzite complex.

Lekela Power, created by the British owned investor Actis, developed the 250MW West Bakr Wind Farm, a BOO project located in the Gulf of Suez in Egypt. The company also developed the 158MW Wind Farm, Taiba N’Diaye, Senegal’s first utility-scale wind farm. Commissioned on the last day of July 2020, the initial phase of the project is pumping 55 megawatts (MW) of renewable energy into the national grid. When fully completed this year, the Wind Farm will provide 158 MW of electricity to Senegal’s grid, or 15% of the country’s generation capacity. As an added bonus, Lekela plans to invest up to $20Million in community development efforts over the wind farm’s projected 20-year lifespan, which will be a big boost for those living near the project site. Lekela had earlier delivered the 140MW Loeriesfontein 2 in the Hantam Municipality in South Africa’s Northern Cape in 2015; commissioned the 80MW Noupoort Wind Farm in the same country in 2016 and completed the Khobab Wind Farm in December 2017, also in South Africa. These projects were contracted under the Renewable Energy Independent Power Producer Procurement Programme (REIPP). In the last three years, Lekela has also completed the 110 MW Perdekraal East Wind Farm in South Africa’s Western Cape and the 140MW Kangnas Wind Farm in the Nama Khoi Local Municipality in the country’s Northern Cape.

South Africa has proven to be both the breeding ground of startup renewable energy firms and the playground of large, multinational developers. The ENEL group, an outgrowth of the Italian energy utility, operates in the renewable energy space as ENEL GREEN POWER (EGP). The company says that the commencement, online, of the Nxuba Wind Farm, in December 2020, brought its total operational projects in South Africa to eight, with an overall installed capacity of more than 650 MW.

ENEL is developing the Karusa and Soetwater Wind Farms, each with an installed capacity of 140MW, in the Karoo Hoogland District, Northern Cape province, to be completed by the end of 2021. The company’s other completed projects include the 88 MW Nojoli Wind Power plant in the Eastern Cape province (2016) and the 111 MW Gibson Bay Wind Farm also in the Eastern Cape. ENEL has constructed the 82.5 MW Pulida solar power plant in the Free State, the 66 MW Tom Burke Solar Power plant in Limpopo, and the 82.5 MW Paleishuewel Solar Plant in the Western Cape. EGP has announced a joint-venture partnership with the Qatar Investment Authority (QIA) aimed at financing, building and operating renewable energy projects in sub-Saharan Africa. In a first phase, QIA will acquire 50% of EGP’s stake in 800MW of projects in operation and under construction in South Africa and Zambia. ENEL said the JV would combine its industrial expertise with QIA’s long-term investment strategy, in line with the two companies’ sustainability and decarbonisation targets.

ENGIE, formed 13 years ago through the merger of Gaz de France and Suez, is credited with construction and operation of Africa’s largest wind farm to date: the 300MW Tarfaya Wind Farm in Morocco. ENGIE commissioned the 100MW Kathu Concentrated Solar Power (CSP) project, in South Africa’s Northern Cape Province on January 30, 2019. The ENGIE /Toyota Tusho/Orascom partnership developed the 262.5 MW Ras Ghareb Wind Farm project near the Gulf of Suez in Egypt, in December 2019. It is the country’s first project in wind energy to operationalize the Build-Own-Operate (BOO) model.

In Tunisia in 2020, ENGIE and (local operator) Nareva were jointly awarded a 120MW solar independent power producer (IPP) project. The Gafsa plant, a solar PV facility, will supply power to more than 100,000 homes in that North African country. In Senegal, ENGIE is starting construction of two 30 MW solar PV projects. The company has also signed an agreement with the government of Djibouti to build a 30 MW solar PV project there in partnership with Électricité de Djibouti.

