Page 9 - AfrElec Week 07

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to pay off the interest on this debt without government aid.
SUPPLY
Shell, NNPC highlight Nigeria’s electricity deficit
Shell and Nigerian National Petroleum Corporation (NNPC) have lamented the poor electricity supply in Nigeria. despite the abundant energy resources the country has. They warned that the huge liquidity crisis in the power sector was hampering investments in gas development.
NNPC group managing director Mele Kyari and Shell Petroleum Development managing director Osagie Okunbor raised their concerns at the Nigeria International Petroleum Summit in Abuja.
Lamenting that most businesses in the country rely on generators for electricity, Kyari said that at this age or time when there is a transition globally from use of fossil fuels (such as petrol and diesel) to renewable energy, solving the issue of electricity supply was crucial.
“For this country and very many of us in sub-Saharan Africa, what we worry about today is actually the meals of today. There are many who can’t afford a meal a day. And of course, electricity is largely a luxury; it’s only for the elite like all of us here.
“It is the dream of very many to have
I-pass-my-neighbour in their homes. When you say, ‘Do not use fossil fuel,’ you are
saying that ‘park this.’ You have not provided alternatives. The world has not looked at their situation. The world has not recognised that there is abject poverty in the communities,” Kyari said.
According to Okunbor, oil and gas production, which reportedly accounted
for 90% of the country’s export revenues, only contributed 10% of the Gross Domestic Product.
“What that essentially says is that the multiplier effect of having these important resources simply doesn’t exist. I was staggered to see a sheer number of people in this country across all geopolitical zones who rely on firewood as a primary source of energy.”
MIINING
South Africa’s power crisis puts mining sector at risk
South Africa’s dire power situation is putting pressure on commercial and industrial players that rely heavily on stable supply.
According to Ted Blom, independent power and mining expert and commentator and a partner at Energy & Mining Advisors: “More than 30 percent of South African mining projects will be terminated prematurely due to additional power costs if suitable solutions are not found within the
next 12 months.”
His comments follow Mineral Resource
and Energy Minister Gwede Mantashe’s announcement last week at Mining Indaba that the government had conceded that it must allow mining companies to produce energy for their own use.
ed Blom adds: “Most mining projects
in Africa provide their own power for operations, but that just increases the hurdle rate for committed capital to develop and run the project. The big difference is that provision of own power is already factored into those projects whilst South African projects have NEVER factored in the costs of providing own power.”
“The whole South African mining and beneficiation sector was built on the back of cheap and abundant electricity availability. The current environment has changed drastically and most businesses (including miners and smelters) have NOT seen this coming. Only in the past two years has business started waking up to the new reality, but NONE have reviewed their business models to incorporate the new electricity reality.”
A recent report by the Council for Scientific and Industrial Research (CSIR)’s Energy Centre, analysing South Africa’s load- shedding, indicated that it cost the country’s economy between ZAR60bn ($4bn) and ZAR120bn ($8bn) in 2019 alone.
The total economic impact of load- shedding in South Africa could be as high as ZAR338bn ($22.6bn) over the past 10 years, according to the report titled Setting
Week 07 20•February•2020
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