Research and analysis

South Africa: Lord Mayor's regional energy conference

Published 18 September 2014

This research and analysis was withdrawn on 8 August 2016

This publication was archived on 5 August 2016. This article is no longer current. Please refer to Overseas Business Risk - South Africa.

0.1 This publication was archived on 5 August 2016.

This article is no longer current. Please refer to Overseas Business Risk - South Africa.

0.2 Summary

Lord Mayor of London’s Southern Africa Regional Energy Conference on 10 September attracts Ministers, National Utilities and energy practitioners from across the region and brings out the clear link between energy investment and growth/ development. Agreement that much more investment and effort needed in the areas of renewable energy solutions, independent power provision, and mitigating the impact of hydrocarbons. But solutions still a way off. Opportunities for the UK.

0.3 Detail

A joint UK/SA Southern African Energy Security Summit attended by the Lord Mayor drew industry leaders and energy ministers/officials from around the Southern African region, including the Zimbabwean Minister of Energy and Power Development, Mr. Dzikamai Mavhaire, the Malagasy Energy Minister Mr. Richard Fienena and Mr. Willem Isaacks, Namibian Deputy-Minister of Mines and Energy.

In her keynote address, the Lord Mayor emphasised that without affordable and reliable energy infrastructure, broader economic and social objectives could not be achieved. The abundance of renewable energy potential in the Southern African region needed to be better exploited, and sustainable, resilient and cost effective regional energy infrastructure constructed. The opportunity was there to get right what others had got wrong in the past and build in new planning climate-friendly provisions including carbon capture storage and renewable technology.

The Lord Mayor added that the City of London was well-equipped to assist Southern Africa in achieving energy and infrastructure investments by providing the financial and other services required to underpin the necessary investments.

Energy, Growth and New Technology

It was generally agreed that Southern African governments had in place good policies driving forward planning for new energy grids, new technologies, and new capacity. The problem was that the private sector did not believe implementation would be either swift or smooth, troubled by market price volatility, labour costs and currency fluctuations.

Government speakers present reaffirmed their willingness to work together, but admitted they had yet to follow up by signing up to the necessary agreements/protocols. The panel wondered whether an organization might be identified to be the enabler for progress. The ideal organisation would need to be a trading organisation equipped to operate in an integrated fashion, for example with food/water/energy issues arising from regional hydro power development.

All agreed that new technologies offered the best hope to filling the supply/demand gap between older infrastructure being decommissioned and new facilities coming online. Co-generation, reusing waste heat recovered from industrial plants, and renewable energy, from Independent Power Providers (IPPs) were prime candidates.

Particular interest was expressed in the trajectory of wind energy, the potential contribution of unconventional hydrocarbons and the contribution of coal to SADC energy Security. The subject of Carbon-Capture and Storage also yielded strong interest and a discussion around ensuring a legally sound approach.

Funding Models and Next steps

A further limitation was a lack of access to funds. An important solution: PPP in South Africa was championed by commercial representatives who argued strongly for energy sector reform in South Africa. They proposed an Eskom split into separate entities managing systems, transmission and generation. This model would encourage a greater number of generators, and better participation in the power pool. Effectively a private sector led regionalisation.

In their concluding remarks, a regional panel composed of Ministers (Madagascar and Namibia) and regional utilities (Botswana, Mozambique and Zambia) identified areas of follow-up including: a re-energised exploration of PPP and other funding models; a further push on developing/overcoming renewable energy opportunities and challenges; a study of the wider tax and legal implications of generating, buying and selling energy regionally; and a discussion on tariff models and the dynamic between government policy and investor confidence.

0.4 Comment

This was an important opportunity to have a candid and deliverables-based discussion on the energy challenges facing Southern Africa. There is plenty to follow-up alongside a range of opportunities for British business- which UKTI will now disseminate. The next immediate step is to relay the results of the event to those who were not able to attend.

0.5 Disclaimer

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