BioTherm Energy developed the 117.2 MW Golden Valley Wind Farm, commissioned in June 2019, in the Amathole Municipality in South Africa’s Eastern Cape province. In January 2021, the company finished constructing 100MW Kipeto Wind Farm in Kenya. Biotherm Energy was established in 2003 and in 2008, was supported with $150Million by the private equity firm Denham Capital. At the time it was the largest renewable energy investment ever made in Africa. BioTherm has its sights on projects in 10 countries in Africa.

ib vogt and Infinity Solar inaugurated the first part of the 1,500MW Benban solar complex in Aswan Governorate, Egypt, on 13 March 2018. With an output of 64.1MWp, it is also the country’s first large-scale photovoltaic power plant. At the end of January 2019, ib vogt commenced construction of a portfolio of three additional solar power plants with a total capacity of 166.5MW. The 37 square kilometre  Benban Solar Park in Egypt’s Western Desert, was completed in 2019 and composed of 32 individual plants, each producing 20-50 MW, with financing provided by the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), and other international financial institutions.

African Infrastructure Investment Managers (AIIM) developed the 139MW Cookhouse Wind Farm in South Africa’s Eastern Cape Province. Commissioned in December 2014, it was the first project in the first round of the South Africa”s REIPP. AIIM thereafter acquired, in 2018, majority stakes in nine renewable energy projects that were proposed to contribute 800 MW to the national grid. Through its IDEAS Managed Fund, AIIM acquired a 50.1 percent stake in each of the following solar and wind projects:  Bokamoso – 67.9MW,  Waterloo – 75MW, Droogfontein II – 75MW, Zeerust – 75MW, Greefspan II – 55MW, De Wiltd – 50 MW, Roggeveld – 147MW, Perdekraal – 110MW,  Kangas – 140MW

Siemens Gamesa, currently constructing a 100MW Wind Farm in Ethiopia, is intent on expanding its leadership across Africa, and in turn help a growing transition to green energy across the continent, the company says. The German firm says it is extremely pleased to work in Ethiopia, collaborating with the Ethiopian Electric Power, the country’s power utility and “to promote their drive to install more renewables and meet transformational energy targets.” Siemens Gamesa did not construct the 110MW Perdekraal East and 140 MW Kangnas wind farms in South Africa, but it will run and maintain them.

Abengoa Solar International, a Spanish energy developer has, between 2015 and 2019, commissioned three 100MW solar power plants each on three locations in South Africa. The 100MW Kaxu Solar One (concentrated solar power (CSP)) Plant was commissioned in February 2015; the 100MW Khi Solar One was commissioned in March 2016 and the Xina Solar One was commissioned in August 2017. Although they are each jointly owned with other partners, they were all developed and constructed and now operated and maintained by Abengoa Solar International.

Mainstream Renewable doesn’t own any renewable plant in Africa. But it has constructed sizeable plants for “owners” like Lekela. The 110MW Perdekraal East and 140 MW Kangnas wind farms in South Africa were constructed for the Lekela consortium by Mainstream Renewable. Siemens Gamesa supplied the technology and it is running and maintaining the plants.

Solar Reserve commissioned a 75MW Jasper Solar Plant in South Africa’s Northern Cape province in 2014. Rainmaker Energy commissioned the 100MW Dorper Wind Farm in 2014. Acciona Energia commissioned the 138MW Gouda Wind Farm in the Western Cape Province of South Africa in 2015. The company operates and maintains the plant. Cennergi commissioned the 134MW Amakhala Emoyeni Wind Farm project in June 2016. The plant is 95% owned by Cennergi. Mulilo commissioned a 75MW Solar pl Plant in Copperton, South Africa’s Northern Cape Province in 2016. The Longyuan Mulilo consortium commissioned the 96.48 MW De Aar and the 138.96 MW De Aar 2 North wind projects in November 2017. Emvelo co-developed, with IDCSA the 100MW Karoshoek power plant, 30 km east of Upington. In the Northern Cape Province, commissioned in November 2018.

There you have it, the lead developers of renewable energy projects on the continent.

This article was originally published in the March 2021 edition of Africa Oil+Gas Report.

