Despite South Africa’s achievements in its renewable-energy programme to date, power transmission and distribution continue to warrant improvement if electricity supply is to be stable in the country, says professional services firm KPMG infrastructure advisory head De Buys Scott.
“Power generation in South Africa is in a very good position: the plans are well known and mostly well thought through, and they are very positively perceived from a global viewpoint in terms of how they are being implemented.”
He points out that the baseload programme, as well as cogeneration and coal-based power generation, is making progress in the local market. Moreover, gas is a key area for potential growth in the electricity generation industry in the near future. Scott predicts that gas will become a significant commodity in the market in the next few years, and notes that the Gas Utilisation Masterplan draft is being discussed and finalised by the relevant authorities.
Scott further says nuclear energy as an area of much interest in the industry, despite industry being uncertain of the form the procurement of nuclear will follow. How- ever, he points out that it is clear that South Africa’s executives have decided that nuclear must be explored.
He notes that, while nuclear is a source of power that lasts much longer than other sources, it also costs significantly more than other sources, adding that this is a major concern for South Africa because affordability in the current market is the most important factor in power supply.
Moreover, Scott says the transmission of power generated in the country requires attention, as not much investment has gone into expanding transmission networks to support the country’s increased generation capacity.
“We are already seeing congestion problems in parts of the country where renew- able energy is being produced. The old energy transmission system can cope with only so much electricity generation being fed into it, and I think a big challenge for the country for about the next five years is going to be the upgrading and expansion of the national grid.”
Scott states that electricity distribution – the responsibility of which lies with the metros – will become a big challenge for the energy supply chain. He believes this aspect also requires increased investment to continue the maintenance in order to sustain functioning efficiently.
“Additional forms of independent power producers and better transmission and distribution systems need to become focus areas in the energy sector if it is to continue improving, and increasing infrastructure capacity and improving the skills of the workforce are areas of key concern,” he states.
KPMG is a platinum sponsor at this year’s African Utility Week and Scott sees the event as an important platform for facilitating dialogue among key players in the industry.
KPMG is particularly looking forward to the event’s CEO forum discussion, as the company is preparing to present Snapshot 2020, which will provide insights into the progress that KPMG predicts for the power supply industry by 2020. KPMG has a very positive outlook for the industry and intends to put forward this message throughout African Utility Week.
“I think too often we tend to focus on the immediate problems that we are facing in the country and . . . [in the] industry, and we don’t celebrate the things we have achieved. Power, energy and utilities are industries that have made vast improvements, and in the short to medium term, generation capacity in South Africa is going to be a very different story from what we are seeing today,” Scott concludes.