Closing Africa’s power deficit
Power
DIESEL GENSETS
Closing Africa’s
power deficit
Financial Times recently: ‘Education,
health, everything – it all depends
on a stable energy supply.’
Despite the central role of
power, public investment in the
sector is just $8bn/y or 0.5% of
sub-Saharan Africa’s combined
GDP. Although management
consultant PWC expects
expenditure in sub-Sahara’s power
sector to rise around 10%/y, this
will be too little to meet the target
of universal access to electricity by
2030.
A quick fix solution
However, a do-it-yourself
guarantee of power can be provided
by portable, scalable generators, or
‘gensets’, which produce electricity
from oil, petrol, diesel, biofuels and
gas. According to Marshall, gensets
are an ideal solution ‘when there
are relatively high electricity costs,
poor distribution and transmission
networks’. Gensets ranging from
5 MW to 160 MW can be
aggregated or scaled up to provide
temporary power plants for
emergency power, a reliable
back-up or a cost effective primary
power source. In essence, gensets
are a quick-fix temporary solution
for utilities needing to supplement
the grid, meet seasonal peak
demand, and provide temporary
power during scheduled
maintenance or outages, or power
As the current demand for electricity in much of Africa far
for remote areas unconnected to
outstrips supply, a large market for diesel generators (gensets)
the grid. They can be combined in
exists. Continuing economic and population growth will increase different ways to provide tailored
voltage and power according to
demand for this form of power generation, writes Nic Newman.
requirements and are commonly
used by the oil and gas industry,
food and beverages sector, mining
operations, shopping centres,
uch of Africa has a severe not grid-connected, two-thirds live
businesses and households
power deficit, with the
in remote rural areas with low
continent’s 48 subpopulation densities, which make it throughout Africa.
Gensets are distinguished by
Saharan countries only generating
uneconomic to build a local
roughly the same amount of power electricity grid network. In contrast, their style of operation into three
types – continuous, prime or
as Spain. Such a low level of
the picture could not be more
stand-by.
domestic power generation in the
different for Africa’s other leading
Continuous and prime power
region partly explains the small
economy – South Africa, which
fraction of the population with
generates around 40,000 MW for its generators are designed to operate
continuously and for extended
access to electricity. For instance, in 50mn inhabitants, according to
periods and are, therefore, suitable
East Africa, only 23% of Kenyans,
International Energy Agency (IEA)
as a main source of power. A prime
15% of Tanzanians and 20% of
figures.
example is the Tronox furnace gas
Ugandans have access to electricity,
Estimates as to how much it
according to World Bank estimates. would cost to electrify sub-Saharan CHP (combined heat and power)
plant in Namakwa Sands, which
Nigeria too, suffers from power
Africa vary, with McKinsey
consists of eight GE JMS620GS-SL
shortages, despite being one of the
forecasting $490bn for new
Jenbacher gas engines and is the
leading economies of Africa. It
generating capacity and another
second largest gas-fuelled power
produces less than 4,000 MW of
$345bn for transmission and
plant in South Africa.
electricity for its 180mn
distribution, or $55bn/y to ensure
Meanwhile, examples of
inhabitants. Alex Marshall, Group
universal access to electricity by
temporary power plants can be
Marketing & Compliance Manager, 2030, according to the Africa
found across Africa, including the
Clarke Energy, attributes the power Progress Report 2015. Whilst such
107.5 MW gas-fired power station
shortages to ‘very unreliable grids,
sums are huge, the cost of not
A J920 FleXtra-based
at Gigawatt Park, Mozambique,
disproportionately high costs and
investing for reliable power is
multiple gas engine power
fuelled by natural gas from the
lack of widespread access to
incalculable for, as Irene Muloni,
plant
Temane fields; the 100 MW of
renewable power’. Of those people
Energy Minister, Uganda, told the
Source: GE
M
22 Petroleum Review | July 2017
Power
emergency power provided by two
50 MW diesel power plants in
Tanzania; or the 140 MW
emergency power and temperature
control facility provided by
Aggreko to the Kenya Electricity
Generating Company.
The main difference between
continuous power generator sets
and prime generators is that the
former is designed to operate
continually with a consistent load,
whilst prime generators are
designed to operate for long
durations at variable load.
Stand-by gensets supply power
when the mains fail, or provide
power off-grid and are generally
marketed to households. Typical
products for this market is the
Honda EU 2000i or the powerful
Ryobi 2,300 Watt petrol generator.
Gensets vary in power output as
well as price – starting from as
little as R1,000 (£52) for a small
basic home generator which, with
around 10 litres of fuel, can power
household appliances for a few
hours, through to the 161 kg Kippur
8,500 Watt petrol generator costing
around R26,000 (£1,477).
Market opportunities
The market for diesel powered
gensets in East Africa alone is
estimated to be worth over $1bn
from market leaders Kenya
($168.5mn), Uganda ($654mn) and
Tanzania ($220mn), according to
the Xiamen Biao Power Technology
Company. Meanwhile, in West
Africa, Nigeria’s diesel generator
market is set to reach $694mn by
2022.
