The emerging co-generation market is proving to be an asset in Africa where access to power is limited. However, its worth as an electricity production mechanism for export to the national grid is still undervalued and underutilised, mainly due to a lack of understanding, as well as funding and support from the government and financial institutions.
New analysis from Frost & Sullivan (http://www.energy.frost.com), "The Emerging Cogeneration Market in Sub-Saharan Africa", finds that there is potential to produce between 1% and 20% of a country’s total electricity demand per annum through co-generation. The research covers South Africa, Tanzania, Mauritius, Uganda and the Ivory Coast.
Drivers for the co-generation market include energy shortages, environmental concerns, waste usage and government incentives and rebates. Restraints are often linked to the lack of infrastructure, implementation costs and the absence of government support.
“Growth in sub-Saharan Africa co-generation is driven primarily by energy shortages,” noted Frost & Sullivan’s Energy & Power Systems industry analyst, Megan van den Berg. “Companies need to produce their own power to meet electricity demands and most have byproducts from processes performed which can be used as fuel or heat.”
Companies in Africa incorporate co-generation facilities to meet or supplement their electricity and power demands, as there is usually insufficient power available from the local utilities. The co-generation market, overall, is expected to increase in sub-Saharan Africa over the next 10 years, especially among industries that are looking to expand into this region.
Low electricity tariffs, however, have served as a disincentive to investment into increasing the efficiency of a co-generation plant to produce excess power for the national grids in sub-Saharan African countries.
“The lower priority given to co-generated power production, when compared to other renewables, and limited government understanding and support, have resulted in a lack of policies that would provide security of investment and tariffs to justify implementation costs,” added Van den Berg.
Co-generation can provide additional and valuable revenue streams to agro- and wood-based industries, while assisting in meeting the growing power supply gap faced by many African countries.
“Government support and a clearly defined policy on using byproducts such as bagasse as a substitute to fossil fuel are required,” advised Van den Berg. “Common protocols and standards regarding co-generation, together with clear policies offering clarity on investment security, can steer co-generation toward becoming a substantial long-term green power-generating mechanism.”
If you are interested in more information on this study, send an email with your contact details to Samantha James, Corporate Communications, at samantha.james@frost.com.
"The Emerging Cogeneration Market in Sub-Saharan Africa" is part of the Energy & Power Growth Partnership Service programme, which includes research in the following markets: Grid Integration Challenges of Renewable Energy in South Africa, Global Diesel Generator Set Market, Global Gas Genset Market and Investment Opportunities for Independent Power Producers in West Africa. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
