A Review of the Nigerian Energy Industry

Cross-border power can help African economies overcome low electricity supply

*Power transmission tower.

13 April 2017, Sweetcrude, Lagos — With the recent announcement of an ambitious power project to connect Cape Town and Cairo within the next three years, the opportunities for reliable cross-border electricity generation are once again in the spotlight.

Mark Makanda of global fast-track power provider APR Energy says that cross-border power deals have the potential to exponentially accelerate GDP growth for the whole of the African continent, adding that mobile fast-track power should play a significant part in making this a reality.

“The correlation between electricity supply and economic growth is irrefutable, and the fact remains that no government adequately grows its GDP if power distribution reaches less than half of its population,” Makanda says.

A report published by McKinsey & Company, Powering Africa, notes this is exactly the situation that the vast majority of African countries are facing. According to the report, only seven countries on the continent have electricity access rates exceeding 50%. The report also indicates that countries with electrification rates of less than 80% of the population consistently suffer from reduced GDP per capita.

“The only countries that have electrification rates of less than 80% with GDP per capita greater than $3,500 are those with significant wealth in natural resources, such as Angola, Botswana, and Gabon. But even they fall well short of economic prosperity,” the report states.

Makanda notes that a major issue in sub-Saharan Africa, even in booming economies like Nigeria and Kenya, is the fact that electricity distribution is confined to major urban centres. “It is estimated that there are over 625 million people in sub-Saharan Africa living outside of these main distribution grids. Generation capacity is certainly one of the foremost challenges in most countries. The cost of installation, as well as the time frames involved are major barriers to expanding a country’s energy footprint – thereby stifling economic growth.”

Cross-border power – which is a major reason for the existence of Africa’s regional power pools — represents a major opportunity for many countries, he says. “Over recent years, mobile gas turbines have been opening doors to new markets for countries with natural gas reserves. Fast-track power suppliers are able to set up generation facilities near natural gas sources within weeks, and ensure reliable electricity supply that can be sold and exported across regional transmission lines to neighbouring countries. For the importing countries, they gain access to much-needed power without the time and expense of installing permanent generating capacity.”

A major advantage of mobile power generation, according to Makanda, is the fact that it can serve as a bridging solution so countries can attract development and grow their economies immediately, as opposed losing out on five to ten years of possible growth while permanent capacity is being installed.

“Another major challenge solved by mobile power providers is the local skills gap. Unlike many providers, however, that bring in skilled labour, APR Energy strives to hire up to 70% of the people who install, operate and maintain our power plants from the local workforce. That requires us to provide intensive training and development to ensure our employees have the necessary skills and knowledge. When our contract expires, those skilled individuals remain in the community and can go on to operate and maintain the newly constructed permanent facilities,” Makanda says.

“It is important to understand that mobile power solutions do not take the place of permanent facilities. But mobile power has proven to be a viable bridging solution that supports economic growth while permanent facilities are constructed. A capable service provider also offers scalable solutions that can quickly react to changing demand,” Makanda says.

APR Energy is the world’s leading provider of fast-track mobile turbine power. The company’s fast, flexible and full-service power solutions provide customers with rapid access to reliable electricity when and where they need it, for as long as they need it. Combining state-of-the-art, fuel-efficient technology with industry-leading expertise, APR Energy’s scalable turnkey plants help run cities, countries and industries around the world, in both developed and developing markets.

Finally, Makanda states that fuel flexibility is vital. “Fuel flexible turbines like the units used by APR Energy can be converted between gas and liquid fuels within minutes, meaning that we offer the ability to immediately react to issues like disruptions in particular types of fuel, or changing costs,” he concludes.

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