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Small-scale distribution may be key to alleviating Africa’s energy crisis

19th April 2013

By: Samantha Herbst

Creamer Media Deputy Editor

  

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Added focus on small-scale power dis- tribution could be key in mitigating the disparity between Africa’s abun- dant energy reserves and inherent poverty, says strategic and commercial services firm Dynamic Energy Consultants director Darryl Hunt.

He emphasised the challenge of meeting Africa’s significant energy requirements at Gas Week 2013, which took place at The Hyatt Regency, Rosebank, from April 8 to 12, highlighting the possibility of using small to medium-sized gasfields or stranded gas assets, which are prevalent worldwide, to distribute energy in Africa on a decentralised basis. This will eliminate the need to build the required but expensive infrastructure for larger utility-scale energy terminals.

Hunt pointed out that, while Africa is blessed with a wealth of energy reserves, including 7% of the world’s conventional gas reserves, 8% of its oil reserves and 4% of its coal reserves, it does not enjoy the same access to electricity as the rest of the world.

Africa comprises 14% of the world’s population, but consumes only 3% of global electricity – a depiction of energy poverty that translates into absolute poverty on the African continent, he says.

African leaders have, however, recognised the problem and, as a result, established the Programme for Infrastructure Development in Africa (Pida) in 2010, under the auspices of the New Partnership for Africa’s Development (Nepad), the African Union and the African Development Bank.

The programme is aimed at promoting socioeconomic development and poverty reduction in Africa through improved access to integrated regional and continental infrastructure networks and services.

As a result of Pida, Africa’s heads of State endorsed 15 priority cross-border energy projects, worth a combined $40.5-billion, to be implemented between 2012 and 2020.

These projects include four power-transmission corridors, nine hydroelectric projects, one petroleum products pipeline and one gas pipeline.

“With this in mind, it’s clear that there’s a strong focus on getting energy infrastructure going in Africa, with a priority on energy access, energy security and regional integration,” says Hunt.

“However, these are all utility-scale projects, which will require State and/or public–private partnerships and complex contractual frameworks.”

Hunt adds that, overall, these infrastructure projects will face significant funding challenges and suspects that there will be limitations in terms of the funding capability of a country versus the funding requirements of the infrastructure.

“There isn’t an infinite amount of money that can be spent on these infrastructure aspirations. It’s a constrained opportunity,” he argues.

“Power demand also seems to be concentrated away from the energy resources. Pida is, therefore, trying to marry the energy resource with the market and place infrastructure in the middle. This model, however, will only perpetuate the problem of economic disparity and energy poverty on the continent,” he avers.

Hunt believes the answer partly lies in distributed power generation.

“Small-scale energy distribution does not require high-voltage transmission lines. Further, the power gets generated at the source of demand or only requires access to the distribution wires.”

He argues that a distributed network can also be expanded on a modular basis when required and that it does not require the extensive lead times of utility-scale projects.

“Distributed power generation is also bankable. The private sector will participate in it because the competition risk is small and the technology is proved.”

Hunt adds that, while not new, distributed gas technology is growing and is “certainly emerging on a global scale”.

“Small-scale liquefied natural gas (LNG) distribution is prevalent in China and is increasing in the US and Europe, not only for automotive components but also for other applications,” he adds.

Small-scale energy distribution typically relates to stranded gas reserves of less than five trillion cubic feet, including conventional and unconventional gas reserves, biogas and landfill gas, assuming a decentralised demand for gas.

Small-scale distribution technology can result in yearly LNG production of between 100 000 t and one-million tons for export and local markets.

Transport of this LNG includes local LNG carriers for coastal shipping, LNG barges for rivers, rail tank cars and LNG trucks.

Once produced and transported, the LNG is received by a satellite LNG module with unloading and storage capability – enough to fuel a 200 MW gas engine.

Hunt believes that these types of modular, decentralised power-supply options are easier to implement than “lumpy, centralised and capital-intensive” infrastructure and that Africa’s energy industry needs to understand the role that stranded gas can play in the sector.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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