Top Ten African Power Markets - Outlook to 2020

22 Apr 2010 • by Natalie Aster

GBI Research, the leading business intelligence provider’s latest report “Top Ten African Power Market - Outlook to 2020” gives an in-depth analysis of the top ten African power markets, which include South Africa, Algeria, Egypt, Tunisia, Libya, Morocco, Ghana, Ethiopia, Nigeria and Mozambique. The research analyzes the import and export data, regulatory framework and infrastructure of the power sector in the top 10 countries. It provides a detailed forecast of the installed capacity by thermal, hydro, renewable and nuclear sources in each of the top 10 countries up to 2020. The report, coupled with elaborate information on active and upcoming power plants in the countries, provides a comprehensive understanding of the top ten African Power Markets.

This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.

Changing Dynamics of the Power Sector in Africa

Africa has huge untapped reserves of fossil and hydro resources that can be used for generating electricity. However, the electrification and consumption levels are low, particularly in the rural areas as the continent is unable to utilize its reserves due to drought, high oil prices, conflicts and lack of funds. The existing transmission and distribution networks are incapable of supporting the total power supply to the entire region and often result in high losses. There is an urgent need to overhaul the complete system, apart from the addition of new lines to bring in more population under the electrified bracket.

To improve the power scenario, countries have introduced reforms such as restructuring of power utilities, privatizing the vertically integrated monopolies, legalizing the entry of foreign players and FDI in the power sector and allowing Independent Power Producers (IPPs) into the country.

In order to derive synergies in the power sector, African countries have formed power pools. Major power pools include the South African Power Pool (SAPP), the Eastern African Power Pool (EAPP) and the North African Power Pool (NAPP). SAPP is the largest of the power pools with an installed 1,747 MW capacity in the Southern African region in 2008. The main aim of these pools is to stabilize and improve power supply to all the countries in the region.

Installed Capacity Dominated By Thermal Sources in Africa

Africa depends mainly on thermal sources for power. Around 78.2% of the total installed capacity in 2008 was thermal. This is attributed to the rich reserves of coal, oil and gas that the continent possesses. Hydro power, which contributed around 19.6% of the total installed capacity in 2008, is expected to increase its contribution in the future, as countries such as Ethiopia have now begun utilizing their hydro reserves to augment capacity. Installed capacity from nuclear power plants contributed 1.5% and renewable power sources contributed a mere 0.5% to the total installed capacity of Africa in 2008.

Gradual Increase in Private Public Partnership in Africa

The Private Public Partnership (PPP) in Africa is expected to increase going forward as private players gradually show more interest in Africa. At present, there are plans to increase the installed capacity in Africa by around 3,250 MW through public-private partnerships. A 1,600 MW plant is being developed by IPSA, the UK based utility company, in South Africa. Artumas Group, a Canadian based company, is setting up a 300 MW gas plant in Tanzania, while AES-SONEL is setting up a 250 MW plant in Cameroon.

Cumulative Installed Capacity In South Africa- The Top Power Market In Africa - To Reach 67,000 Mw In 2020

The cumulative installed capacity for power in South Africa was 43,731.8 MW in 2008. Thermal fuel sources – coal, oil and gas – were the highest contributors with a combined share of 91% or 39,782 MW of total installed capacity. Hydro power came a distant second, with a share of 4.7% or 2,048 MW of total installed capacity. Nuclear power and renewable energy sources (the latter including solar, wind and biomass) contributed 4.1% and 0.2% respectively.

During the forecast period 2009-2020, cumulative installed capacity is expected to grow at a CAGR of 3.5%, reaching a total of 67,483.9 MW in 2020. Thermal fuel sources will remain the highest contributors and are forecast to contribute 61,726 MW to the cumulative installed capacity in 2020. Their relative share is expected to moderately increase to 91.5% in 2020 due to a number of coal-fired plants under construction by Eskom Holdings Limited.

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