Africa in the Global Energy Framework


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There is currently a large deficit of electricity supply in Sub-Saharan Africa, however the continent is planning significant investment into the energy sector due to increasing demand.

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Africa in the Global Energy Framework

  1. 1. Africa in the Global Energy Framework<br />March 2011<br />Ross Bruton, Research Analyst<br />Energy and Power Systems<br />Africa<br />
  2. 2. Discussion Guideline<br />Forecast Timeline for the Global Energy Market<br />Global Investment Profile into Key Base Infrastructure<br />African Electricity Generation and Consumption<br />The African Energy Mix<br />African Electricity Demand and Supply Analysis per Region<br />The Asian Influence in the African Market<br />Key Market Challenges and Drivers Influencing the African Electricity Market<br />Key Messages<br />
  3. 3. Forecast Timeline for the Global Energy Market, 2010 - 2030<br />Key Challenges<br />2020<br />2025<br />2030<br />2010<br />2015<br />Fuel Supply and Cost<br />Demand for Liquid Fuel falling after 2015<br />Energy from Waste in Emerging Markets<br />Coal Reaches almost 45% of Energy Consumption, following Growth in India and China<br />Resurgence of Nuclear<br />Continued Acceleration of Coal Fired Power<br />Growth of Natural Gas Kept in Check by High Gas Prices<br />Acceleration of Natural Gas<br />World Energy Demand<br />World Energy Demand Almost Double 2000 Levels<br />Growth Dominated by India and China<br />Long Running Boom in Russia<br />Developing Countries Pass 40% of Electricity Demand<br />Electricity Generation Passes 30 trillion kWh<br />Growth Resurgence in All Regions<br />China Overtakes the US as the Worlds Biggest Emitter of CO2<br />Environmental Issues<br />Accelerated Investment in Carbon Capture and Storage<br />World CO2 Emissions Reach 40 Gt<br />20% Renewable Energy in Europe<br />Significant Growth in Renewables<br />Source: Frost & Sullivan<br />
  4. 4. Level of Investment Into Key Infrastructure, 2005 – 2030 (Billion USD)Power infrastructure represents the key area of investment for Africa<br />Total Forecast Investment, USD<br />$22,160bn<br />$9,000bn<br />$7,800bn<br />$1,590bn<br />Europe<br />Water<br />Power<br />Road and Rail<br />Air/Sea Ports<br />North America<br />Middle East<br />Asia/Oceania<br />South America<br />Africa<br />Even after this investment, demand will still outstrip supply - there is room for ongoing investment on the same scale over the period to 2050<br />
  5. 5. Africa Generation and Consumption of ElectricityAfrica accounts for 3.1% of global generation and 2.9% of consumption<br />Net Electricity Generation in Africa by fuel, 2009 <br />(Percentage)<br /><ul><li>Africa generates approximately 3.1% of total world electricity generation and consumes 2.9% of total consumption
  6. 6. Growth of electricity generation on the continent is expected to remain largely dependent on fossil fuels
  7. 7. However, renewable energy programs are being developed in both Sub-Saharan Africa and the North African Region </li></ul>Net electricity generation in Africa by fuel, 2007-2035, <br />(TWh)<br />Net Electricity Consumption in Africa by fuel, 2009 <br />(Percentage)<br />Source: EIA<br />
  8. 8. African Energy MixTotal Generation Capacity in Africa Amounted to Approximately 161300MW in 2010<br />Feedstock Distribution (Africa), 2010<br /><ul><li>Southern Africa utilizes coal as its primary feedstock in electricity production
  9. 9. Hydro power is the primary resource available for electricity production in Central and East Africa, with diesel and geothermal resources also utilized in the East
  10. 10. Due to the significant abundance of hydrocarbon deposits in West Africa, the major resource for energy production in these regions is natural gas and liquid fuels, primarily diesel
  11. 11. This is also the case for North Africa, however natural gas represents the region primary feedstock for electricity generation</li></ul>Coal<br />Percentage Share of Generation Type, 2010<br />Gas<br />Hydro<br />Diesel<br />Oil<br />Nuclear<br />Geothermal<br />Source: Frost & Sullivan<br />Source: EIA<br />
  12. 12. African Electricity Demand and Supply AnalysisIncreases in investment in energy and power is expected to increase supply security in Southern Africa<br />Growth in Installed Capacity 2010 - 2014<br /><ul><li>Growth in installed capacity is expected at an average CAGR of 7.89% for 2010 to 2014
  13. 13. Most significant growth expected in North Africa
  14. 14. Forecast CAGR of 9.16%
  15. 15. Market expected to be stunted in the near term due to instability in the region
  16. 16. Reserve margins below take into account nominal generation capacities without consideration for lower plant efficiencies
  17. 17. When this is considered, a significant demand/supply gap is apparent for the continent</li></ul>Source: Frost & Sullivan<br />Supply and Demand per Region, 2010<br />(% Indicates Reserve Margin)<br />Forecast Supply and Demand per Region, 2014 <br />(% Indicates Reserve Margin)<br />Source: Frost & Sullivan<br />Source: Frost & Sullivan<br />
  18. 18. The Asian InfluenceThe total value of committed Asian investment in Sub-Saharan African was $4.9 billion in 2008<br />Investment by Asian Countries in the Sub-Sahara African Electricity Sector, 2008<br />Over $800 million<br />Over $500 million<br />Over $200 million<br />Over $40 millionUnder $40 million<br />Source: Frost & Sullivan<br />Source: Frost & Sullivan<br />In 2008, China Exim Bank was the leading Asian project financer accounting for 90.3% of committed investment in the year <br />
  19. 19. Key Challenges Facing the Energy Market <br />Key Market Challenges and Drivers to the Energy Market in Africa, 2011<br />Challenges Faced<br />Political Instability<br />Funding Constraints<br />Decentralisation of National Power Markets<br />Shortage of Supply <br />Increased Investment from the East<br />Interconnection of Power Pools<br />Abundant Supply of Renewable Resources<br />Interconnection of Power Pools<br />Market Drivers<br />Source: Frost & Sullivan<br />
  20. 20. Key Messages<br /><ul><li>There is currently a large deficit of electricity supply in Sub-Saharan Africa
  21. 21. Africa is planning significant investment into the energy sector due to increasing demand
  22. 22. The development of regional power pools and trading mechanisms represents a greater security of supply to many regions
  23. 23. Emission reduction is not a key concern for the majority of African countries, however, this may be dictated through loan conditions set by international monetary funds
  24. 24. New investment into the sector from China represents a significant opportunity for market development
  25. 25. Where from here?</li>