North Africa is running out of electricity as calls made for power reforms
Growing populations and the rapid industrial and economic expansion in North Africa has driven a sharp increase in electricity consumption in the region and it could be creating a big problem.
New research from business intelligence service MEED shows that governments across North Africa and the Middle East. Countries such as Egypt, Libya and Algeria will all require significant reserves of additional capacity by 2020 so there can be no doubt that a challenge exists in trying to deal with the combined effects of recent developments in the region’s power sector.
According to the MENA Power 2017 report, governments in the region have targeted increasing diversification in their power sectors to improve energy security and reduce the reliance on gas imports. Another key shift is the move towards increased private investment and privatisation in the generation of electricity, as governments cut budgets in response to the lower oil price. Egypt is one such government and is looking to significantly restructure and privatise large swathes of its electricity market.
The move towards integrating renewable energy into development programmes has seen a sharp increase in the region, with the report stating that more than 60GW of renewable energy projects are being planned to meet future demand for electricity across the Middle East and North Africa. This has been facilitated by the sharp drop in photovoltaic (PV) solar technology costs, which have gone down by 80 per cent since 2007. In addition to renewables, state utilities are also moving forward with plans for alternative energy, from nuclear power to clean coal.
The largest requirement for new power reserves will be in Egypt, where an estimated 27,985MW of new capacity is needed as a result of its rapidly growing population and economic expansion. Libya, on the other hand, has the most acute need for newly built units and power infrastructure on account of age or, in some areas, because it has been damaged by fighting.
Morocco and Tunisia are two other countries in North Africa which face a challenge in trying to generate enough electricity over the coming years, and reserve margins will be put under hotter pressure, with nearly all states across the region recording an increase in peak demand in 2015. Libya was the only country that recorded a drop in peak demand in 2015, but it is expected to grow at an average of 5 per cent a year or higher until 2022. With a minimum 15 per cent recommended reserve margin (which is the amount of unused capacity at peak load as a percentage of the entire capacity) the region as a whole is in a race to keep ahead of peak demand growth and maintain sufficient electrical reserves.
The other additional challenge comes in ensuring that consumption, where possible, is reduced. The report said: “In addition to utilising renewable energy to meet growing demand for power, the region’s utilities are looking at ways to improve energy efficiency and reduce consumption.
“Efforts are being made to improve efficiency on both the supply and demand side. Curbing electricity consumption and reducing feedstock usage will help preserve gas reserves and also reduce pressure on government finances, which in many cases have been severely reduced by lower oil prices.”
On the supply side, utilities are beginning to invest significant capital into improving and upgrading existing power infrastructure. Egypt, in particular, is pushing ahead with schemes to upgrade plants to combined-cycle facilities, boosting capacity while using less fuel. There is now a growing trend to choose combined-cycle configurations for new capacity so that the most efficient technology is in place.
It seems that all of these efforts and more will be needed to ensure that enough electrical reserves exist throughout the region to ensure that its power infrastructure remains stable.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.