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Italy Wants to Import Electricity from Egypt

Italy has proposed a $2.8Billion electrical interconnection project across the Mediterranean with Egypt

The Italians submitted a proposal to the Egyptian Electricity Transmission Company to work on a joint electricity interconnection project between the two countries with a capacity of between 2,500MW and 3,000MW.

The Europeans have reportedly proposed signing an MoU to begin conducting a feasibility study for the project, the costs of which the Italian side would cover. The Italian proposal also commits the country to securing funding from Italian banks and European financing agencies for the project, were it to go ahead.

Egypt has built a large surplus of electricity generation capacity over the past few years — and Europe is looking for energy suppliers.

Italy’s proposal comes as Europe faces an unprecedented energy crisis as a result of Russian fossil fuels. Egypt has already been preparing to link its electricity grids with Greece and Cyprus through a subsea cable as part of the $4Billion EuroAfrica Interconnector project since 2018, and May 2025 is the on-stream date for the $1.8Billion 3,000MW Egypt-Saudi electricity interconnection. The Egyptian grid is currently linked with Jordan, Palestine, Libya, and most recently Sudan.

Uganda to Re- Nationalise Its Electricity Industry

The Ugandan government wants to “minimize expensive private capital” in the electricity sector by bringing it under direct state management and control.

The country’s public officials are disappointed with the execution of the 20-year concessions granted to two companies for generation and distribution and have decided not to renew them.

Eskom’s generation licenses- to run two hydropower stations- will expire in March 2023 and will not be renewed.

Umeme Limited (UMEME.UG)’s monopoly rights to distribute power in Uganda, will not be renewed when it expires in 2025.

In their place the Uganda National Electricity Company Limited (UNECL), a state-run company which is currently under formation, will manage the generation, transmission and distribution segments of the electricity sector. UNECL, will likely be structured as a Public Private Partnership (PPP) with the state firm as a majority shareholder, according to a statement by the energy, ministry said.

The government hopes, by taking electricity supply back from the private sector, it could enormously reduce costs to consumers.

President Yoweri Museveni has repeatedly complained that expensive private capital was responsible for high electricity tariffs in Uganda, which makes it unaffordable for consumers.

Nigeria’s Electricity Metering Gap: Behind the Numbers are Human Lives

By Adeniyi Adeoloye

12 months from now, it will be a full decade since the privatization of the generation and distribution chain of the now defunct Power Holding Company of Nigeria (PHCN), the state utility enterprise that was the sole player in the generation, transmission, and distribution of electricity in Africa’s most populous country.

The privatization was undertaken largely due in part to the failure of PHCN and its predecessor company (National Electric Power Authority) in turning the corner of value delivery in the power sector in a country of over 200Million people. The failings of PHCN stalled economic growth, industrialization, and impeded the standard of living of an ample size of the population as a result of incessant power cuts and blackouts. Given this reality at the time, many observers and stakeholders alike believed privatizing the power sector was the be all and end all.

So, on November 1, 2013, the generation and distribution arm of the power sector was privatized into six generation companies (Gencos) and 11 distribution companies (Discos). The privatization of the 11th distribution company wasn’t completed until November 2014.

Behind the figures are humans who mostly struggle to pay the estimated bills delivered to them by the distribution companies – in addition to the occasional cost of maintenance of supply transformers and other sundry distribution lines that the discos have abdicated the responsibility to the consumers

Going by unceasing power outage, the unbundling has yet to deliver the benefits that necessitated the denationalization in the first place. The gap in value delivery has been ascribed to non-cost reflective tariffs, energy theft, non-payment of utility bills by consumers, obsolete power distribution infrastructure, and belly-up metering systems, among many other relevant reasons. To tackle this barrage of challenges, money is required. This is one place the Discos fall short.

Given that the Discos are the interfacing entity with the end users of their product offering (electricity), they are responsible for collecting revenue for every service provider in the power sector value chain, and with every sense of reason, effective metering is the substructure upon which efficient revenue collection, the continuity, operationality, and profitability of the power sector rely.