 


Of Beads and Trinkets

By Gerard Kreeft

The International Energy Agency (IEA) in its African Energy Outlook, 2019, paints a vivid picture of Africa’s situation.

The agency predicts that one-in-two people added to the global population between now and 2040 will be African.

Nearly half of Africa’s 600Million people did not have access to electricity in 2018, while around 80% of sub-Sahara African companies suffered frequent disruptions leading to economic losses.

 The Africa Scenario is a plea for full access to modern electricity by 2030, tripling the average number of people gaining access per year from around 20Million to over 60Million. Grid expansion and densification is the least cost option for nearly 45% of the currently deprived, mini-grids for 30%, and stand-alone systems for 25%.

LPG is used by more than half of those gaining access to clean cooking in urban areas in sub-Sahara Africa; in rural areas, home to the majority without access, improved cookstoves are by far the preferred solution.

Although the African economy will grow four-fold by 2040, energy efficiency can limit primary energy to just 50%. Current electricity demand in Africa is 700 terawatt-hours(TWh) with over North Africa and South Africa accounting for over 70% of the total. In the African Scenario, growth could reach 2300TWh, with much of the additional demand coming from middle and higher income households.

Solar is only 5 GW, less than 1% of global installed capacity. In African Scenario solar overtakes hydropower and natural gas to become the largest electrical source in Africa in terms of installed capacity.

Tripling of the electricity demand requires building a more reliable power system and a greater focus on transmission and distribution to reduce power outages. Significant scale-up of investment in grids and generation is required given that Africa has 17% of the world’s population and just 4% of the global power supply.

Natural gas meets half of North Africa’s fuel requirements, but in sub-Sahara Africa only 5%. Gas will rise to 24% by 2040, mainly to power industry.

 Green help from the oil majors?

Will the IOCs produce green energy in Africa? According to Toyin Akinosho, Publisher, African Oil and Gas Report, African oil and gas revenues are financing the energy transition in the rest of the world:  ” the oil majors are funding clean energy from the balance sheet of dirty oil.”

Take TOTALEnergies.

The company is stimulating new renewable energy on a global basis while dispatching oil and gas projects in Africa. The French major’s lead in taking on board renewables as part of its reserve count, would be expected to set a precedent for other renewable projects in Africa, thus helping the continent move forward with the Energy Transition. Unfortunately, this has not proven to be the case.

Around 30% of TOTALEnergies production is in Africa but less than 0.5% of its new energy investment will directly benefit the continent. Yet according to Akinosho, TOTALEnergies is the best African renewable energy investor out of the six majors which include:

ENIlaunched with fanfare the installation of a 14KW solar system in a medical facility in Angola. In Egypt where ENI is a major player the company has not featured in the country’s relatively aggressive renewable energy plan.

BPwhich has pumped over a billion barrels of oil in Angola in the last 20 years has excluded Africa from all of its renewable energy plans.

Equinor-which pumps 120,000 barrels of oil equivalent per day in Angola also has no plans for renewables.

Chevron’s focus is not so much about investing in stand alone renewable projects but increasing renewable power in support of its business to lower its carbon intensity.

Shell-will likely take out $7.5Billion out of Nigeria between 2021-2025. Shell has funded some offgrid projects through solar developers in Nigeria, which basically represents Shell’s footprint in Africa.

If Big Oil is indeed shifting African oil money outside the continent to finance the energy transition elsewhere, what steps should be taken to ensure that Africa’s oil money is indeed used for Africa’s energy transition?

This is perhaps highly relevant at a time when national oil companies have to fill the vacuum being vacated by the international oil companies. Think of the upcoming merger between the Angolan activities of both BP and Eni, possibly to be followed by other African activities.

Jason Bordoff, Columbia Centre on Global Energy Policy, recently indicated that any shift away from the major oil producers could in the short term ..  “benefit the world’s leading petrostates, that would increase the share of global supply controlled by OPEC+ and increase the cartel’s control of world oil markets.”

