European Travel Bans Are Counter-Productive And Hurting The Oil & Gas Sector –African Energy Chamber
The African Energy Chamber has expressed worry over the continuation of travel restrictions and suspension of visas and travel between Africa and Europe.
According to the Chamber, the development is heavily restraining the oil & gas industry’s recovery efforts.
The oil & gas sector relies on global value-chains and successful cooperation and movement of people, goods and services between foreign and local contractors.
The ongoing travel bans and restrictions of visa issuance are de facto; preventing many projects to move forward and to successfully contribute to the recovery of the continent.
Major international oil companies such as Total, BP, Shell, Eni, ExxonMobil, Chevron or Equinor and independents such as Kosmos Energy, BW Energy, Maurel & Prom or Tullow Oil that operate a major share of Africa’s daily oil and gas production are currently unable to operate fully and safely because of such travel restrictions.
Similarly, they directly impact the operations of the major international services and EPC companies supposed to work on major projects such as Saipem, TechnipFMC, Schlumberger or Halliburton.
“We cannot base our recovery narrative and hopes on the oil & gas sector and at the same time forbid the movement and travel of the workers and employees supposed to make that recovery happen,” declared Nj Ayuk, Executive Chairman, at the African Energy Chamber.
“We are urgently calling for pragmatism and the adoption of realistic measures that put workers’ safety and economic recovery at the center of public and travel policies priorities,” he added.
From West to Southern Africa, landmark energy projects worth billions of dollars have been delayed because of the ongoing pandemic of Covid-19 and its subsequent lockdowns and travel restrictions.
However, as economies gradually reopen, a new wave of travel restrictions, especially on the issuance of visas between Europe and Africa, is adding up to the list of challenges the industry faces to play its key role in the continent’s economic recovery.
“Such restrictions are threatening the efficient operations of global value-chains whose functioning is critical to enable Africa’s energy projects to move forward,” the Chamber argued.
Source:www.energynewsafrica.com
Nigeria : Pirates Kidnap 9 Nigerians From FPSO
Pirates attacked an oil production vessel off Nigeria in the early hours of Thursday and kidnapped nine Nigerian nationals, the ship’s owner BW Offshore said.
The Sendje Berge ship was undergoing maintenance when the attack happened, BW Offshore’s Chief Financial Officer Staale Andreassen told shipsandports.com.ng.
The Oslo-listed company said none of the people remaining on the vessel were injured.
“We are working now with the Nigerian authorities to get those nine people safely back,” Andreassen added.
The vessel, a floating production, storage and offloading vessel (FPSO) that can produce about 50,000 barrels per day, was working at the Okwori oilfield operated by Addax Petroleum, a part of China’s Sinopec Group.
A maritime security firm Dryad Global, citing unidentified reports, said the attack involved three boats and explosives, making it unusual.
Andreassen said he could not confirmed that a number of boats had been involved, but denied that explosives were used during the attack.
Our Journey To Electrify The Continent: Five Years Of The New Deal On Energy For Africa (Article)
By Dr. Kevin Kariuki
Five years into the African Development Bank’s ambitious New Deal on Energy for Africa (NDEA), the Bank’s investments are set to provide electricity access to around 13 million people and deliver about 55,000 km of distribution lines, and 6,700 km of transmission lines, of which 3,200 km are for regional interconnections.
The NDEA called for a substantial increase in investments to realize the Bank’s High 5 priority to “Light Up and Power Africa,” which aims to mobilize finance and expertise to expand access to reliable, sustainable energy for more than 200 million Africans through investments in power generation, inter-connections, transmission and distribution.
This effort is critical to unlocking Africa’s vast economic potential, enabling the growth of value-adding industries and services, and, most importantly, unleashing the ingenuity of the continent’s 1.3 billion people.
The strategy was grounded in the recognition that partnerships are central to its success.
In collaboration with African countries, the Bank’s interventions have ranged from setting up the right enabling policy environment, supporting utilities, to increasing the number of bankable energy projects. Additionally, the Bank is accelerating major regional projects and driving integration through the Program for Infrastructure Development in Africa, whilst also supporting bottom-of-the-pyramid energy access programs.
Priority was given to investments in low-carbon technologies, set to contribute to over 2 GW of additional generation capacity by harnessing the large, hydro, solar, geothermal and wind resources of the continent. Yet this is only the beginning, as much of the work to date has been centered on setting up the right frameworks to mobilize different partners and alternative forms of capital to tackle the various challenges in the sector at country, sub-regional and regional levels.
