East Africa to diversify energy mix
Power infrastructure in the East African countries of Uganda, Kenya, Tanzania and Rwanda is inherently connected to its economic growth. As urbanization and industrialization fuel the need for electricity in cities, government focus on energy development will provide a platform for both private and public sector participants to contribute.
Moreover, it is expected that the energy blend in East Africa will diversify from its predominant dependence on hydropower, affording additional opportunities for power infrastructure advancement.
New analysis from Frost & Sullivan, Power Infrastructure Tracker in East Africa, finds that the demand for electricity in East Africa is expected to grow at approximately 5.3 percent per year till 2020. To meet these requirements, generation capacity would have to increase by 37.7 percent in Uganda, 96.4 percent in Kenya, 75.3 percent in Tanzania and 115 percent in Rwanda.
Large gas finds have placed East Africa on the map as a major participant in the world gas market. However, limited regulatory and institutional capacity, shortcomings in technical capacity and political risks are slowing down improvements in power infrastructure.
The challenge is compounded by the lack of local skills and resources. The need for external contractors and consultants to work on infrastructure projects will also escalate costs. Hence, foreign investments in the East African energy sector will be vital to establish a platform for skills growth and knowledge transfer.
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“In light of the significant investments needed over the next eight years, the power infrastructure segment is dependent on the private sector,” said Frost & Sullivan Energy and Environmental Research Analyst Joanita Roos. “The government, in conjunction with development partners, must build a more favorable business environment to facilitate growth.”
It is crucial for global investors to understand the unique opportunities and challenges of the individual countries in the region; East Africa has the lowest access to electrical power and smallest per capita generation compared to all other sub-regions on the continent. While gas development plans, financing for infrastructure and international partnership is critical for successful development of the power sector, returns will be slow.
“Focus on intraregional energy and trade integration will help reduce costs and ensure greater reliability and sustainability of power supply,” Roos said. “If strong cross-border interconnectors develop to enable consistent power flows across the region, Rwanda, Uganda and Tanzania can make a mark as net exporters of electricity.”
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.