For not meeting up these metering responsibilities, the power sector has been cash constrained, which has led to little investment in infrastructure that will help improve operational efficiency, deliver value and drive down ATC&C (Aggregate Technical, Collection, and Commercial) loss – which was a major basis for selecting the successor distribution companies.  PwC, the consulting giant, reckons that the ATC&C loss is at about 45%.

ATC&C loss is characterised by losses on the distribution lines due to heat on aged lines and vandalism; billing inefficiency and revenue collection ineffectiveness. Even when it is known that the metering of the distribution network of the Discos and the customer’s place of use is key to improving collection and commercial loss, there has been tardiness on the part of distribution companies to undertake mass metering in almost 10 years since they took over. Many unlucky customers without functional electricity meters, have to contend with estimated bills that are generated by the distribution companies who do this by spreading the naira value of the outstanding units of energy not accounted for by metered customers and delivered to their network to the non-metered customers.  For many customers in this category, it is either they are overpaying, given that their electricity usage cannot be accurately gauged, or underpaying the Disco – whichever way it goes, it is a loss to the customer or to the distribution company.

With the aforementioned loss to either customer or distribution company, why then does the metering gap persist? The devil is in the detail. Policy efforts like CAPMI (Credited Advance Payment for Metering Implementation), the MAP (Meter Asset Provider) regulation by the Nigerian Electricity Regulatory Commission (NERC), and more recently the NMMP (National Mass Metering Program) by the Central Bank of Nigeria have barely scratched the surface of the metering gap conundrum.

The CAPMI programme, according to NERC, “provides a platform for willing customers to pay the cost of the meter into a dedicated account jointly managed by the Disco and meter vendor/installer. Once payment has been effected, the customer will have their meter installed within 45 days, by a NERC accredited vendor/installer”. With regard to the MAP regulation, the NERC planned to provide “for the third-party financing of meters, under a permit issued by the Commission, and amortisation over a period of 10 years”. Since April 3, 2018, when the MAP regulation became effective, all distribution companies operating in Nigeria had been obliged to meet their metering targets under the MAP directive. NERC affirms that under the MAP regulation “the electricity bill of customers provided with a meter under the new regulatory framework shall comprise of two (2) parts – energy charge and metering service charge”. The metering service charge payment will be eliminated from the customer’s electricity bill “, upon the full amortisation of the meter asset over its useful life”. And then there is the National Mass Metering Programme (NMMP) by the Central Bank of Nigeria (CBN), whose objectives are to increase the national metering rate, eliminate arbitrary estimated billing, cut down collection losses and shoot up financial flows to achieve 100% market remittance obligations of the Discos amongst other aims – which is hinged upon the CBN giving financing support to Discos and local meters manufacturers for deployment to customers.

As reported by the Nigerian Electricity Regulatory Commission (NERC), the industry regulator, unmetered electricity users as of Q4 2021 stands at 5,741,365 out of the total registered customers base of 10,514,582. To put, ~55% of the recorded electricity customers’ population are unmetered. If these figures are anything to go by, it is that the initiative of NERC has largely not bridged the metering gap as intended.

Despite that the metering gap number can be quoted with ease shouldn’t reduce the cruciality of what the data connotes, that is: unmetered customers over/underpaying whilst the disco loses income or unduly gains at the loss of the consumer. It should be noted that behind the figures are humans who mostly struggle to pay the estimated bills delivered to them by the distribution companies – in addition to the occasional cost of maintenance of supply transformers and other sundry distribution lines that the discos have abdicated the responsibility to the consumers. With these numbers in mind, the need for NERC to come up with a more robust implementable metering policy to overcome the metering gap cannot be overstated.

Adeoloye is a petroleum geoscientist with a strong interest in the entire energy value chain.

South Africa Pushes Away Karpower Gas to Power Project

Turkish owned Karpowership is still unable to get anywhere close to an approval to install a 1,200Megawatt power facility off the South African coast, despite its winning a bid run by the country’s Ministry of Energy.