Indeed, mobilizing partnerships and rolling out countrywide energy transformation are continuous works in progress. In 2019, as testament to the Bank’s efforts in enhancing dialogue and consensus, the G5 Heads of State endorsed the Bank’s Desert to Power initiative, intended to build the world’s largest solar zone across the Sahel by adding up to 10 GW of solar generation capacity through public and private interventions.
The Yeleen Solar Program in Burkina Faso – the first of dozens of similar projects expected to flourish across the Sahel region – will provide energy to 150,000 households in rural areas through solar mini-grids and solar home systems, and an additional 52 MW of grid-connected solar generation, enough to power 30,000 new households.
Achieving the objectives of the New Deal on Energy for Africa will require a significant increase in private sector investments. The Bank catalyzes more private investments into independent power producers and off-grid projects through partnerships with project developers, commercial banks, private equity funds, institutional investors and other development finance institutions. Over the past five years, the Bank’s interventions reached $1.5 billion in private sector operations, corresponding to 1.7 GW additional generation capacity through independent power producers.
In addition to mobilizing concessional resources through bilateral and multilateral sources – notably from the European Union, Green Climate Fund and Climate Investment Funds – the Bank hosts the Sustainable Energy Fund for Africa (SEFA), one of the largest multi-donor technical assistance and concessional capital funds in the continent, designed to catalyze private sector participation in renewable energy.
How Josh Kalisa’s One Africa Business Solution Ltd Is Addressing Energy Gaps In East, Central Africa Using Solar Products (Article)In 2019, the Bank converted SEFA into a special trust fund to widen its interventions into green mini-grids to accelerate energy access to underserved populations; green baseload to support clean generation capacity; and energy efficiency to optimize energy systems and reduce energy intensity. SEFA is expected to contribute to the electrification of more than 7 million households by 2030. The Bank is also actively supporting the mobilization of commercial capital through blended finance solutions. The Facility for Energy Inclusion, which was operationalized in 2019, is a $500 million investment platform organized around two funds – off-grid and on-grid – to provide flexible debt products, including in local currency, to emerging business models in the small-scale renewable energy space. The Facility for Energy Inclusion will contribute to more than 3 million new connections by 2030. To enhance institutional performance and improve the enabling conditions to attract much needed investments, the Bank has also implemented initiatives such as the Electricity Regulatory Index to monitor and benchmark regulatory performance against best practices, the Sustainable Utilities Transformation Agenda, to build sustainable utilities and energy institutions, and the Africa Energy Portal to provide accurate, up-to-date data on Africa’s energy sector. In 2019, the African Development Bank reported that an additional 9 million African households had gained access to electricity between 2015 and 2019, with countries like Rwanda on track to achieve universal access by 2025. Despite this encouraging progress, close to 600 million Africans still lack electricity access and achieving universal access goals under SDG7 still requires greater and swifter efforts to meet the demands of Africa’s growing population. Addressing electricity access remains a costly enterprise, with the International Energy Agency placing the price tag at around $120 billion annually through 2040, four times higher than current levels. While our direct financial contribution is modest by comparison, we are confident that its judicious application to catalytic power projects, innovative financial structures, sector reform processes and acceleration of decentralized solutions will get us far in our mission. Dr. Kevin Kariuki is the Vice President, Power, Energy, Climate Change & Green Growth, at African Development Bank.
Eni To Pay $185 Million To Transocean After Settling Drillship Dispute
Offshore drilling contractor Transocean and Italian oil company giant, Eni have reached an agreement in a dispute related to a contract for the Deepwater Pathfinder drillship.
Under the agreement, Eni will pay Transocean $185 million in four equal instalments.
Transocean announced last Wednesday that Transocean Offshore, a wholly owned indirect subsidiary of the company, entered into a settlement agreement and mutual release with Eni US, providing for the mutual settlement of disputes related to drilling services provided by Transocean Offshore to Eni US.
The services were provided under a drilling services contract that started in 2008 using the 1998-built Deepwater Pathfinder drillship.
The contract start date was in 2010 and estimated revenues for the five-year contract amounted to $1.2 billion.
However, several years into the contract, Eni repudiated the contract for the Deepwater Pathfinder drillship.
Transocean, in turn, contested the termination and took legal action to recover its lost profits.
In January 2018, Transocean secured a multi-million-dollar litigation victory in the case related to the Deepwater Pathfinder contract with Eni.
Eni was ordered to pay Transocean over $185.7 million in damages and pre-judgment interest.
However, Eni in July 2018 Eni urged the U.S. Court of Appeals for the Fifth Circuit to overturn a decision against the company, saying that the trial court misinterpreted the contract when it ruled Eni was in breach for terminating its agreement with Transocean.
Under the settlement agreement announced by Transocean earlier this week, each party agreed to dismiss with prejudice its respective claims and the related lawsuits filed against the other party in connection with the disputes.
