News Centre: Hot topics

Drastic regulatory reforms are reshaping South Africa’s electricity supply industry (ESI) into a diversified and competitive market. With the unbundling of the state power utility Eskom into separate units for generation, transmission and distribution, already underway, a deregulated energy market dominated by private players and electricity traders, is emerging.

Through reporting and the latest data, African Energy has been closely monitoring and covering the transition and the trends towards a liberalised ESI.

Green hydrogen (GH₂) prospects in Africa are developing at breakneck speed. But the biggest questions remain unanswered.  

• Yes, Africa has the resources but can these highly capital intensive projects be made bankable while lenders demand heavy risk premiums on African projects?
• Can commercial offtake agreements be put in place without penalising more expensive first movers?  
• And which projects will prevail?  Competition is growing for sites with the best wind, solar irradiation, water supply, logistics and access to market.  
• If this is yet another scramble for Africa, will it bring sustainable development, unlike the 19^th and 20^th century quests for physical resources?

Tunisia has some of the best prospects for renewable energy in Africa. It has good wind resources, excellent solar resources and a strong economic imperative to displace imported and expensive Algerian gas. Its proximity to Europe also means that it will amongst the first countries to benefit from HVDC and – potentially – green hydrogen technology.

Excellent officials are driving policy at the Ministry of Industry Mines and Renewable Energy and want projects to succeed. But President Kaïs Saïed’s poisonous scapegoating of alleged ‘profiteers’, and his inflationary and subsidy-dependent macro-economic policy make delivering projects much harder than it needs to be.

African Energy has been weighing the risks and opportunities.

In every country and region of Africa the addition of more transmission capacity will open new IPP opportunities, allow more wind and solar to be added, will stimulate trade making generation projects more bankable, and of course will bring power to more businesses and people, improving lives and stimulating economic growth.  Detailed planning, better financial models, and improved regulation are finally being put in place at utility, power pool and multilateral institution level. The test is whether serious money will follow.

African Energy is following what could be the single most important phase of African power markets development.