According to Bordoff private equity companies are turning their attention to assets being aborted by the oil majors. Private equity now accounts for 10% of all North Sea production, up from virtually zero in 2014. Bordoff concludes that Chinese banks have also shown an ability to fill these investment slots.  Could Sub-Sahara Africa become part of this scenario?

New independent start-ups could become part of the equation.  Look at Nigeria: today 25 private companies produce nearly 400,000bopd.  If green incentives become part of the mix, growth is assured.

Africa’s power sector: The new energy players?

A final part of the equation could well be Africa’s national power and transmission companies, normally seen as a distinct and separate category and not associated with the oil and gas industry. Their story has in many cases not been properly told. Yet in a period of great transition, we can anticipate movement from the power sector.

Will the international power companies – Enel, Engie and EDP, who have broad international project experience across Africa-provide their African national power colleagues a helping hand?

 Enel

Antonio Cammisecra, CEO of Enel Green Power symbolizes Enel in Africa. “We’re Africa’s top privately-owned renewable energy operator. This is something we can definitely feel proud about but still, it’s a drop in the bucket if we consider the sheer size of Africa’s untapped potential and the huge amount of energy it needs.”

The company claims to be Africa’s largest independent renewable energy player in terms of MW installed. According to Enel’s 2019-2021 strategic plan the Enel Group is investing around €700 million in the continent, building 900 MW of wind and solar capacity.

In South Africa the company has 1.2 GW generating capacity scattered over 13 projects across the country.

In Ethiopia a 120 MW solar power plant has been installed in Metehara, Oromia Region.  All net electricity generated by the plant is delivered to the power grid. This project contributes to the achievement of Ethiopia’s electricity master plan for solar installation target of 300 MW by 2020.

In Morocco, Enel Green Power has led a consortium to complete the construction of the Midelt wind power plant, with a capacity of 210 MW. Morocco’s Integrated Wind Power Project will have a total capacity of 850 MW.

Morocco already produces some 3GW of renewable power and aims to increase its renewable production capacity to 52% by 2030. In 2008 the country imported almost 98% of its fuel, oil and gas, and therefore choose renewables to become more energy independent.

In Zambia Enel developed, built, owns and operates the 34 MW Ngonye solar PV facility, located in southern Zambia. Power will be sold to the country’s state-owned utility ZESCO through a 25-year power purchase agreement.

 Engie

Gillian-Alexandre Huart, CEO of ENGIE Energy Access, is Engie’s man in Africa. The company’s Access to Energy business on the continent, is tasked with providing millions of households and businesses across the continent with clean and affordable energy.

Engie’s Energy Access is now one of the leading off-grid, Pay-As-You-Go (PAYGo) solar and mini-grid solutions providers in Africa, serving over one million customers and impacting more than five million lives in nine countries – Uganda, Zambia, Kenya, Tanzania, Rwanda, Nigeria, Benin, Côte d’Ivoire, and Mozambique.

Engie Africa counts nearly 4,000 employees, and has 3.15 GW of power generation capacity. The group has more than 50 years of experience on the African continent and has the unique ability to implement integrated solutions all along the energy value chain, from centralized electricity production to off-grid solutions (Solar Home Systems, mini-grids) and energy services.

 EDF (Électricité de France)

EDF partners with innovative start-ups to provide energy and services to a rural clientele in South Africa, Côte d’Ivoire, Ghana, Senegal, Kenya and Togo.

Such services enable more than 1Million people to light and power their low-consumption household appliances or also to be equipped by solar powered water pumps, thereby significantly improving their crop yields.

The company plans an extensive expansion of its solar and wind activities throughout Africa in the coming years.

 Some final considerations

Recently IRENA (International Renewable Energy Agency) and AfDB (African Development Bank) have jointly announced support of low carbon projects to enhance the energy transition. IRENA in its Global Renewable Outlook states the sub-Sahara Africa could generate as much as 67% of its power from indigenous and clean renewable sources by 2030. In the energy transition this would increase welfare and stimulate the creation of up to 2Million green jobs by 2050.

