Megaproject

WATER TECHNOLOGY

Lighting Up The African Energy Sector In 2024The energy sector in Sub-Saharan Africa (SSA) is powering up. In the recent past, countries across the continent have implemented new legal frameworks and policies to promote energy transition and liberalise their energy markets. Among the SSA countries leading the charge to transform their electricity sectors, Kenya, Mauritius, Namibia, South Africa, Tanzania and Zambia shine brightly in terms of recent legal developments. Since the start of the year, these countries have either introduced new policies, laws and regulations or signalled their intentions to do so. Kenya’s new Energy Act came into effect in 2019 with the aim of establishing energy sector entities to regulate the generation, supply and use of electricity. Far-reaching draft regulations have now been published in support of the Energy Act. One of the most significant of these is the draft Energy (Electricity Market, Bulk Supply and Open Access) Regulations 2024, which propose a shift of the current Kenyan electricity market from a single off-taker to an open market system. Other draft regulations supporting this shift concern the licensing of power undertakings, mini-grid development, net-metering for the banking of excess energy, electricity tariffs and those setting standards for high-quality electricity delivery. Kenya has also developed climate change legislation, the Climate Change (Amendment Act) 2023 and the Climate Change (Carbon Markets) Regulations 2024, focusing on reducing carbon emissions and generating tradable carbon credits. In addition, the country is speeding up the transition to electric vehicles. In September 2023, it created a framework for electric vehicle charging and battery-swapping infrastructure. The Mauritian Government has pledged to reach 60% renewable energy and phase out coal by 2030 and has put in place some key structures to achieve these goals, such as establishing the Mauritius Renewable Energy Agency and the Energy Efficiency Management Office. Other key regulatory steps to promote the use of renewable energy in Mauritius are schemes for small-scale distributed generation, net metering for medium-scale distributed generation, and the Carbon Neutral Industrial Sector Renewable Energy Scheme. The transition to electric vehicles is also likely to pick up speed through the Solar PV Scheme for Charging Electric Vehicles. Namibia’s energy mix for the foreseeable future is likely to consist of gas, petroleum and renewable energy, and this is reflected in two new pieces of draft legislation being ready for tabling in parliament. An emerging area to watch is green hydrogen, where there has been increased due diligence work on investment. Namibia has introduced the Electricity Bill and the Namibia Energy Regulatory Authority (NERA) Bill, which will create a national regulatory framework and a single energy regulator, NERA. This new regulator will have oversight of electricity, downstream gas, downstream petroleum, renewable energy, energy efficiency and energy conservation. On the renewable energy front, the past 12 months have seen increased activity among IPPs investing in solar projects for industrial use, especially in the mining sector. This trend has gone hand in hand with an uptick in M&A transactions on the part of developers and IPPs. South Africa has undergone significant liberalisation in recent years, with IPPs increasingly targeting the commercial and industrial market. The new Electricity Regulation Amendment Bill 2023 seeks to create a competitive electricity supply market as well as South Africa’s climate change response, emission trading scheme and carbon offset regime. Opportunity lies in the opening of new markets for IPPs. An emerging trend is an increase in the number of private-to-private IPPs, which generate and sell energy directly to commercial and industrial customers. However, these projects mostly involve wheeling through the Eskom and municipal grids, which is public infrastructure. This can give rise to contractual complexity. Tanzania’s recent Public Private Partnership Act amendment exempts certain solicited projects from competitive bidding, allowing the Government to engage directly with individual private parties. This is intended to speed up the execution and delivery of PPP projects. For the exemption from competitive bidding to apply, there must be an urgent need for the project’s deliverable, and it must be clear that any other procurement method would be impracticable. Crucially, the circumstances giving rise to the urgency should not have been foreseeable by the contracting authority. Other exemptions include that the private party concerned should own the intellectual property rights to the key approaches or the technologies required for the project, or have exclusive rights in respect of the project, with no reasonable alternative or substitute available. The Ministry of Energy has committed to implementing various large energy projects based on conventional energy sources, such as the Julius Nyerere Hydropower Project, the East African Crude Oil Pipeline and the Liquefied Natural Gas Project. There is also a strong focus on renewables, especially in the past 12 months, especially in terms of small solar and commercial and industrial solar projects. In a recent major development, the Zambian Government launched its integrated resource plan, which outlined current and future energy needs, looking at both demand-side and supply-side resources. Further, revised regulations to the Energy Regulation Act and the Electricity Act were issued in 2023, with regulations still to be finalised on an open-access grid regime, net metering and mini-grids. In the past year, the focus has increased on solar projects, especially commercial and industrial projects, and in the development of battery storage projects, as well as biomass and wind projects. It is clear that the African energy sector is gearing up to be able to switch on a clean, decarbonised power supply that will assist to turn on the lights for all who call the continent home. Want more stuff like this? Join over 117, 500 subscribers and receive our weekly eNewsletter! Please check your inbox or spam folder to confirm your subscription.

mining

Aug 19, 2024

articles found