Furthermore, each party agreed to pay its own fees and legal costs associated with the disputes.
In addition, Eni US and its ultimate parent company, Eni S.p.A., reactivated Transocean Offshore and its affiliates as a fully qualified worldwide vendor with eligibility for future tenders worldwide by affiliates of Eni S.p.A.
Eni US also agreed to pay to Transocean Offshore $185 million in equal instalments of $46.25 million on 1 July 2020, 1 June 2021, 1 June 2022, and 15 January 2023.
In addition, in connection with the settlement agreement, each of Eni Petroleum US LLC, an affiliate of Eni US, and Eni S.p.A., a parent company of Eni US, executed and delivered to Transocean Offshore, agreements to guarantee the full amount of the payment obligations of Eni US under the settlement agreement.
It is worth noting that Transocean announced the retirement of six floaters back in September 2017, including the Deepwater Pathfinder drillship.
In related news, one of Transocean’s rigs has recently been awarded a drilling and completion services contract on the LLOG-operated Shenandoah project in deepwater of the Gulf of Mexico.
Ghana: Abandoning Fossil Fuels For Renewable Energy Counter-Productive – Senyo Hosi
The Chief Executive Officer of the Chamber of Bulk Oil Distributors (CBOD) in the Republic of Ghana, Senyo Hosi, is cautioning decision-makers in Africa’s oil and gas space not to abandon fossil fuel exploitation to pursue heavy investments into renewable energy like western nations are doing.
He cautioned against prematurely devaluing viable resources that would not be in the interest of the development of the continent.
Mr. Hosi was speaking at the UNU-INRA webinar series on the theme: “Covid-19 and fossil fuels in Ghana – What is the future of hydrocarbon resources sector, post-pandemic?” on Wednesday, July 1, 2020.
Senyo Hosi stressed that while youth unemployment is one of Africa’s biggest problems, the continent can maximize industrialization, which would create jobs among others, by expanding usage of fossil fuels and other natural resources to improve socio-economic development and improve lives.
“Africa is consuming about 15GJ/h [i.e. energy consumption per person] and the whole of North America is [consuming] about 240GJ/h, it really tells you the gap we need to cover to really give our people a real future. Trying to diversify from fossil fuels may not necessarily be the answer.
“I don’t think when the key input for what you really need as energy has the price dropping; it’s time for you to run away from that input. It is rather a time to embrace the input. We need cheaper fuels, so cheaper oils will actually give us cheaper fuels. Our effort shouldn’t be on managing stranded assets, it should actually be on AVOIDING stranded assets.”
Hosi, an oil and gas expert said that Africa cannot abandon its significant fossil fuel reserves and follow western nations’ prognosis to problems associated with climate change and stranded assets.
“If you look at our reserves-to-production ratio as Africa we are in our 40s, Europe is 11, 11 years more and they’re practically done with all their fossil fuel reserves. Why do you think they would actually want to promote fossil fuels? We have about 42 years more to utilize our fossil fuel reserves. If we don’t utilize them in time and they become stranded we would have made big fools of ourselves and we would have missed a major economic transition opportunity.”
Senyo Hosi charged African leaders to pursue solutions that fit the continent with regards to the usage of natural resources and refrain from imitating European solutions that may be costly and make no socio-economic sense.
“It’s time for Africa to look within. Europe is investing heavily in renewable energy, but it’s not time for Africa to start thinking about that. Let them [western countries] carry on with the technology but Africa must optimize its resources, not focus on resource diversification.”
Other speakers at the webinar were Antonio Pedro – SRO-EA Director, Fatima Denton – UNU INRA Director), Rose Mwebaza – Climate Technology Centre & Network (CTCN), Director Daria Ivleva – Adelphi, Project Manager, Selam Kidane – African Group of Negotiators, Legal Advisor, James Murombedzi- United Nations Economic Commission for Africa (ECA) ACPC, Chief and Stephen Yeboah, African Development Bank (AfDB) – African Energy Portal, Policy and Research Analyst.
The fossil fuel webinar series was organized by the United Nations University Institute for Natural Resources in Africa.
India: Solar Tariff Hits A Record Low Of Rs 2.36 Per Unit
Solar tariffs have fallen to a new record of Rs 2.36 per unit, in an auction of 2,000 MW where six foreign companies won projects, while Renew Power was the only local firm among the winners, according to sources close to the development.
The lowest tariff until now had been Rs 2.44 per unit, reached in a Solar Corporation of India (SECI) auction in May 2017 and again in July 2018.
SECI is the nodal agency through which the Ministry of New and Renewable Energy conducts wind and solar power auctions. It declined to confirm the results of the auction.
