May 17, 2020

Eastern Africa Will Head Future of African Natural Gas Market

Ernst & Young
Africa Oil and Gas
Elias Pungong
Mozamb
Admin
2 min
A 1973 mail stamp printed in Nigeria featuring natural gas storage tanks
Ernst & Young released a new report at Africa Oil & Gas Week in late October that declared Africas oil and natural gas resources attractive to...

Ernst & Young released a new report at Africa Oil & Gas Week in late October that declared Africa’s oil and natural gas resources attractive to many investors for a variety of reasons.

“Natural gas in Africa – The frontiers of the Golden Age,” the 2012 report, says local players in the oil and gas spectrum will experience growth as well as larger longstanding companies. Eastern Africa’s natural gas sector is one huge driver in the growth of the continent, says Ernst & Young Oil & Gas Leader Elias Pungong. He says the natural gas will lead social development, local employment and infrastructure development.

The discovery of offshore gas in Eastern Africa, notably Mozambique and Tanzania, is a promising leader for the future, although currently, West African gas growth has been developing at a faster pace. Nigeria and Angola lead the continent in gas production, accompanying a deepwater oil boom recently. The Ernst & Young report says Algeria, Nigeria and Egypt have the highest reserves although production has not yet met levels in other countries.

The report says opportunities will abound for oilfield services for both international players and local companies that can play parts within the supply chain. Broader infrastructure across the continent will build export facilities, both for liquefied natural gas and pipeline and gas distribution networks, supporting local gas demands.

“African governments and regional NGOs will of course have critical roles to play – first and foremost, developing a meaningful and practical master gas development plan, one that addresses the upstream tax and licensing models, as well as the necessary infrastructure issues and investments, and local training and job creation issues,” Pungong says. “Collaboration and partnerships with the IOCs, both big and small, will likewise be critical.”

The new discoveries in Eastern Africa bode well for the natural gas sector in Africa as a whole, which will stand to build infrastructure within the continent and strengthen the economy.

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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