The Energy Integration in Southern Africa

Jean-Pierre FavennecIFP Professor – Consultant

Johannesburg – December 2, 2010

Summary

Energy in the world

Energy in Africa

Energy in Southern Africa

Energy in the World

Recent changes :

- Reduction of CO2 emissions

- Limitations of oil production

- New gas situation

- Coal

- Renewables

20.7

12.70

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

$/b

28.8

65.1 72.5

54.5

38.1

97.6

19.1 17.7

28.4

24.5 24.9

61.1

Source : Platt’s S 404*17 – July 2010

Dated Brent price ($/b) – January 1996 – July 2010

Weekly averages

Annual averages

1970 1990 2010 2030 2050 2070 2090

0

10

20

30

40

50

60

Scenariowith reduction of emissions

Reference Scenario

Emissions (Gt CO2)

Natural carbone sequestration

Captured carbon

Fuel switch

Wind, Solar, nuclear

Biofuels

Energy efficiency

Source : Commission Européenne

CO2 emissions

Energy in Africa

South and central America

North America

Africa

Asia non OECD

Europe

China

EL 101*1 – April 2009

Source : AIE

CIS

World electricity generation 2006 World total = 18 921 TWh

5134

3531

959

1658

588Middle East

682 2904

1679

Asia OECD

1786

World electricity production by source (TWh)

Coal 7756

Natural Gas 3807

Nuclear 2792

Hydro 3035

Oil 1096

Renewable 435

AF004 – October 2009

Source : BP Statistical Review

Energy consumption in Africa

Mtoe

0

50

100

150

200

250

300

350

77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07

Electricité primaire

Charbon

Gaz naturel

Pétrole

Millions de tep

Electricity (primary)

Coal

Natural gas

Oil

The energy divides Divide between Africa

and the rest of the world (15% of world population for 3% of world energy consumption)

Divide between North Africa-South Africa and the rest of Africa

Divide between urban and rural areas: Urban areas look like energy spots

3%

7%

Region energy consumption proportionEnergy barriers

North and South Africa: two specific areas

Hydroelectricity in Africa

Potential

Energy Integration in Southern Africa

Existing situationNeeds in electricity

The Integrated Resource PlanWhat about renewables?

Integration : benefits and existing pools

Source : African Energy

Southern Africa’s power Industry and Interconnections

An existing electrical integration mostly between Mozambique and South Africa

HH

T T

T

W

H

TTTT

N

N Nuclear Power Plant

W Wind Power

T Thermal Power Plant

H Hydro Power Plant

Main power transmission line

Remarque : 1 circle = 3 power plants at least except nuclear power plant for which 1 circle = 1 power plant

Southern African Power Pool

South Africa represents 81% of SAPP in 2010 and will remain at 77% of SAPP in 2025

The Integrated Resource Plan : Context and Description

Obligation after National Energy Act of 2008 Long term electricity capacity plan to develop a

sustainable electricity investment strategy for generation capacity and transmission infrastructure for South Africa over the next 25 years. Demand-side management (DSM) Pricing Capacity provided by all generators (Eskom and independant

power producers) Environment

The Integrated Resource Plan : Hypothesis

GDP growth on average 4,6 % per year over the next 20 years

It requires from 30 439 MW to 52 724 MW of new capacity depending on scenarios for 454 357GWh produced in 2030.

It assumes at least 3420 MW of demand side management programmes

5 models studied to establish the balanced revised scenario

A base case which minimise directs costs 3 emissions limits based scenarios

EM 1.0 : imposes an annual emission limit of 275 MT EM 2.0 : imposes an emission limit of 275 MT of carbon dioxide by 2025 but

allows emissions to go to higher levels prior to 2025 EM 3.0 : imposes a tighter emission limit of 220MT of carbon dioxide from 2020

A Carbon Tax based scenario (CT 0.0) : imposes carbon taxes escalated to 2010 Rands an contained in the LTMS documents

2 others model were studied : a regional developement model and an enhanced DSM model

Sources : DOE

The Integrated Resource Plan

3 scenarios Low Cost Scenario Balanced Scenario Low Carbon Scenario

Funding (BUS$) 78 85 (+10%) 125 (+60%)

Carbon emissions (MT)

380 275 (-30%) 220 (-40%)

Generation mix by 2030

Capacity development (MW)

The Integrated Resource Plan : Challenges A huge amount of renewables capacity

Wind : 4 500 MW in the Balanced scenario up to 2019 Solar : 400 MW Wind + Solar : 7 200 MW between 2019 and 2030

Questions raised : Is it possible to build such capacities : resources, technical

problems Problem of cost and economic rentability? Ability for quick construction and maintenance? Problem of grid stability?

The Integrated Resource Plan : Challenges (2)

Decentralised electricity not adressed

Importance of transmission lines

Integration benefits Benefits : foster the development of the economy. Keys actions :

Develop infrastructures Most important partners :

Mozambique. There is already an important hydro production (Caora Bassa) and new capacities will be built. Mozambique is also supplying natural gas to RSA (Sasol)

Zambia (hydro potential) Zimbabwe

 Limited cooperation : RDC. RSA is interested in electricity of Inga. But the Chinese

presence (exchange of raw materials against investments) makes difficult this cooperation.

Angola Key issue : transmission

Euratom (1957)

Euratom (European Atomic Energy Community) Success :

Legal framework, safety standard uniformisation Progressive enlargement of the cooperation Broad development on innovative technology Decrease in energy dependance Efficient information centralisation about nuclear stocks and flows,

and investment Fight against nuclear proliferation

Lacks : Some legislative contents (about normalisation for example) Decision process

ECSC (1951)

European Coal and Steel Community Success :

Long term vision and comon process• Peace, stability, prosperity, solidarity• Efficient response during crisis

Autonomous legal framework• Uniform social protection and labour law

Lacks : Emergence of great enterprises Difficulty for struggling on price non-accordance and for assuring

transparancy No equalization in salary

Benefits of integration

In West Africa cost of kwh supposed to be reduced by 50 % if good interconnections between the different countries of WAPP (West African Power Pool)

Thank you for your attention!