In the latest SECI auction, Spain’s Solarpack won 300 MW at Rs 2.36 per unit, while Italy’s Enel Green Power won 300MW at Rs 2.37 per unit. Germany’s IB Vogt won 300 MW at the same tariff. Canadian developer AMP Energy and New York based Eden Renewables won 100MW and 300MW at Rs 2.37 per unit.
CDC Group (UK’s development finance institution) backed Ayana Renewable Power won 300 MW at Rs 2.38 per unit. The only local company to win was Renew Power, which got 400 MW at Rs 2.38 per unit, though Renew too is largely backed by foreign investors. Projects can be located anywhere in India.
“Solar equipment costs have been falling very sharply in the last six months because of Covid related demand depression around the world,” said Vinay Rustagi, Managing Director of renewable energy consultancy firm Bridge To India.
Developers are also anxious to win new projects because of the slowdown in power demand and the slow pace of auctions, he said.
“Vanilla solar tenders are becoming rare as there is greater push for more complex round-the-clock and peak power schemes,” Rustagi said. SECI conducted the first-of-its-kind auction for round-the-clock power in May where the levelised winning tariff emerged at Rs 3.60 per unit. ET reported in May that the renewable energy ministry is likely to stop conducting auctions for plain vanilla solar and wind tenders.
This tender received an overwhelming response with bids for more than 5,000MW. “The sector is increasingly dominated by international capital. Barring the largest Indian corporate houses, Indian developers do not have the financing appetite to compete for these projects,” Rustagi said.
One developer felt the fall in price reflected the industry’s desperation following the Covid 19 caused slowdown. “It is disappointing to see the industry acting in desperation. The same developers used to complain about risks (of aggressive bidding and consequent low tariffs) in the media and other forums,” said an industry executive, requesting anonymity. He noted that developers bagging contracts at low prices and later failing to deliver would face severe consequences. “The minister (of New and Renewable Energy) has made it very clear he would blacklist companies which renege on contracts,” he said.
“I don’t understand the reason for this aggression,” said another solar developer, requesting anonymity.
Acme Solar, the developer which had won the contract at the then-lowest tariff of Rs 2.44 per unit in July 2018, has since informed the Central Electricity Regulatory Commission that it will not be able to execute the project. The matter is under litigation.
Petrobras Hits Production Record In Búzios Field
Brazilian oil and gas company Petrobras has reached a production record on its operated Búzios field located in the Santos Basin pre-salt offshore Brazil.
Petrobras said last Monday that platforms P74, P-75, P-76, and P-77 – installed on the Búzios field – had reached new production records.
The records of 664,000 barrels of oil per day (bpd) and 822,000 barrels of oil equivalent per day (bored) were reached on the 27th of this month.
The Búzios field was discovered in 2010 and it is the largest deepwater oil field in the world.
It started production in April 2018 through the P-74 FPSO and the rest of the units were subsequently added to the field.
For Petrobras, it is a world-class asset with substantial reserves, low risk, and low lifting cost.
Ghana: Two Staff Of BOST Test Positive For Coronavirus
Two staff of the Bulk Oil Storage and Transportation Company, Ghana, have tested positive for the novel coronavirus, energynewsafrica.com can report.
According to an internal Memo sighted by energynewsafrica.com, the two workers were confirmed positive after a spouse of the company’s IT Department tested positive, compelling management to shut down the department and subjected them to COVID-19 screening.
Ghana: 70 Staff Of Schlumberger Asked To Go Home For 1 Year Without Pay“The results of the tests were received yesterday and two of the IT staff confirmed positive. However, the two are in good condition of health and are strictly observing required protocols prescribed by the Ghana Health Service for two weeks,” the Memo said. “There is absolutely no need for any staff to panic as the situation is under control and being monitored and handled professionally,” management assured. BOST is the second institution in the West Africa nation’s oil sector where workers have tested for COVID-19. The first was about 60 workers at the country’s jubilee fields testing positive for the disease. It followed two confirmed cases of Tullow Oil’s subcontractors.
IEA’s Africa Dialogue Needs To Be Inclusive For A Workable Africa’s Energy Transition
The African Energy Chamber taken note of recent initiatives taken by the International Energy Agency (IEA) to support Africa’s energy transition and salutes the leadership of the IEA in this dialogue.
According to the Chamber, such conversations notably echo the Chamber’s recent statement on African Lives Matter, questioning the OECD and IEA’s recent call to phase out fossil fuels.
While the conversation of Africa’s energy transition continues, the Chamber reiterates its support to inclusive dialogues that take into account the realities of African economies and of energy poverty.