The project is held up in the crucial environmental approval stage.

Three subsidiaries of the Karpowership Group Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, were among the eight preferred bidders announced on March 18, 2021, for the Risk Mitigation IPP (RMIPP) Procurement Programme, aimed at procuring 2,000MW of power to bridge a looming electricity supply gap.

The power-ship companies were to generate 1,220MW of power from imported Liquefied Natural Gas  (LNG), in what was to be the first formal introduction of natural gas into the country’s electricity grid, through Eskom, the state utility.

But Environmental authorisation for the project was denied in June 2021.

The denial of the latest appeal was made public on August 1, 2022.

This is all contrary to the spirit of the bidding process.  “The projects are required to reach financial close by the end of July 2021”, the Ministry of Minerals and Energy said at the time the preferred bidders were announced. “Due to the urgency to bring power online, this date is not negotiable. It is for the preferred bidders to manage all the risks to reach financial close. First power from the projects is expected in August 2022”.

In denying the appeal, Barbara Creecy, South Africa’s Minister of Forestry, Fisheries and the Environment, said she had “the constitutional and legal obligation not to allow a preventable situation in an environment that may potentially harm the health or well-being, in a wide sense, of another person or persons. The need and desirability of a proposed project should also be considered in this context.”

Ms. Creecy’s department has criticised gaps in the group’s consultation processes. It said that requirements were not met, including public participation and the proper evaluation of the potential effects on the environment as well as socioeconomic conditions.

It added that the potential environmental impact of the project could not be properly evaluated because of the lack of a proper underwater noise study and significant gaps and limitations with other assessments. “The final environmental assessment report was not always entirely convincing in dismissing concerns around heated seawater discharges, which could result in temperature increases of up to 15°C in the vicinity of the powerships,” the Minister explained.




Russians Begin A Nuclear Power Plant Construction in Egypt

The Egyptian Nuclear and Radiological Regulatory Authority (ENRRA) has issued a permit for the construction of the country’s first nuclear power plant.

This permit, along with excavation works at site, is a prerequisite for the start of the main stage of construction of the El-Dabaa NPP Unit 1, to be built in the city of El Dabaa on the coast of the Mediterranean Sea, 300 km North-West of Cairo.

Rosatom, the Russian State Nuclear Energy Corporation, says it will “build a reliable state-of-the-art NPP with reactors based on the Russian VVER-1200 (pressurized water reactor) design of the innovative Generation III+, which meets the world’s highest safety standards, and is successfully operated in Russia”.

ENRRA says that the El-Dabaa NPP “will be the first nuclear power plant of this generation on the African continent”.

It will not be the first nuclear power plant on the continent, though. That credit goes to to the Koeberg Nuclear reactor, one of two nucear power plants in South Africa, with combined generation capacity of 1,800MW.

ENRRA says the NPP will consist of four power units, 1,200 MW each. Rosatom says that “four power units with reactors of this generation are operated in Russia: Novovoronezh and Leningrad NPP sites have two reactors each. Outside Russia, one power unit of Belarus NPP with VVER-1200 reactor was connected to the grid in November 2020”.

The NPP is being constructed in accordance with the package of contracts which entered into force on December 11, 2017. In accordance with the contractual obligations, the Russian party will not only construct the power plant but will also supply nuclear fuel for the whole life cycle of the NPP and will provide assistance to the Egyptian partners in training of the personnel and support of operation and service during the first 10 years of its operation. Under a separate agreement, the Russian party will build a special storage and will supply containers for storing spent nuclear fuel.



Mozambique Starts Construction of 450MW Temane  Gasfired Thermal Plant

Filipe Jacinto Nyusi, President of Mozambique, has laid the foundation stone of the Temane gas and power projects in Inhassoro, Inhambane province.

