Emergency Generation Options

Transcription

1 Emergency Generation Options Mark Pickering Empower Regional Director: South Africa African Utility Week Cape Town, 20 May 2009

2 Overview Why consider emergency power? What type of emergency power plant? Economics of emergency power? Conclusion

3 Power Deficit in Sub-Saharan Africa Africa s firms report losing 5 percent of their sales as a result of frequent power outages; this rises to 20 percent for informal sector firms unable to afford backup generation facilities. International Monetary Fund, April Regional economic outlook : Sub-Saharan Africa.

4 Power Deficit in Sub-Saharan Africa In recent years more than 30 of the 48 countries in [SSA] have suffered acute energy crises The region s generating capacity has been stagnant for many years; its growth rates are barely half those in other developing regions. To make matters worse, as much as one-fourth of sub-saharan Africa s plant is currently not in operating condition. Normalizing for population, and subtracting South Africa, the installed capacity of sub-saharan Africa is only one-third of South Asia s, and about a tenth of that of other developing regions. IMF, Regional Economic Outlook: Sub-Saharan Africa

5 Power Deficit in Sub-Saharan Africa Generation capacity (MW per million population) Other low income countries Sub-Saharan Africa low income countries Electricity coverage (% population) Other low income countries Sub-Saharan Africa low income countries World Bank, Africa Infrastructure Country Diagnostic

6 Power Deficit in Sub-Saharan Africa Range of Utility Tariffs US$/kWh Sub-Saharan Africa Other developing regions World Bank, Africa infrastructure country diagnostic

7 Infrastructure Spending Requirements in Sub-Saharan Africa US$ billion per year Capital expenditure Operations and Maintenance Total spending ICT % Irrigation % Power % Transport % Water & Sanitation % Total World Bank, Africa Infrastructure Country Diagnostic

8 Power Deficit in Sub-Saharan Africa Sub-Saharan Africa has developed only a fraction of its power-generation potential. Key obstacles include: Primary energy resources are concentrated in countries that are remote from centres of demand, and too poor to raise the multi-billion dollar finance needed to develop these resources. For examples 60% of the region s hydroelectric potential is located in DRC and Ethiopia Diseconomies of scale. 21 of 48 Sub-Saharan countries have national power systems with under 200 MW generation capacity Only 16% of power production is traded (almost all of it between South Africa and its immediate neighbours), a level that can be substantially increased. World Bank - Africa Infrastructure Country Diagnostic

9 Power Deficit in Sub-Saharan Africa Cost of power shortages cost of unserved energy estimated between $1-$7/kWh Utility options Import power limited grid capacity Load shedding very unpopular and costly Emergency generation costly, but it works Over 1000MW of emergency generation running across Africa

10 Ugandan Example Supply / demand balance Demand Shortfall Other Aggreko 3 Aggreko 2 MW 200 Aggreko HFO IPP 100 Luka Buljan, CEO 50 Ghana 0 12 November 2008 Supply Hydro-new Hydro-old

11 Uganda: Consequences Power pricing Average cost of generation: Old 2c/kWh Emergency c/kwh Weighted average cost 18c/kWhP Average price to customer 18c/kWh Government subsidy of up to $100m/year Interim power is cheap to install, but expensive to operate

12 Impact of the Global Recession? Impact on Sub Saharan Africa Low or negative economic growth has relieved pressure on power utilities for now Lower earnings from commodities means lower government revenues and hence less ability to fund power projects Also lower growth means less appetite from foreign investors - including for power projects Once economic growth returns power demand will return. Will we be ready? Implications for utilities Much harder to source financing for large power projects Interim power likely to remain part of the solution IMF, Regional Economic Outlook Oct 2008

13 Power Solutions 30 Indicative all-in cost of new-build baseload Interim Power 25 Usc/kWh New-build IPP 5 0 Hydro Gas (CCGT) Coal Fuel oil Fuel oil Diesel

14 Deployment time (Months) All-in Power cost US$ /bbl) Diesel Cost vs. Deployment Time New Build / IPP HFO

15 Plant Size and Contract Term Plant size (MW) Diesel Fuel Oil New Build / IPP Term of Power Purchase Agreement (Years) 20

16 Interim Generation Technologies Gas turbines Limited availability of gas Diesel generators Light Fuel Oil (LFO, or diesel) Heavy Fuel Oil (HFO, bunker fuel)

17 Diesel Generator MAN 18V28-32S genset: 4.2MW

18 12MW Fuel Oil Plant 55m 32m M3 Site Layout: Colchester Trial Assembly

19 Interim Power Cost Structure Cost comparison $50/bbl, 85% load factor) Fuel Oil Diesel Fuel Variable O&M Capacity

20 Liquid Fuel Generation Options US $/bbl Crude Oil Fuel Oil Diesel Global Liquid Fuel Prices

21 Liquid Fuel Generation Options Total cost of power 85% load factor) Power price (USc/kwh) Fuel Oil Diesel Crude oil price (US$/bbl)

22 LFO vs. HFO at varying Plant Load Factors Crude oil: $60/bbl, 40% LFO-HFO price differential LFO HFO All in US c/kwh % 40% 50% 60% 70% 80% 90% 100% Plant Load Factor

23 EMPOWER Solution Fuel Oil-fired generation Fully containerised mobile plant Deployed anywhere in approx. 6 months 60MW capacity presently available, in 12MW modules Stand-alone or grid synchronised Lease and operate (+2yr) Lease/Operate/Transfer option

24 Conclusions Power supply remains a serious challenge in SSA Permanent solutions must be found, but it will take many years to overcome the backlog Liquid fuel-based solutions are often the only practical solution in the short term In general fuel-oil based solutions will be cheaper than diesel solutions

25 Thank You