Unfortunately, the Africa Ministerial Roundtable organized this week has sidelined key stakeholders and actors within Africa’s energy sector, preventing its ability to be truly inclusive and impactful on the ground. Africa’s energy transition will not be possible without the inclusion, and participation of, the continent’s petroleum and gas ministries and companies.
The Chamber strongly believes that key institutions like the African Petroleum Producers Organization (APPO), led by its Secretary General Dr. Farouk Ibrahim, need to be part of this dialogue, along with representatives of the petroleum ministries of oil producing countries such as Algeria, Nigeria, Angola, Equatorial, Libya, Congo and Gabon and key National Oil Companies such as Sonatrach, GEPetrol, Gabon Oil, NNPC and Sonangol.
The African private sector was not invited while we note the invitation and participation an international oil company. Given the importance of the oil & gas sector for several African economies, the Chamber questions the relevance of an energy debate that would exclude them from the conversation.
“Energy poverty is as real as climate change, and the global debate on Africa’s energy transition tends to forget that hundreds of millions of African have no access to energy and still rely on firewood for cooking. Their needs must be at the center of the energy transition debate, which should not be made at the expense of any particular source of energy,” stated Nj Ayuk, Executive Chairman at the African Energy Chamber.
“This generation of Africans are not tickled by foreign aid and handouts that resulted in poor governance and mismanagement. Jobs, sustainable power and gas that drives development, along strong market-driven economies, are what Africans want. In order to accomplish a true African energy transition, petroleum producing countries, their National Oil Companies, civil society, African entrepreneurs and independent producing companies need to have a seat at the table,” he added.
The African Energy Chamber remains concerned that global conversations on Africa’s energy transition would result in a new foreign aid narrative by which Western stakeholders and investors would blindly push a renewable energy agenda at the expense of proper private sector-led development supporting jobs and entrepreneurship. While the Chamber strongly supports diversified energy mixes and wishes to see cleaner energy developments across Africa, solar and wind projects are still relying on global value chains, which restrain their ability to support local content development. As a result, most solar and wind projects in the continent continue to have local content participation of less than 50%. Such issues need to be at the core of the energy transition debate so Africa’s cleaner future does not serve only the interests of big multinational corporations but also translates into private sector development and opportunities in Africa. It is time to put the voices of African businesses at the center of the debate.
As Africa seeks new ways to develop and grow in a post Covid-19 world, let’s remember the words of Nelson Mandela: “Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life. While poverty persists, there is no true freedom. Do not look the other way; do not hesitate. Recognise that the world is hungry for action, not words. Act with courage and vision.”
Africa Oil Week 2020 Rescheduled To 1-5 February 2021.
The organisers of the Africa Oil Week, the continent’s leading oil and gas sector event, has rescheduled this year’s programme to February next year due to the coronavirus pandemic.
This year’s programme was to be held in Cape Town, South Africa, from November 2 to 6.
“After discussions with our partners in South Africa and key stakeholders in the oil and gas community, we have made a collective decision to reschedule Africa Oil Week 2020 to 1-5 February 2021,” the organisers said.
“This decision was taken in consideration of the continuing global impact of COVID-19, international travel restrictions and with the wellbeing of our speakers, delegates, sponsors and exhibitors top of mind. We believe that rescheduling the show to early 2021 will enable us to deliver another strong edition drawing the oil and gas community together and provide a platform for the industry to meet, reconnect and set the agenda for 2021.”
The organisers explained that “the show will be held in accordance with latest health & safety and government’s guidance and will take place alongside our sister event Investing in African Mining Indaba.
“In the meantime, we are delighted to announce the launch of AOW Virtual, which will take place 7-8 October 2020.”
This strategic event would feature free insightful content streamed online, including pioneering insights from the industry’s heavyweights, multi-stakeholder strategic conversations, an opportunity for delegates joining them at the Africa Oil Week in February 2021 to connect virtually, and more.
“We want to enable the oil and gas industry to come together and help shape the roadmap for an industry response to current challenges,” the organisers said.
Ghana: Crude Revenue Drops 5% Despite 15% Increase In Production For 2019
Although crude production in 2019 went up 15 per cent from 62,135,435.07 barrels in 2018 to 71,439,585 barrels, revenue accrued to Ghana’s Petroleum Holding Fund (PHF) however dropped by some 5 per cent within the same period.
According to Business & Financial Times (B&FT), the revenue went down to US$925million in 2019 from US$977million in 2018 from Royalties, Carried and Participating Interest (CAPI), Corporate Income Taxes (CIT), Surface Rentals, and income earned – representing a 5 per cent drop, according to the Public Interest and Accountability Committee (PIAC) 2019 annual report.
