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Algeria hosts key energy summit amidst shifting dynamics

Algeria welcomed envoys from energy-rich nations to a significant summit aimed at addressing pressing challenges and exploring new avenues for collaboration. As leaders from 13 countries convened in the Algerian capital of Algiers for the Gas Exporting Countries Forum (GECF), the spotlight fell on Algeria’s ambition to position itself as a critical natural gas supplier, particularly for European nations seeking to diversify their energy sources and reduce reliance on Russia.

During the three-day summit, which includes prominent participants such as Russia, Iran, Qatar, and Venezuela, discussions revolved around the evolving dynamics of the energy market. With renewable energy sources gaining traction and demand for oil and gas experiencing fluctuations, the forum provided a platform for coordination on investments, enhancing ties with consumer countries, and bolstering production capacity.

Ahmed Dkhinissa, an analyst and professor at the University of Algiers, emphasized the significance of the GECF in fostering global cooperation. He stressed the need for consensus among member nations, highlighting the importance of addressing various issues ranging from climate concerns to geopolitical tensions.

Meanwhile, Noureddine Legheliel, a financial analyst, offered insights into the ongoing debate surrounding renewable energies. While acknowledging their potential, Legheliel emphasized that fossil fuels, including natural gas, would continue to play a significant role in the energy mix for decades to come.

Algeria’s aspirations to become a leading gas supplier to Europe have garnered attention against the backdrop of efforts by European countries to reduce dependency on Russian energy. As the continent’s second-largest pipeline supplier of gas, Algeria has positioned itself as a reliable partner for countries like Spain and Italy. Premier Giorgia Meloni’s visit to Algeria last year underscored the strengthening ties between the two nations.

Highlighting Algeria’s growing prominence as an energy supplier, officials at the summit showcased the country’s commitment to providing secure and dependable energy resources. Recent agreements, including a deal with Germany’s VNG by Algeria’s state-owned energy company Sonatrach, underscore Algeria’s strategic significance in the global energy market.

However, challenges persist for Algeria’s energy sector. Despite ambitious plans to expand production, the country faces hurdles in meeting its commitments to European consumers. Infrastructure constraints, sluggish demand, and intensified competition from other gas-producing nations pose significant obstacles to Algeria’s aspirations.

Source: AfricaNews, 1st March 2024


Oil rises as investors weigh Red Sea attacks, US rate cut outlook

By Mohi Narayan
February 21, 20248:40 AM GMT+1Updated an hour ago

NEW DELHI, Feb 21 (Reuters) – Oil prices regained some ground in Asian trade on Wednesday amid concerns over attacks on shipping in the Red Sea and growing expectations that cuts to U.S. interest rates will take longer than thought.
Brent crude futures rose 24 cents or 0.3% to $82.58 a barrel by 0721 GMT, while U.S. West Texas Intermediate crude futures (WTI) were up 21 cents or 0.3% at $77.25.

The Brent and WTI contracts fell 1.5% and 1.4%, respectively, from near three-week highs on Tuesday as the premium for prompt U.S. crude futures to the second-month contract more than doubled to $1.71 a barrel – its widest level in roughly four months.


Nigeria’s new Dangote refinery to export first fuel cargoes

A view of the newly-commissioned Dangote Petroleum refinery is pictured in Ibeju-Lekki, Lagos, Nigeria May 22, 2023. REUTERS/Temilade Adelaja/File Photo Purchase Licensing Rights

LONDON/BRUSSELS, Feb 14 (Reuters) – Nigeria’s Dangote oil refinery has issued tenders to sell two fuel cargoes for export, the first from the newly commissioned refinery, trading sources with knowledge of the matter told Reuters.
The refinery, Africa’s largest with a nameplate capacity of 650,000 barrels per day, was built on a peninsula on the outskirts of the commercial capital Lagos by the continent’s richest man Aliko Dangote.
Nigeria has for years relied on expensive imports for nearly all the fuel it consumes but the $20 billion refinery is set to turn it into a net exporter of fuel to other West African countries, in a huge potential shift of power and profit dynamics in the industry.
Sources told Reuters last week that the refinery was preparing to deliver its first fuel cargoes to the domestic market within weeks.
The two fuels on offer are typical products of running light sweet crude through a crude distillation unit (CDU) in a refinery without further upgrading capacity. It is expected to take months for upgrading units to be brought online, experts have said.
The refiner began buying crude in December last year and Nigeria’s state-owned oil firm NNPC Ltd has been the main supplier. Dangote has also purchased some U.S. oil and is expected to receive 2 million barrels of U.S. WTI Midland in early March, according to LSEG and Kpler ship tracking.
Reporting by Ahmad Ghaddar and Robert Harvey in London, Julia Payne in Brussels. Additional reporting by MacDonald Dzirutwe in Lagos and Arathy Somasekhar Editing by Mark Potter, Kirsten Donovan

Source: Reuters, 14th February 2024


What does 2024 have in store for renewables in Africa?

February 1st, 2024 By Ben Payton Image : rufous / Adobe Stock

The private sector is playing an ever increasing role, but grid capacity constraints and macroeconomic headwinds pose key challenges
February 1st, 2024
At the beginning of 2024 Africa has come to a key juncture in its renewable energy rollout.

The potential of technologies such as wind and solar energy to help close the continent’s energy access gap is now beyond doubt. Across Africa, however, there are multiple challenges in accelerating the speed and scale of the drive for renewables.

Roughly half of Africa’s population, around 600m people, lacks access to electricity; millions more endure an unreliable or intermittent supply.

