The power sector in Africa,Challenges and prospects (Part 2)
This article is an extract from the PwC Power and Utilities Survey, 2015. The Survey covered 15 Sub-Saharan African countries including Ghana.
Advertisement
The Energy ‘trilemma’
The trade-off between the three classic energy objectives of security of supply, affordability and sustainability has long been recognised as a central dilemma, or ‘trilemma’, for energy policy. The energy supply that might be the most secure may not be the most affordable and/or the most sustainable and vice versa.
And in Africa, of course, there is the added issue of access to energy in the first place, which adds an additional element to the ‘security of supply’ dimension. We put the question of this ‘energy trilemma’ to our survey participants. We asked them to assess how well they feel the continent rates on each dimension of the trilemma but also forced them to make trade-offs between the different elements, in a reflection of the real-life trade-offs that exist. Not surprisingly, security of supply is confirmed as the number one priority but survey participants expect significant change in the next five years.
Currently they give sustainability only 45% of the emphasis given to security of supply (with affordability receiving 82%). By 2020, they expect this gap to close significantly, with sustainability moving up to 64% of the emphasis given to security of supply.
Out of all the regions in the world, Africa puts least emphasis in the trilemma on sustainability, mindful of the enormous energy availability challenges it faces. Only 40% of our survey participants report that it receives a major focus in their countries’ policies (figure 2). In contrast, security of supply, energy access and affordability get a much higher focus. However, as the energy trilemma results show and in common with other regions, this is changing as cleaner energy rises up the agenda.
Given that nearly a third of the population of sub-Saharan Africa are without access to electricity and many of those who are connected suffer frequent supply interruptions, expansion of power generation and networks is a top priority and a major challenge.
We asked the survey participants to explore the barriers to electrification (figure 1). Funding topped the list with over three-quarters (77%) reporting that it was a big or very big barrier.
And while the issue of insufficient generation was seen as a major barrier by two-thirds (67%) of those interviewed, an even more significant barrier is the need to extend the distribution grid to get power to homes and businesses. In turn, this lack of distribution infrastructure is a major factor in stacking up a prohibitive cost for connecting new customers to the grid, which was seen as a major barrier by 63% of those surveyed.
A similar proportion also said the affordability of off-grid solutions remained a major barrier.
About PwC
PwC firms help organisations and individuals create the value they're looking for. We're a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/gh
Business School – Upcoming session:
Topic(s): IT Audit Module 1
Venue: The African Regent Hotel
Date: 30 May 2016
Enquiry and registration: Please contact Salome Aku Duse on 0302 761500 (ext 301) or via email to pwcgh.businessschool@gh.pwc.com. — GB