“The rebound of crude prices that had been experienced in 2018 was reversed in 2019. The average achieved price by Ghana National Petroleum Corporation (GNPC) on behalf of the Ghana Group – US$68.487/bbl in 2018 for all three producing fields – reduced to US$63.496/bbl, which was also below government’s 2019 estimated benchmark price of US$66.670/bbl.”
The drop in revenue despite the increased production was due to lower prices. While government had benchmarked crude to sell at US$66.670/bbl last year, the average achieved price by the country was US$63.496/bbl.
The report attributed the decline in revenue, to the drop in prices during the period.
“The average achieved price by GNPC on behalf of the Ghana Group for all three producing fields – Jubilee, TEN and the Sankofa Gye-Nyame (SGN) – at US$63.496/bbl was lower than both the 2018 average (US$68.487/bbl) and government’s 2019 estimated benchmark price (US$66.670/bbl),” the report added.
Production of crude oil continues to be derived from three producing fields – Jubilee, TEN and the Sankofa Gye-Nyame (SGN) Fields.
For the year 2019, a total of 71,439,585 barrels (bbls) were obtained from the three producing fields – exceeding the 2018 figure of 62,135,435.07 bbls by 15 percent. It also exceeded the benchmark crude oil output of 63.4 million bbls. The high-recorded volume is on account of increased production on the Jubilee and SGN Fields, with SGN witnessing the highest growth in volumes, followed by Jubilee.
Of the total output, the Jubilee Field produced 31,915,377 bbls compared with a 2018 volume of 28,461,755 bbls; the TEN Field 22,319,137 bbls in comparison with 23,557,361 bbls in 2018; and the SGN Field, 17,205,070.85 bbls relative to 10,751,671 bbls in 2018.
The high production was achieved despite challenges faced by the country’s largest producer, Tullow Ghana, after the firm was forced to cut down production last year.
Harmonizing West Africa’s Increased Electricity Generation With Climate Change Objectives (Article)
By: Nana Amoasi VII, IES
The United Nation’s Department of Economic and Social Affairs estimate that there will be 1.3 billion more Africans by 2050. From 2017 to 2050, it is expected that half of the world’s population growth will be concentrated in just nine countries: India, Nigeria, Democratic Republic of the Congo, Pakistan, Ethiopia, the United Republic of Tanzania, the United States of America, Uganda and Indonesia (ordered by their expected contribution to total growth). Figures from the Institute for Security Studies (ISS) shows that Africa’s population is the fastest growing in the world and will account for nearly half of global population growth over the next two decades, with West Africa alone accounting for about 15 percent of the projected growth.
Presently, West Africa’s population accounts for roughly 31 percent of Africa’s population. From today’s rough estimate of 400 million people, equivalent to 5.16 percent of total world population, it is expected to increase to almost 580 by 2035 (United Nation 2020, worldometer 2020). Growing populations according to the International Energy Agency (IEA) translates into rapid growth in energy demand for purposes of industrial production, cooling and mobility. It means that, as population grows, the demand for services such as transportation, healthcare, communication, education, housing and infrastructure will increase.
Without electricity, economic transformation through improved productivity in manufacturing and services, technological innovations, and promotion of value-addition in resource-based economies would not be possible. Insufficient supply of energy will limit socio-economic activities, restrict economic growth, negatively impact living standards, aggravate poverty and inequality, and hamper government revenues (Ahali 2015; IEA 2014). It goes to suggest that the need for electricity is critical in every economy.
Electricity Supply Challenges
IEA’s analysis of Africa Energy Outlook 2019 shows that in Africa the number of people gaining access to electricity doubled from 9 million a year between 2000 and 2013 to 20 million people between 2014 and 2018, outpacing population growth. As a result, the number of people without electricity access which peaked at 610 million in 2013, declined slowly to roughly 595 million in 2018.
However, the IEA suggests that sub-Saharan Africa’s electrification of 45 percent in 2018 is still very low compared to other parts of the world. The millions of people still without access to electricity in sub-Saharan Africa represents more than two-thirds of the global total. About half of the region’s population without electricity access can be found in Uganda, Nigeria, Democratic Republic of Congo, Tanzania, and Ethiopia. And of those without access to electric energy in sub-Saharan Africa, West Africa is reported to accounts for 30 percent, putting the average access rate across West Africa at 52 percent.
The demand for electricity in Africa today is 700 terawatt-hours (TWh), with the North African economies and South Africa accounting for over 70 percent of the total. Yet it is the other sub-Saharan Africa countries that see the fastest growth to 2040, according to the IEA. West Africa’s inhabitants of close to 400 million consumes a little over 100 terawatt-hours of electricity per year. It is estimated that by 2030, that demand will be more than 200TW-hr, a fourfold increase from where demand was in 2015.
