INDUSTRY & EVENT NEWS

Financing, digital revolution top of mind ahead of POWER-GEN & DistribuTECH Africa

New power sector priorities are emerging across Africa, including financing of major power projects, joining the dots between generation and the 650 million ‘power poor’, and becoming agile in a digital world, report the experts convening ahead of POWER-GEN & DistribuTECH Africa conference and expo.

Pan-African and international power sector experts who met in Johannesburg last week to assess papers for the upcoming POWER-GEN & DistribuTECH Africa 2018 report that key power challenges and priorities have changed across Africa in recent years.

The POWER-GEN & DistribuTECH Africa advisory board, which meets annually to review papers to be presented at the conference, says there has been a clear change in focus in recent years. Where as recently as five years ago, the continent’s primary focus was on generation, there is growing urgency among players to address issues such as developing continent-wide, integrated strategies to deliver power to the estimated 650 million who still have no access to power.

Utilities’ balance sheets and business models are also in the spotlight; as is the impact of digital technologies on the sector as a whole.

Focus on finance

Dr. Willie de Beer, chairperson of the POWER-GEN & DistribuTECH Africa advisory board, says: “There is a significant acknowledgement of the disruptive landscape that we are operating in. Things we would have thought a year or two ago could never happen to this industry are now happening. While in the past, we focused very heavily on generation and energy mix; now we are confronted from a broader industry perspective with things like leadership challenges, and how well we operate and run our utilities.”

“We see increased awareness that we have to take immediate action to bring stability to the sector, before we can look at growth. We have to stabilise the credit ratings and balance sheets, build investor confidence, and find ways to capitalise on the environment to remain relevant into the future,” he said. “Without a focus on finance, we will go nowhere. There has to be a balance between the technologies and the finances.”

Nhlanhla Lucky Ngidi, advisory board member and South African Local Government Association official, says key new challenges emerging in Africa’s power sector include strategic issues: “We have seen that the kW/h business is no longer working, so there is growing recognition that we need to move towards more innovative ways to do business. We need to address the value chain and the structure of the industry on one hand, while also staying abreast of technological advancements. In addition, regulation has to become proactive, agile and flexible to stay on top of change.”. The power balance in Africa is also shifting, says Khanyiso Myataza, advisory board member and Business Development Manager - SADC Region, Power and Oil and Gas at Black & Veatch. “We’re seeing increased focus on reducing the reliance on South Africa as the major power producer and giving each region more power independence,” he says.

Glenn Ensor, Director of Events for PennWell's International Power Group, says the conference organisers have taken note of the growing focus on financing: “There will be some changes in emphasis at POWER-GEN & DistribuTECH Africa 2018, in line with what’s happening in the market. One new development will be to get financiers much more involved than we have in the past, because there are a lot of potential projects in Africa – it’s very exciting, but they’re all seeking finance to be realised. We see it as part of our role to put those project developers and financiers together. We will also develop high-level view content specifically aimed at financiers.”

Digital disruption

Nigel Blackaby, Director of Conferences, PennWell International Power Group, says a top of mind challenge emerging in 2018 is that of digitalization: “We all know that the industry is going to change in terms of much more data being used, and customers becoming much more involved in the industry, but the sector is asking – ‘how is that going to manifest itself?”. Moefi Moroeng, advisory board member and Specialist: Electricity wholesale trading at NERSA, reports that key emerging trends include digitalization, data management, and the software issues the sector needs to address. “In addition, we need to focus on developing rules and processes to manage the grid in the changing environment.”

Integration issues

Blackaby adds: “At the advisory board meeting this week, we’ve seen clear trends towards the further development of renewable energy across Africa. Although this has been discussed over the past few years, the discussion now is moving on in terms of how can renewables be integrated with the conventional power sector, and how can renewable energy be used for the greater social and economic good?”. Shirley Chauke, CEO at Hamon SA, notes that there are pools of excess generation while much of the continent is still dark. “The two just don’t add up. There is a disconnect, and we need to connect the dots.”

Sindiswa (Sindi) Mzamo, Chief Operating Officer and Head of Marketing of the Edison Power Group, says: “The advisory board is now saying ‘let us look at our electricity strategy across the continent. How do we make sure that we share best practices amongst each other and make sure there is an implementation strategy to serve those 650 million who still have no access to power?’ Even when we talk renewables, we are looking at what role they play in an integrated electricity strategy.”

Dr Jens Reich, advisory board member and Head of Sales of the Energy Technology Department of STEAG Energy Services GmbH, says the advisory board discussions highlighted issues such as integrating renewables across the continent, through to being more flexible with regard to operation and fuels; to digitalization, storage and batteries. Gareth Gregory, Africa Head, Strategic Energy and Client Delivery in the commercial division, Energy Security Services Africa (ESSA) sums up the key issues emerging now: “One of the most critical challenges emerging in Africa deals with the speed at which change is happening; and the speed at which the process of implementation is taking effect. It’s a question from a regulation standpoint, policy, and a commercial aspect as well, as to how we deal with these specific changes across the continent in a meaningful way.”

These priority areas will be addressed by pan African and international speakers at the upcoming POWER-GEN & DistribuTECH Africa 2018.

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