Africa is being touted as the next frontier that will supply natural and renewable resources to the global energy market, but many countries within sub-Saharan Africa are either struggling to provide access to energy and electricity for their citizens or can’t keep up with demand, resulting in rolling blackouts becoming a common part of people’s daily lives, says Ashley Boag, head of Energy and Natural Resource Industries at SAP Africa.
Within the African energy sector there are a number of key issues that are preventing the continent from living up to its potential as a reliable contributor to the global energy balance sheet and more importantly, stemming regional economic development and social well-being.
Power to the people
The first of these key issues is a low level of access to energy for inhabitants. According to The World Bank, less than one in four people (24%) in sub-Saharan Africa have access to electricity, compared to 40% of the population within other low income countries.
Governments and utility providers in the region can adopt various strategies to help alleviate the continent’s power poverty problem. These include the need for safe, sustainable, cost-effective and environmentally-friendly solutions such as affordable, portable solar chargers that can charge cellphones and the like as well as fluorescent bulbs (CFLs) that dramatically slash power demand.
Managing power demand well
Another factor is poor reliability when it comes to the provision of power to citizens and businesses. South Africans are very familiar with rolling blackouts as a consequence of ageing infrastructure that breaks down at inconvenient times or the need to optimise assets to meet the increasing demand for power, especially during winter.
Unfortunately, the rest of Africa are not strangers to this scenario, as African manufacturing enterprises are plagued by power outages by a whopping 56 days annually on average, according to The World Bank. This causes African businesses to lose 6% of sales revenues in the informal sector alone and up to 20% within areas in which back-up power solutions are limited or non-existent.
Modern ICT tools can help energy providers with outage monitoring and prevention, demand response, asset performance, analyse consumption patterns and load forecasting. There are software packages that will deliver a single, real-time view of utility companies’ operations and boost their plant as well as their grid efficiency.
African power presses up button on pricing elevator
The final key issue is the high cost of energy within Africa. According to The World Bank power tariffs have dropped in most parts of the developing world to fall between $0.04-0.08 per kilowatt-hour, compared to the sub-Saharan Africa average of $0.13 per kilowatt-hour.
A number of avenues are available to utility providers to cut costs and tap revenue from rather than resorting to upping the price of power. For instance, big data used to be a technical problem for organisations to cope with and now, in the age of analytics, it has become a business opportunity for them to exploit.
By using data analytics and other solutions, firms can cover important areas as diverse as balancing profits, monitoring sustainability and safety of supply by diagnosing and even predicting issues before they happen.
This leads to increased asset effectiveness, improved prevention and handling of unplanned downtime in real-time, better daily forecasting and even the ability to predict demand. For example the Plant and Grid Operations solutions from SAP enable utility providers to create a safe, reliable, profitable energy infrastructure, and monitoring of plant as well as grid performance.
Various deficiencies and limitations in the African power sector are not just inconvenient for companies and citizens, but actually threaten the continent’s long term economic growth prospects and competitiveness as a region within the global economy.
The cost to the economy of load-shedding is equivalent to 2,1% of GDP on average according to The World Bank. This means that the use of technology to manage power better not only makes life more convenient for people and businesses, but enables economic growth for the continent as well.