But just like many other parts of the world, West Africa is grappling with daunting electricity supply challenges. The region’s power sector remain under-developed, requiring a huge expansion in its generation capacity and power grids. According to John Timmer a science editor with Ars Technica, large hydro facilities in West Africa produce about 20 percent of the region’s electricity at the moment. The remainder is mostly supplied by a combination of natural gas and oil-fired generating plants.
The Climate Bit
While countries across West Africa grapple with the challenges of rising electricity demand and unreliable supply of existing terawatt-hours, climate change impacts mostly caused by harmful gas from fossil fuel combustion, are posing serious impacts to human health and environment. Greenhouse gases (GHG) emitted from the burning of fossil fuels such as coal, petroleum and natural gas, are having a heavy impact on the region’s water resources, weather patterns, human health, food security et cetera, as evident in many African countries and the world as a whole world (Magadza CHD 2000, Droogers 2004).
To deal with the challenges of climate change, a regional revolution is required to complement global efforts. The goal is to combat man-made climate change and its impacts, hence the adoption of the Paris Agreement by countries to work to reduce their GHG emissions and to transparently report those results.
The Paris Agreement aims to strengthen the global response to the threat of climate change by keeping global temperature rise this century well below 2 degree Celsius (2°C) above pre-industrial levels, and to pursue efforts to limit the temperature increase even further to 1.5°C. The Paris Agreement on climate change, along with the 2030 agenda, including the sustainable development goals (SDGs), forms the most comprehensive blueprint to date for eliminating extreme poverty, reducing inequality, and protecting the planet, according to the United Nation (UN).
Renewable energy resources are expected to play a leading role in meeting such global climate and sustainability imperatives. However, IEA’s analysis for 2019 Africa Energy Outlook (2020) suggest that to date, the continent with the richest solar resources in the world has installed only 5 gigawatts (GW) of solar photovoltaics (PV), less than 1 percent of the global total. Africa’s vast renewables resources and falling technology costs is expected to drive double-digit growth in deployment of utility-scale and distributed solar PV, and other renewables, across the continent.
Aside increased global consumption, a 2019 data recently released by the International Renewable Energy Agency (IRENA) shows that newly installed renewable power capacity increasingly costs less than the cheapest power generation options based on fossil fuels. Additionally, existing hydro dams have been found to be able to act as virtual batteries for solar PV and wind electricity storage to deal with their unpredictable and variable nature, lessening the role of other storage technologies (Barasa, Bogdanov, Oyewu, and Breyer 2018). These recent feats renders renewables as the most preferable choice of fuels for power generation in a region where demand is growing.
Solar-wind-water Strategy
A new study has mapped the potential for solar-wind-water strategies for West Africa. The study, Smart Renewable Electricity Portfolio in West Africa, published in the scientific journal Nature Sustainability explores how hydropower plants can support solar and wind powers unpredictable and intermittent nature in a climate friendly manner. The lead author of the study Sebastian Sterl, energy and climate scientist at Vrije Universiteit Brussel and KU Leuven, proposes that countries in West Africa are represented with the opportunity to plan their electricity generation expansion in line with strategies that rely on modern, climate-friendly energy generation. According to Sterl, countries in Europe lack such an opportunity, with power supply in this region largely dependent on polluting power plants for many decades; a situation many countries now want to rid themselves of.
The study published by Sterl and Brecha (2020), demonstrates that it will be particularly important to create a “West African Power Pool,” a regional interconnection of national power grids. By that, each West African country could contribute to a shared West African Power Pool for electricity supply, based on its own nationally available resources. The study found that West African countries do already collaborate on electricity exchanges, but mostly through bilateral contracts, while plans are underway to integrate the national power systems into a unified electricity market on a larger scale.
The research suggests that cross-border electricity trade could make better use of hydropower, coupled with solar and wind. It identified countries with a tropical climate, such as Ghana and the Ivory Coast, which typically have a lot of potential for hydropower and quite high solar radiation, but hardly any wind. Drier and more desert-like countries, such as Senegal and Niger, though hardly have any opportunities for hydropower, receives more sunlight and more wind. The researchers found that the potential for reliable, clean power generation based on solar and wind power, supported by flexibly dispatched hydropower, increases by more than 30 percent when countries can share their potential regionally.
The research concludes that all measures taken together would allow close to 60 percent of the current electricity demand in West Africa to be met with complementary renewable sources, of which roughly half would be solar and wind power and the other half hydropower, without the need for large-scale battery or other storage plants. The work shows how these efforts could be streamlined with the growth of renewable electricity sources. Similar efforts according to the research are underway in other parts of the world, such as the European Union, where cross-border cooperation is also expected to become more important to scale up renewable electricity generation.