Certainly public-private partnerships should be part of this mix. Governments to ensure a broad basis of support and energy companies who have the know-how and project management skills. A key bonus for oil/energy companies is knowing that renewables can be added to their reserve count.

Developing Africa’s Green Deal should be the key theme for a new partnership among oil and gas companies, national oil and gas companies and electrical and transmission companies. Such collaboration should work closely with The Clean Energy Corridor which aims to support integration of cost-effective renewable power options to national systems, promote its cross-border trade and support creation of regional markets for renewable energy.

The Clean Energy Corridor initiative has two African components: (1.) African Clean Energy Corridor (ACEC) for the member countries of Eastern and Southern African power pools.  (2.) West African Clean Energy Corridor (WACEC) within the Economic Community of West African States.

Gerard Kreeft, MA (Carleton University, Ottawa, Ontario, Canada) Energy Transition Advisor, has more than 30 years’ experience in the energy sector. He was the founder of EnergyWise.  He has managed and implemented oil and gas conferences in Alaska, Angola, Brazil, Canada, Kazakhstan, Libya and Russia. He is a Canadian/Dutch citizen. He writes on a regular basis for Africa Oil +Gas Report


Construction Starts on Mozambique’s Cuamba Solar-Battery Project

United Kingdom-based Globeleq has commenced construction on the 19MWp/15MWac Cuamba Solar PV plant with 2MW/7MWh battery storage in the Tetereane district of Cuamba, Niassa province, Mozambique.

Source Capital, the private equity firm is involved in the $32Million project. So is the Electricidade de Moçambique (EdM). The project is aimed at bolstering the country’s northern grid, including upgrading the existing Cuamba substation.

Cuamba will be the first independent power producer in Mozambique to use energy storage. 

Power will be sold through a 25-year power purchase agreement signed with EdM in September 2020. 

The project is being strongly backed by the Private Infrastructure Development Group (PIDG)’s Emerging Africa Infrastructure Fund, which is looking to provide $19Million debt and the project will also receive a $7Million viability gap funding grant from PIDG and a $1Million grant from CDC Plus to reduce the tariff and finance the storage system.

Spain’s TSK is the engineering, procurement and construction contractor. Globeleq will oversee construction and operations of the plant.


A Hybrid Solar and Battery Plant to go up on the Sukari Gold Mine

PARTNER CONTENT

Centamin has awarded juwi and Giza Systems the contract to construct the world’s largest solar hybrid project at an off-grid mine for the Sukari Gold Mine in Egypt.

The 36 MW solar farm and a 7.5 MW battery-energy storage system will tangibly reduce CO2 emissions of existing diesel power station. It will also reduce the cost of power, juwi says in a release. 

The total project Capital Expense is $37Million but it will lead to between $9-13Million annual savings in diesel cost, Centamin says in a briefing.

juwi is a German renewables energy developer. Giza systems is an Egyptian civil works contractor. 

The solar system designed by juwi will maximise generation with bifacial solar PV modules and a single axis tracking system, taking advantage of the high irradiance at site, the developer explains. Juwi Hybrid IQ micro-grid technology will enable the integration of the solar and battery system into the existing off-grid network and support the operation of the existing power station.

The benefits of the hybrid power solution at Sukari include:

• Reducing diesel consumption by an estimated 22Millionlitres-e per year;

• Lowering carbon emissions by an estimated 60,000 tCO2-e per every year;

• Reduction of all in sustaining costs;

• Reduced exposure to fuel price volatility;

• Increased reliability of the power system.

“The mining industry accounts for 10% of the global energy consumption and many minerals play a vital role for the energy transition. We are glad to support the resource industry on their de-carbonisation pathway with our dependable solar, wind and battery solutions”, juwi adds,

© 2021 Festac News Press Ltd..