The act symbolises the start of construction of the Temane Thermal Power Plant (CTT), the Temane-Maputo Electric Power Line (TTP) and a cooking gas (LPG) factory; “projects undertaken by the Government of Mozambique and partners”, Radio Mozambique reported.

Financing close for the project was announced in late December 2021.  Partners include the British energy developer Globeleq; the Mozambican state utility Electricidade de Moçambique, E.P. (EDM) and the South African integrated energy company Sasol.

Debt financing of the $652.3Million project is being provided by IFC, together with its “B” loan participants FMO and Emerging Africa Infrastructure Fund ($253.5Million), US International Development Finance Corporation (DFC) (approximately $191.5Million) and the OPEC Fund for International Development (OPEC Fund) ($50Million). The Multilateral Investment Guarantee Agency (MIGA) has provided up to $251.3Million in political risk insurance to the private sector equity investors. have announced financial close of the Central Termica de Temane power project (CTT)

Electricity from  CTT will be supplied to EDM under a 25-year tolling agreement.

President Nyusi was accompanied on his working visit to the site by Carlos Joaquim Zacarias, the new Minister of Mineral Resources and Energy, along with staff from the Presidency of the Republic and other state institutions.

The CTT is expected to provide electricity to meet the demand of 1.5Million households and will contribute about 14% of the electricity supply capacity available to meet demand in Mozambique..



Gas to Wire Biz: Opportunity Hidden in Plain Sight

In the first week of February 2022, Andre de Ruyter, CEO of Eskom, gave a low down of South Africa’s electricity generation capacity.

One sentence leapt at us from the statement by the head of the country’s Power Utility.

“From a diesel perspective, Gourikwa is full, so we have full availability of diesel reserves there and at Ankerlig, we’re currently sitting at 81%”.

Gourikwa and Ankerlig are two power plants constructed as gas fired facility. But through all their 15+ years of activity, they have consumed only diesel, a far more expensive fuel.  They never were once hooked on gas. It’s an abnormality that the CEO seems, from his statement, to disregard. This is big opportunity for natural gas. Who is grabbing it?

The story is positively different in Algeria, Egypt, Ghana and Tanzania, the countries we highlighted in one of our s first monthly editions of the year. While Algeria is vilified by much of western media for losing its place as a key exporter of gas to Europe, the country has increased its power sector gas burn, consuming 1.85Billion cubic feet per day (1.85Bscf/d) on domestic power generation alone in 2019. To us, that’s a great problem to have. Ghana’s gas consumption increased from 115MMscf/d in 2017 to 315MMscf/d in 20200, driven by the rise in electricity generation and while Tanzania is a much smaller gas market, the demand was stronger in 2021 than in prior years, partly due to lack of supply from hydro-electric generation

We examine the implications of these for investors, for that’s what matters.

Elsewhere, we are following up on drilling activities across the continent; energy transition updates, the current thinking on geoscience of hydrocarbon search and oilfield technology. We provide status updates on production and other market intelligence through our activity maps on Angola, Equatorial Guinea, Ghana, Mozambique and Nigeria. We also publish rig activity spreadsheets on Angola and Nigeria.

We invite you to become a paying subscriber of our monthly harvest, released, in pdf format, to over 20,000 email addresses.  Help yourself to a front row seat, to a clear sight to activities that should put you ahead of the competition.

The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions. Published by the Festac News Press Limited since 2001, AOGR is a paid e-copy publication delivered around the world. Its website remains www.africaoilgasreport.com, and the contact email address is info@africaoilgasreport.com. Contact telephone numbers in the West African regional headquarters in Lagos are +2348124374087, +2348130733523, +2347062420127, +2348036525979, +2348023902519.


South African Power Generation in Headlong Plunge, Seeking the Floor

The much touted 40,000MW South African public power generation capacity, once described as the largest in Africa, has transited to the realm of fiction.

It is official.

The total nominal capacity of SA’s coal power stations is 38,733 MW, reports Anton Eberhard, Professor Emeritus and Senior Scholar, Power Futures Lab of the Graduate School of Business at the University of Cape Town.