The study also finds that within a few years, the cost of solar and wind power generation in West Africa is also expected to drop to such an extent that the proposed solar-wind-water strategy will provide cheaper electricity than gas-fired power plants, which currently still account for more than half of all electricity supply in West Africa.
The adoption of the solar-wind-water strategy therefore presents itself as a bonanza, a great opportunity to harmonize West Africa’s increased electricity generation with climate change objectives.
Written by Paa Kwasi Anamua Sakyi (aka Nana Amoasi VII), Institute for Energy Security (IES) ©2019
Email: [email protected]
The writer has over 23 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media and CNBC Africa
Ghana: Enclave Power Company Replies Steel, Cement Manufacturers
Enclave Power Company, a power distribution company in the Republic of Ghana, West Africa, has explained why it gave only 22 percent rebate to its customers instead of the 50 percent electricity tariff reduction announced by President Akufo-Addo for businesses.
During his 6th address to the nation on the COVID-19 pandemic, the President of Ghana, Nana Akufo-Addo announced a relief on electricity to support individuals and businesses with full cover for bills of low-income consumers and 50 percent for consumers who fall outside that category.
However, cement manufacturing companies and steel companies located within the Tema Free Zones enclave claimed they have been denied such support from the government, thus, seriously affecting their business.
Addressing a press conference, Rev. Dr George Dawson-Amoah, Executive Secretary of the Chamber of Cement Manufacturers, Ghana, and who doubles as the Chairman of the Association of Ghana Industries Tema, described the situation and attitude of the energy supplier (Enclave Power Company) as unfortunate, and called on the government to, as a matter of urgency, intervene to salvage the situation.
“This is absolutely an unfair trade practice, and it does not augur well for fair competition considering the fact that other cement players and steel companies outside the enclave are enjoying the 50 percent rebate under ECG. We have written to EPC to rectify the anomaly but till now, no practical resolution has been given to the affected parties.”
But reacting to the claims by the Cement Manufacturers and Steel Companies, Managing Director of Enclave Power Company (EPC), Norbert Anku told energynewsafrica.com that following the announcement by the President, they had discussions with the Volta River Authority and GRIDCo to see the way forward.
He continued that VRA agreed to wave 50 percent of the generation charges, but GRIDCo insisted on 100 percent distribution charges.
Mr Anku said he wrote to the Ministry of Energy and Public Utilities Regulatory Commission (PURC) of the decisions by both VRA and GRIDCo, but they failed to act and rather directed them to the Ministry of Finance.
He said, “When we realised that the Ministry was not giving us hope of the government paying for our customers as it did for customers of ECG and NEDCo, we wrote to our customers to inform them of the situation.”
Interestingly, Mr Anku said none of them raised concern, neither did Dr Dawson-Amoah write to EPC on their behalf.
Mr Anku, consequently, expressed shock at the conduct of Dr Dawson-Amoah.
“I was surprised when I heard what Dr Dawson-Amoah said. His action doesn’t augur well at all,” Mr Anku explained.
Saudi Arabia Discusses Progress Of OPEC+ Deal With Nigeria
Saudi Arabia’s Crown Prince Mohammed and the president of Nigeria Muhammadu Buhari have reportedly discussed the progress of the OPEC+ oil production cut deal in a telephone conversation.
Nigeria, along with Iraq, has been lagging in compliance with the production quotas set by OPEC+ in April, aiming to shave off some 9.7 million bpd in oil supply until the end of July.
In fact, Iraq and Nigeria—especially Nigeria—were so bad at compliance that Saudi Arabia’s Energy Minister had to put his foot down at the last OPEC+ meeting and demand from them that they start cutting production more deeply to improve their compliance rates.
ExxonMobil Hints Of Major Job CutsIraq and Nigeria’s non-compliance with the record OPEC+ cuts in May nearly wrecked the June meeting of the pact, ahead of which the two leaders of the group, Saudi Arabia and Russia, had insisted that there would be an extension by one month to the current level of cuts only if laggards in compliance ensured over-compliance going forward to compensate for flouting their quotas so far. Iraq and Nigeria had little choice but to cave, and undertook to deepen their production cuts not just in July but also in August and September, to compensate for their under compliance in May when the deep cuts began. For now, the agreement is to cut a total of 9.7 million bpd until the end of July. According to Russia’s Energy Minister, a further extension of the deep cuts would not be needed as the market would have begun to rebalance by the end of July. Yet another extension remains a possibility: the latest production data on OPEC, from Petro-Logistics, overall OPEC output was down by 1.25 million bpd in June from May but was still above the amount it was supposed to be producing per its agreement with Russia and the other non-OPEC states in OPEC+ Source:Oilprice.com