Mining operations are a major
and lucrative market for gensets.
For example, Aggreko – a major
supplier of gensets in Africa – was
reported by CNBC in 2015 to earn
$40mn/y from providing 150 MW
capacity gensets to mines spread
over 10 African countries.
It can be cheaper for large users
of power like mines, smelters and
breweries to choose onsite power
from gensets rather than direct
from the grid. Marshall observes:
‘Self-generation of power is hugely
popular for industrial facilities
across Africa, especially since
genset-based captive power plants
provide business operators with
control and understanding about
their own power supplies.’
Even the power sector has
succumbed to the reliability of
gensets. For example, independent
power operator Kenya’s Tsavo
Power Company is selling surplus
power derived from gensets to the
grid operator Kengen, whilst local
governments such as Cape Town
employ gensets to reduce their
reliance on state utility Eskom. In
efforts to reduce fuel consumption
and greenhouse gases, companies
like Cummins Africa Power
Solutions are offering more
efficient and environmentally
friendly products such as the diesel
QSK95 gensets series which can be
converted to run on gas.
Product developments
A significant step forward or
market extension for diesel or gas
gensets is the hybrid power plant in
which gensets work with
renewables and energy storage to
provide consistent reliable power. A
case in point is Cronimet’s chrome
mine in South Africa’s Limpopo
Province, which employs a hybrid
1.8 GWh solar/diesel genset plant
and displaces 450,000 litres of
diesel annually, according to
Cronimet Mining Power Solutions.
Likewise, there is a rise in direct
sales of engines operating on
renewable gases – ie biogas, landfill
gas, sewage gas and syngas. For
example, Clarke Energy recently
installed Tropical Power’s biogas
plant at George Farm in Kenya to
produce 2.6 MW from agricultural
waste.
Meanwhile, the discovery and
development of new gas fields in
Uganda, Kenya, Tanzania, Ethiopia
and Mozambique are likely to spur
an increase in the use of gensets
fed by cheaper natural gas rather
than expensive diesel. In addition,
countries like South Africa, which is
moving ahead with plans to import
LNG, should stimulate the use of
gas gensets.
Diversification in feedstocks is
the key to market expansion.
Increasingly, industrial users are
buying tri-generation units which
generate both heat and power in
which waste heat is used to
generate steam in a drier. Equally, if
not more useful, these units can be
converted to cooling, through an
absorption chiller – a valuable
driver for air conditioning or
refrigeration systems. A good
example is provided by Diageo’s
Guinness Ogba brewery in Lagos,
Nigeria, which has ordered a third
J620 tri-generation unit to expand
the site’s total capacity to 9.3 MW.
Gensets face competition from
increasing investment in wind and
solar power, most notably in South
Africa, and the adoption of
gas-to-power stations. As Marshall
notes: ‘The sale of natural gas
fuelled peaking stations is
increasing in order to help balance
the fluctuations in intermittent
renewables such as wind and solar.’
Another source of competition
comes from the development of gas
fuelled distributed generation. This
facilitates decentralised energy
production – power is produced
close to the customer, thereby
reducing losses from transmission
from centralised power networks.
This potentially could dampen
demand for gensets in the long run.
However, in practice, where
demand for power outstrips supply
– as is the case in most of subSaharan Africa for the foreseeable
future – gensets can continue to
enjoy an expanding market niche.
Challenges ahead
As noted, the sub-Saharan market
has huge potential for gensets.
However, there are challenges from
health and safety concerns,
developing technology and
competition from renewable
energy programmes in many
countries.
Gensets are manufactured
abroad and have to be imported by
African countries, many of whom
are currently conserving their
foreign currencies as foreign
exchange earnings are diminished
by the fall in the price of
commodity exports. Marshall notes
some of the key difficulties: ‘The
shortage of foreign exchange
reserves, as in Nigeria, and the low
value of the Rand in South Africa,
depress market opportunities, nor
does it help with problems in
obtaining approvals to new gas
distribution networks and access to
new gas fields in Africa.’
Then there are health and safety,
environmental and regulatory
concerns as Africa moves to adopt
European and North American
standards. For example, in South
Africa the Western Cape
government enforces maximum
permitted noise levels in urban
areas under the country’s Noise
Control Regulations 2013, which
could affect the operation of
gensets in high density urban
areas. Diesel gensets also produce
NOx (nitrogen oxide) emissions
which are health risks.
In addition, as outlined earlier,
gensets also face competition from
renewable energy programmes in
many African countries – most
notably wind and solar. Although
hybrid power solutions which
incorporate gensets reduce the
intensity of this potential threat.
A brighter future
‘Africa is tired of being in the dark,’
announced African Development
Bank President, Dr Akinwumi
Adesina when launching the ‘New
Deal on Energy for Africa’ in 2016
(as reported by The Nerve Africa).
Gensets are providing welcome
light and will continue to play an
important role in ameliorating
Africa’s power deficit. ●
Petroleum Review | July 2017 23