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Power Futures Lab Newsletter: Feb 2021

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GEARING UP FOR THE FUTURE
The COVID-19 pandemic has reinforced the enduring importance of addressing sub-Saharan Africa's energy challenges: increasing energy access, ensuring energy security and affordability, and managing the energy transition. Vaccination programmes critically depend on reliably-powered cold chains, a massive challenge considering the continent's electrification backlogs. Prospects for economic recovery are hampered by electricity supply constraints, while new technologies are disrupting traditional utility business models and posing new regulatory challenges.

This disruptive moment nevertheless offers an important opportunity for sub-Saharan Africa. Renewable energy investments continued to grow, in both capacity and investment volumes, at the same time that most commodity markets – most notably fossil fuels – were crashing. We are also seeing a steady and accelerating exit of capital from fossil-fuel based investments, not only due to concerns about climate change but also because of the increasingly attractive economics of renewables. Solar PV and wind technologies in particular are now least-cost options for new power capacity in most markets and can be built quickly and incrementally – but also require flexible balancing capacity in the form of for example storage, gas or hydropower. 

Ensuring that sub-Saharan Africa reaps the benefits of this moment requires a reckoning with the continued importance of sector fundamentals: improving the financial viability and technical performance of power utilities; strengthening the governance of the sector through for example capable and independent regulatory authorities and competitive procurement programmes; and implementing market and regulatory reforms to accelerate investment flows. 

UCT's Power Futures Lab remains committed to creating the knowledge and capabilities needed to accelerate power investment, improve sector performance and governance, and extend equitable access in sub-Saharan Africa through our research, training and advocacy work. In this newsletter, we provide details on new research outputs, introduce you to a new cohort of PhD students, and share how we are supporting global and local initiatives.  

Sincerely
Prof. Anton Eberhard

We are excited to offer the first of our live online executive education short courses during the weeks of 17 – 28 May 2021. The "Finance, contracts and risk mitigation for private power investment in Africa" course will again be anchored by the venerable Daniel Gross, who will be supported by a host of African practitioner-experts from the legal, financial, engineering and environmental management professions. The course will consist of live online lectures in the afternoons (incl. sessions on basic financial modelling), supplemented by pre-recorded video lectures, group and individual exercises, and key readings.

A detailed programme can be downloaded here

For more information, including costs and registration details, please visit the course website or contact Fazlin Harribi
 

Download Course Programme
All of Power Futures Lab's executive education short courses are set to be delivered online this year over two-week periods. More details on each course, including registration details and costs, can be found by clicking on the relevant link below:
For more information, please contact Fazlin Harribi. 

Private power investors continue to play a critical role in sub-Saharan Africa (SSA). We review 2020's key power investment trends in the region, focusing specifically on utility-scale independent power projects (IPPs)  and Chinese funded projects. Our analysis shows that solar PV continues to dominate new private power investments, driven by its cost-competitiveness, relative simplicity, and modularity. We also discuss SSA governments' stance on renegotiating existing IPP power purchase agreements, symptomatic of the region's lack of robust power systems planning and procurement frameworks. While 2020 was not particularly rosy, there were a few things to cheer about: several countries saw their first IPPs come online, while others ran their first renewable energy auctions. African DFIs are also leading the charge to backstop IPPs in the region and the burgeoning commercial and industrial renewable energy sector is a welcome and timely development. These trends and more are explored in detail in the short report, available for download here.  

Towards responsive energy governance: Lessons from a holistic analysis of energy access in Uganda and Zambia
Susann Stritzke, Philipp A. Trotter & Peter Twesigye

Counteracting market concentration in renewable energy auctions: Lessons learned from South Africa
Wikus Kruger, Ivan Nygaard & Lena Kitzing

Renewable Energy Auctions in South Africa
Anna Filipova, Sarah Wewege, Emma Unite, Sivuyisiwe Kuse, Wikus Kruger

Renewable energy auctions in Zambia
Wikus Kruger, Anton Eberhard

Renewable energy auctions in Ethiopia
Wikus Kruger, Fezeka Stuurman, Olakunle Alao

Renewable energy auctions in Namibia
Wikus Kruger, Olakunle Alao, Anton Eberhard

All Power Futures Lab publications can be downloaded from our website.

Prof. Anton Eberhard has been invited to join the Africa-Europe Strategic Task Force on Energy. Supported by the Mo Ibrahim Foundation, the Task Force seeks to open the space for fresh policy thinking, strategic foresight and a holistic rethink of critical sectors for multilateral cooperation. 

Prof. Eberhard is also a member of the Global Commission to End Energy Poverty. The 30 person Commission includes such luminaries as Dr Akinwumi Adesina, President of the African Development Bank,  Dr Vera Songwe, head of the UN’s Economic Commission for Africa and Professor Ernest Moniz of MIT and former US Secretary of Energy. The Commission issued its first report in December 2020.

Power Futures Lab is pleased to welcome three new full-time PhD candidates starting in 2021: Christine Juta, Naa Adjekai Adjei and Bukelwa Nzimande. The candidates' research will focus on Chinese investments in the African power sector, as well as distributed energy and power market transitions in Africa. 
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