Solar, in particular, has a key role in bringing more reliable access. Most of Africa enjoys excellent conditions for solar generation; and solar is well-suited for both utility-scale projects and smaller schemes designed to serve homes and businesses in remote areas.

Last year’s COP28 climate conference, along with the Africa Climate Summit held in Nairobi last September, reaffirmed the importance of renewables on the continent.

But whether 2024 will see donors and development finance institutions (DFIs) turn commitments into action remains to be seen. The International Energy Agency (IEA) estimates that $28bn in concessional capital is needed each year up to 2030 to mobilise $90bn in private sector investment – a more than tenfold increase from the present level.

Technologies mature

Hydropower, which has played a key role in the power sectors of many African countries for decades, remains the leading source of renewable energy on the continent. However, it is solar that is increasingly emerging as the main source of new capacity.

According to the African Solar Industry Association (AFSIA), the continent installed a record 3.7 GW in 2023, representing year-on-year growth of 19%. AFSIA notes that utility-scale solar projects are less common in Africa than in the United States, Europe or China. By contrast, it says 65% of the capacity added last year came from commercial and industrial projects – a large share of which are in South Africa.

“In [the] absence of reliable utility companies and grids supplying the required electricity, African companies and businesses finally have found an alternative with solar and storage thanks to plummeting prices of both key components,” AFSIA said in a report.

Meanwhile, cash-strapped utilities are increasingly looking to the private sector to supply electricity from large-scale wind and solar projects to the grid. In South Africa, a bidding round for independent power producer (IPP) projects, which will conclude in April, will be crucial for efforts to end the country’s disastrous power shortages.

Zambia is another country where the government is turning to the private sector, as it looks to extend electricity access to 60% of its population by 2030. Reforms introduced by President Hakainde Hichilema have facilitated private investment in the power market, with a focus on streamlining regulator approvals.

“Most renewable energy projects will continue to be financed at an increasing rate by the private sector in Zambia,” says Kusobile Kamwambi, head of the country’s Presidential Delivery Unit.

But one challenge, likely to become ever more evident in 2024, is that electricity grids in many African countries are struggling to absorb the power supplied by renewables. In Zambia, for example, ZESCO has set a cap of 50 MW on IPP projects – a limit that makes investment less attractive for some players in the sector.

Grids and batteries

The electricity shortages in countries such as South Africa highlight the importance of upgrading grid infrastructure at both the national and regional levels. Holger Rothenbusch, managing director and head of infrastructure and climate at British International Investment, the UK’s DFI, says that investment in cross-border transmission infrastructure will increase. He notes that there are “many exciting prospects” in decentralised renewable energy systems, which enable renewable generation in areas where grid access remains difficult.

“We are starting to see the potential of mini-grids to bring power to countries such as DRC and Burundi with historically low rates of access,” he says.
“Projects are being delivered with attractive financing models such as grants and private capital to mitigate offtake risk.”

Source: African Business , 1st February 2024


AfDB wants Kenya, Tanzania electricity deals finalised

A police officer patrols substation of Kenya Electricity Transmission Company Limited in Suswa on August 4, 2017. PHOTO | AYUB MUIYURO | NMG

The African Development Bank (AfDB) wants Kenya and Tanzania to speed up the signing of three key agreements to pave the way for the exchange of excess electricity between the two countries via a Ksh43 billion ($309.26 million) line.

The three are a wheeling agreement between Tanzania Electric Supply Company (Tanesco) and Kenya Electricity Transmission Company Limited, a power exchange deal between Kenya Power and Tanesco and a tripartite deal for the maintenance of the interconnected grid.

The two neighbours were last month expected to complete the 507.5-kilometre line that runs from the Isinya substation to Arusha through Namanga. The line will have an intended transfer capacity of 2,000 megawatts.

Read: Kenya, Tanzania power line to be launched this year

AfDB— a major financier of the project— in its latest review said that the three deals are key to rolling out the regional power trade meant to boost electricity supply and cut reliance on the dirty and costly thermal power in the two countries.

“It is of significant importance that the afore-mentioned agreements are concluded as soon as possible to coincide with the completion and commissioning of the cross-border electricity infrastructure to pave the way for regional power trade,” AfDB says in the review.

Wheeling is the transfer of electricity from an electrical grid to an electrical load outside the grid boundaries through the use of existing distribution or transmission networks.

Completion of the 400 kilovolts line had been plunged into uncertainty as Ketraco delayed completing its share of the line due to hitches in compensating and resettling families along the project area.

The line whose construction started in 2015 will allow cross-border exchanges of cheap and cleaner surplus power from neighbouring countries in the Eastern Africa Power Pool countries.

Nations in the Eastern Africa Power Pool are Kenya, Tanzania, Uganda, the Republic of Sudan, South Sudan, Burundi, the Democratic Republic of Congo, Djibouti, Ethiopia, Egypt, Somalia, Rwanda and Libya.

Kenya currently imports cheap hydroelectricity from Ethiopia and Uganda and the supplies have been critical in helping avoid power rationing especially last year when hydro-generation hit record lows on prolonged drought.

Read: Kenya electricity imports from Ethiopia halve on drought

Tanzania has recently been forced to ration power in some parts due to low hydro generation, highlighting the critical role of the line to the neighbouring country. The line will also allow Tanzania to tap cheap hydroelectricity from Ethiopia.

Ketraco had delayed the completion of the line on the Kenyan side which spans about 93 kilometres between Isinya substation and the border town of Namanga.

Source: The East African, 31st January 2024