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Amy.Offord_111 Aug 16



The task is huge, but the region’s governments are increasing investment in electricity projects, writes Neil Ford.

The South African government’s plans for Eskom are crucial, not just for the country itself but for power consumers across Southern Africa because the company is the lynchpin of the Southern African Power Pool.

Pretoria’s attitude towards Eskom over the years has been changeable. At times, the ANC government has appeared determined to defend the parastatal’s dominant position in the industry as a national power company. At other times, it has been keen to create a more competitive sector that would require Eskom’s position to be eroded.

President Cyril Ramaphosa told the South African parliament in February that electricity shortages due to load shedding that had taken place that week were “a hugely damaging reality check”. “There is no single solution to the problems at Eskom – neither restructuring, nor refinancing, nor cost cut-ting, nor tariff increases, nor better plant maintenance on their own will have the necessary effect. We need to pursue all of these measures and more, simultaneously,” he said.

Eskom is by far the biggest player in African power provision at all levels with 45GW of generating capacity, but there are a growing number of independent power producers, particularly those with gas-fired capacity and in the renewables sector.

It looks to be a matter of when, rather than if, the country accelerates its move away from coal towards cleaner energy. Apart from the need to cut carbon emissions, coal-fired plants are responsible for dangerous levels of air pollution, particularly in Mpumalanga Province, where the majority of the country’s coal plants are located.


A steady fall in the cost of construction, operation and maintenance for wind and solar power projects, coupled with rising efficiency levels, makes renewables increasingly attractive. Moreover, results from a survey published in March by UK think-tank E3G showed that 80% of South Africans want foreign investors in the country’s power sector to focus on renewables rather than coal.

The main reasons given were the economic benefits, the role of renewables in tackling climate change, job creation, and lower air and water pollution. Eskom’s long and entrenched position in the coal sec-tor, aligned with its limited experience in developing renewables, may be another reason why the population hopes new investors target the renewables sector, say industry observers.

Renewable energy currently accounts for about 5GW of South Africa’s generating capacity and the government hopes to boost this figure to 19GW by 2030 (see p69). But there are concerns that Pretoria is not putting enough effort into ensuring grid stability and a reliable power supply from else-where to balance out the fluctuating output typical of solar and wind power projects.

How South Africa will provide all this new capacity remains to be seen. The government estimates that it will cost R1tr ($71bn) to build and that even more will be needed in the following decade when another tranche of coal-fired capacity needs to be replaced. Former President Jacob Zuma claims that nuclear energy is the answer to the problem, but it would take at least a decade to build new reactors and it is certainly not a low-cost solution.


For the first few decades after gaining their independence, some African governments promised to increase the number of people who had access to electricity, but little progress was made in most countries. However, connection rates have finally begun to increase and electrification plans are now being given more credence.

The Angolan government has set a target of boosting the national electrification rate to 50% by 2022 – up from 42% at present – under its National Electricity Sector Development Plan. This represents a substantial increase, but not as big as might be expected given that national installed generating capacity is to rise to 7.5GW by 2022, representing a fourfold increase in just seven years. This may be because the expansion of the wider distribution network will take more time to complete, with the electrification programme over the next four years focused on urban areas.

Mozambique’s government has set an even more ambitious goal of achieving universal electrification by 2030. This represents a substantial challenge, given that only 24% of the population had access to electricity in 2016, according to data from the World Bank.

National Director of Energy Pascoal Bacelar said in November 2018 that the $5bn-plus electricity programme would be implemented by the publicly owned electricity company EDM and the government’s Energy Fund. The World Bank, the European Union, Sweden and Norway are expected to jointly provide about $223m in funding during the first three years of the programme, though it remains to be seen where the rest of the money will come from.


National power company Zimbabwe Electricity Supply Authority (ZESA) wants to increase electricity tariffs in an effort to finance improvements to its infrastructure. It applied to the Zimbabwe Energy Regulatory Authority in March to be allowed to increase tariff s by an average of 30%. Two decades of economic crisis have left most Zimbabweans unable to pay higher rates, and tariff s have been frozen since 2012, with a main residential rate of $9.83/kWh. However, ZESA has warned that it may have to impose rationing and that some power lines could collapse if it cannot generate more revenue.

It needs to finance work on the 920MW Hwange coal-fi red power plant, which is undergoing a 600MW expansion. Another key power source is the Kariba South hydro scheme, which has a nameplate capacity of 1,050MW. Imports from South Africa and Mozambique provide most of the remainder of the country’s power.

The potential for shortfalls in Zimbabwe would be reduced if the Batoka Gorge hydro scheme were developed, as planned, in partnership with Zambia. Project development costs are estimated at $4.5bn, with generating capacity expected to be in the range 1.6-2.4GW, depending on the design chosen. It has been suggested that GE could build and operate the project on a build-operate-transfer basis. However, even if work began this year the plant would not generate any electricity output for at least six years.

This article is an extract from the Africa Energy Yearbook 2019, a partnership between African Business and EnergyNet.