“15,439MW is currently broken (40%). 5,505MW is out on planned maintenance (14%). Only 46% of coal capacity is currently producing electricity”, the professor announces on twitter. These translate to less than 18,000MW actual coal fired generation. “So much for ‘reliable base load’”, Mr. Eberhard laments.

Some of the figures Eberhard is quoting (40% broken, 14% planned maintenance), are lifted directly from Eskom’s most recent statement (March 9, 2022), announcing Stage 4 (severe) outage.

What he didn’t add was the 6,000MW of renewable energy supplied to the grid by independent power sources, and the 2,000MW diesel fed generation from combined cycle plants which were designed to be fired by natural gas.

In effect, Eskom, once reputed to be the largest power utility on the continent, struggles to transmit 26,000MW of electricity to Africa’s most industrialized economy. It is racing several miles behind Sonelgaz, the Algerian state electricity firm, the only state power company among the continent’s largest five economies, which delivers power to 100% of the population.

Ethiopia Starts Generating Electricity from Africa’s Largest Hydropower Project 

By Okot Njoroge, in Nairobi

Ethiopia has commenced electricity generation from the Grand Ethiopian Renaissance Dam (GERD).

GERD is Africa’s largest hydropower project, with 6,000MW capacity, more than double Ethiopia’s current generating capacity, and will rank among the world’s 10 biggest hydropower plants.

The plant, sited on the Blue Nile River in the Benishangul-Gumuzregion of western Ethiopia, started generating 375 megawatts of electricity from one of its turbines on February 20, 2022.

Estimated to cost anything from $4Billion to $6.4Billion at full completion, it is largely financed by government bonds. 

Ethiopia’s first phase filling of the dam was in July 2020, during which 4.9Billion cubic metres of water was collected. The second phase, in 2021, raised the volume to 18.4Billion cubic metres of water. The 74Billion cubic metre-capacity dam is expected to take five to seven years to fill.

An influential, strident critic of the project is Egypt, which considers GERD as a significant threat to its water supply. Egypt lies downstream of the Nile and has called on international organizations, including the United Nations, to stop Ethiopia from filling the dam while the three countries most affected: Egypt, Sudan, and Ethiopia, agree on how to fill it. Egypt’s President, Abdel Fattah El Sisi, has frequently declared that his country’s national security is a red line and stressed the need to reach a binding agreement on the filling and operation of the dam.

Nigerian Grid Stability Improves, But Power Generation Down, in 2Q 2021

The Nigerian Electricity Regulatory Commission (NERC) reports “a sustained improvement in grid stability during the second quarter of 2021” in its latest quarterly report.

“This was a result as there was only a single incidence of Total Collapse (i.e. total blackout nationwide)”, the agency says.

There was also no partial collapse (failure of a section of the national grid) during the quarter under review, NERC notes.

Nigeria’s electricity transmission grid is one of the weakest in the country’s electricity value chain. Power producers often lament the fact that their gross output can hardly be wheeled to the distribution companies, because of the persistent failure of the grid.

“To sustain the improvement in the grid stability in subsequent quarters, the Commission has continued to enforce and monitor the compliance to its directive”, NERC declared in the report.

Meanwhile, the improvement in transmission was not complemented by the quality of generation of electrical power in the period under review. During the second quarter 2021, Nigeria’s average of daily available generation capacity was 5,472.10 MW, implying a decline of 8.1% compared to 5,956.23 MW recorded in the preceding quarter. However, the total electrical energy generated was 9,187,337 MWh – 3.27% less than the 9,498,786 MWh generated during the preceding quarter. A total of 8,909,910 MWh (96.98% of total generation) was delivered to the grid during the second quarter 2021, implying that the generation stations used 3.02% of their generation. Meanwhile, station’s own-use is expected to be within 2% in line with the MYTO assumptions. Finally, due to energy export, energy sold on bilateral contracts and transmission losses, only 7,332,949.05GWh was delivered to the Discos during the quarter.

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