A gas plant in Ghana. In Ghana, Nigeria and Mozambique, utilisation of
local gas resources has yielded tariffs of $0.07 to $0.09 per kW/h. All
three countries will benefit from the US project. FILE PHOTO | AFP
Kenya and Tanzania are among nine African countries set to
benefit from an ambitious US-led initiative to invest in gas-powered
power plants.
The Gas Roadmap for sub-Saharan Africa,
launched in June at the World Gas Conference in Washington, DC, by the
US Agency for International Development's Power Africa co-ordinator, is
an initiative that seeks to add some 16,000MW of gas-fired power in nine
countries by 2030.
The roadmap is built on the fact
that based on known reserves, there is potential for approximately 400GW
of gas-generated power in sub-Saharan Africa.
The gas
roadmap is part of the Power Africa Initiative launched in 2016, which
the US is implementing and whose goal is adding 30,000MW of new
generation capacity and 60 million new connections by 2030.
According
to the roadmap, US companies supported by Washington will invest $175
billion in gas power projects in Kenya, Tanzania, Côte d’Ivoire, Ghana,
Nigeria, Senegal, Angola, Mozambique and South Africa.
The
countries were selected because of their relatively large populations,
high gross domestic product and either because they have local gas
resources (in operation or under development) or are planning liquefied
natural gas (LNG) import projects.
The US project has potential of generating at least $5 billion annually by exporting LNG into the region by 2030.
“A
key ingredient in Africa’s energy mix is, and will continue to be,
clean natural gas. Natural gas and LNG projects have the potential to
generate essential electricity quickly and at reasonable prices,” wrote
Rick Perry, US Secretary of Energy, in the "Power Africa Gas Roadmap to
2030," strategy report.
He added that the gas roadmap
underscores how the US can help advance gas sector investment in Africa
as well as how the export of LNG and related innovations can spur
gas-to-power development across the continent.
Gas
resources have been discovered in 14 countries in sub-Saharan Africa,
with Nigeria accounting for 81 per cent of the proven reserves.
It
is estimated that several undeveloped fields in Tanzania and Mozambique
account for 62 per cent of total contingent resources while other
African countries without reserves are developing infrastructure for
importation of natural gas to support the demand for power generation.
Tanzania,
which has discovered recoverable natural gas estimated at 57 trillion
cubic feet, envisages a larger role for natural gas in the future energy
mix, with gas-fired power plant capacity anticipated to grow from
1,501MW in 2015 to 4,915 MW in 2040, according to the country’s power
masterplan.
In April, the government inaugurated a $345
million natural gas-powered plant on the outskirts of the capital Dar
es Salaam, which has a capacity to generate 240MW, and embarked on two
other projects with a 600MW capacity.
According to the
roadmap, the US government interventions will focus on addressing the
constraints related to gas projects in sub-Saharan Africa.
These
include the availability of gas (both from a source as well as delivery
method perspective), financial strength of off-takers of power and gas,
lag in downstream infrastructure, such as power transmission and
distribution capacity and the various markets’ ability to absorb power
and gas.
“By focusing on decreasing fuel costs, development costs and the cost of capital, the best possible tariffs for the end user can be realised,” states the roadmap.
Apart from being clean energy, gas is highly competitive as a source of power with studies showing that prices for gas-to-power could run as low as $0.10 per kilowatt hour (kWh) for integrated LNG projects and $0.15 per kWh for small-scale and distributed power projects.
Both projected prices are lower than the $0.18 per kWh average cost of generation in sub-Saharan Africa.
“By focusing on decreasing fuel costs, development costs and the cost of capital, the best possible tariffs for the end user can be realised,” states the roadmap.
Apart from being clean energy, gas is highly competitive as a source of power with studies showing that prices for gas-to-power could run as low as $0.10 per kilowatt hour (kWh) for integrated LNG projects and $0.15 per kWh for small-scale and distributed power projects.
Both projected prices are lower than the $0.18 per kWh average cost of generation in sub-Saharan Africa.
In Ghana, Nigeria and Mozambique, utilisation of local gas resources have yielded tariffs of $0.07 to $0.09 per kW/h.
The roadmap reckons that with the drop in global prices, the use of gas has become more attractive and could replace more expensive fuel sources, thus reducing the cost of energy.
With lower prices, businesses can thrive and more people can have access to electricity.
The roadmap reckons that with the drop in global prices, the use of gas has become more attractive and could replace more expensive fuel sources, thus reducing the cost of energy.
With lower prices, businesses can thrive and more people can have access to electricity.
In
addition, carbon emissions from natural gas usage is much lower than
emissions from coal and oil-based fuels like kerosene, diesel, gasoline
and heating oil, as well as burning biomass for cooking.
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