Hydroelectric schemes outshine gas in sub-Saharan Africa's power generation pipeline

By Ajay Ubhi | 5 minute read

Despite calls from some governments for sub-Saharan Africa to use its natural gas resources and build more gas-to-power plants, it is hydroelectric power that will drive the biggest growth in electricity generation in the region over the next five years, according to analysis of?African Energy Live Data’s?project pipeline to 2027.

Despite recent bullish calls by Nigeria and some other governments to put natural gas at the centre of their electricity supply industry (ESI) developments, there has yet to be any surge in gas-to-power (GTP) activity, according to analysis of African Energy Live Data’s project pipeline to 2027. Instead, hydroelectric power (HEP) looks set to drive the biggest growth in generation across sub-Saharan Africa (SSA) in the next five years, according to the data.

By 2027, total installed generating capacity across SSA could reach 192GW, with some 49GW of projects in the pipeline. Over half of these projects are for HEP plants, which Live Data suggests will add 23GW between 2023 and 2027. Indeed, HEP is making its largest contribution to new capacity to the SSA grid over a five-year period since 2010.

Meanwhile, African Energy Live Data’s project pipeline shows only 5GW of new gas capacity is due to be commissioned by 2027. That is despite the push by many African governments to allow their natural gas resources to be considered as a transition fuel in global climate change talks, as seen at a succession of United Nations summits including COP26 in Glasgow, Scotland in November 2021 and the highly ‘transactional’ COP27 in Sharm El Sheikh, Egypt a year later. That process is expected to continue at COP28, scheduled for November in the United Arab Emirates.

Much of the GTP capacity recorded by Live Data began development before 2020, suggesting that – as yet – the strident calls for Africa to use natural gas as a transition fuel have not translated into firm projects. With lead-in times for natural gas schemes being two-to-five years, the continent’s gas capacity may not increase before 2027 as many expected, unless there is a flurry of project announcements during the rest of this year.

Many of the gas projects that are due to be commissioned between 2023 and 2027 have been on the drawing board for some time. They include Karpowership’s controversial 1.2GW of floating barges in Richard’s Bay, Coega and Saldanha Bay, as part of South Africa’s Risk Mitigation IPP Procurement Programme (RMIPPPP). In March, all three projects were once again blocked under environmental grounds by the Department of Forestry, Fisheries and the Environment (DFFE) (AE 480/16).

Live Data predicts West Africa will see the majority of the new gas generation, as Nigeria finally starts construction on the 215MW Kaduna liquefied natural gas (LNG), 252MW Omoku Gas Phase II and 378MW Egbema projects. But much more is possible, especially if the new government improves commercial terms for developers.

South Africa could yet drive bigger GTP developments

There could yet be a substantial upturn in gas-fired projects if – as some industry observers expect – big associated gas finds off Namibia and South Africa encourage more GTP projects and LNG import schemes.

LNG could be supplied to ports in South Africa – including Richards Bay, where gas could be fed into the Lilly pipeline – or imported into neighbouring Mozambique to be piped via the Republic of Mozambique Pipeline Investment Company (RompCo) and other existing and planned infrastructure. A final investment decision on the Matola LNG import terminal in Mozambique is expected soon.

According to a leading market analyst, among the major South African projects that could eventually move forward are the 3GW Richard’s Bay combined cycle gas turbine (CCGT) plant, which has been in a ‘pre-construction stage’ since 2019, but whose environmental and social impact assessment (Esia) was recently approved.

Also mooted is the repurposing of existing open cycle gas turbine (OCGT) plants to switch their fuel source from diesel to natural gas, and the conversion of two OCGT peaking plants to CCGT – the 745MW Gourikwa unit near Mossel Bay and 1,338MW Ankerlig plant that serves Cape Town – along with the 670MW Avon OCGT peaking plant.

Among other potential projects, Eskom has issued a request for information for the supply, delivery, off-loading and storage of natural gas to the coal-fired Komati power station. Other coal-fired power stations – including Camden, Grootvlei and Hendrina – would seem well placed for conversion and could be served by RompCo.

Regional profile

At a regional level, the largest overall capacity additions – 23GW – are expected in southern Africa. However, when South Africa is excluded, this falls to just 10GW. East Africa follows with 14.7GW, predominately from large HEP projects. West Africa is expected to add 9.2GW of mostly natural gas and HEP, while Central Africa could add 2.4GW, again largely from HEP.

South Africa is expected to add some 12.7GW of capacity, almost exclusively from solar, wind and battery procured through the fifth and sixth rounds of the Renewable Energy Independent Power Producers Procurement Programme (REIPPP), along with the 2018 Battery IPP Procurement Programme.

However, there is uncertainty around these schemes, given the delays in South Africa’s procurement efforts, particularly the RMIPPPP. The exclusion of wind projects from REIPPP6 has even raised questions about the long-term viability and direction of the REIPPP programme.

HEP expands its base

Almost a decade’s worth of HEP development is finally paying off, with 23GW to be commissioned over the next five to six years. According to African Energy’s analysis, some 77 hydropower projects are expected to be commissioned by 2027, of which 27 are in East Africa, followed by West and Central Africa with 17 each and Southern Africa with 16. The average project size is around 270MW.

Mega-projects dominate the HEP project pipeline, with 15.3GW of capacity expected from just eight schemes: the 5.15GW Grand Ethiopian Renaissance Dam (Gerd) and 2.2GW Koysha (Gilgel Gibe IV) projects in Ethiopia, the 1.2GW Zambia/Zimbabwe Batoka Gorge North and South projects on the Zambezi River, Angola’s 2.17GW Caculo Caba?a HEP, Tanzania’s 2.1GW Julius Nyerere dam, Nigeria’s 700MW Zungeru project and Uganda’s 600MW Karuma dam.

Given the scale of these projects, 76% of HEP pipeline is financed through public sources. Of the five countries with the largest amount of expected HEP, the average energy access rate was 47% in 2020, according to the World Bank Group. The critical question is how these countries will evacuate this capacity into inadequate grid infrastructure and supply populations with such low levels of demand and access. This is particularly pertinent in countries such as Ethiopia, Tanzania and Angola where the mega-projects will add gigawatts of capacity to the grid.

REIPPP drives renewables growth

According to the African Energy Live Data’s project pipeline, renewable power from solar, wind, geothermal, biomass and batteries will add a further 10.2GW by 2027, including 4.7GW of solar, 3.2GW of wind and 1.4GW of geothermal.

Much of the solar and wind capacity additions across SSA will come from South Africa’s REIPPP5 and 6, although (as discussed above) there is uncertainty around the initial plan for round six to procure 3.2GW of wind and 1GW of solar.

While HEP is expected to add the highest amount of generating capacity, the growing popularity of solar is seen through the number of projects expected online by 2027. Across SSA, 104 solar projects are expected to be commissioned, largely during 2023 and 2024. More will undoubtedly emerge for subsequent years, but the shorter lead times involved in solar projects means many developments that could come online by 2027 have not been announced.

Some 33 solar projects are expected to be commissioned in West Africa – across almost every country in the region with the notable exception of Nigeria.

With 31 projects due by 2027, wind capacity is not as prolific as solar, and is contained largely in South Africa, with an estimated 1.6GW coming from REIPPP5. Outside of southern Africa, the West and East African regions will see large amounts of wind power from the 225MW Ayitepa and 200MW Konikablo projects in Ghana and the 300MW Marsabit scheme in Kenya.

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