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Absa Insights 2021

Energy is the gatekeeper to a prosperous future

18 February 2021 8:20 AM

Tackling Africa’s energy crisis starts with policymakers and evidence shows that they’re not moving fast enough.

Absa Insights is a portal where the bank’s sector experts share essential learnings and new developments with its clients and other businesses. The world is changing; so this year, Absa has introduced a series of discussions featuring high-level thinking around Consumer Goods and Services, Mining and Energy and Infrastructure. Bookmark Absa Insights, where the bank shares insights from discussions designed to help you navigate the ever-shifting trends that are shaping the economy.

Listen to the audio below (or scroll down for a summary of it).

South Africa is lagging far behind in the transition to renewable energy. Sadly, tackling Africa’s energy crisis starts with policymakers and evidence shows that they’re not moving fast enough to secure economic prosperity for the African people.

“Energy is the key ingredient for economic development,” says Ted Blom, Power and Mining Expert and Partner at Mining and Energy Advisors. Having traversed the African continent for over 30 years, Blom believes that the African people now see energy as “the gatekeeper to a very prosperous future.

Considering this – he foresees a rise in competition in the medium term, which will inevitably lead to affordable energy prices, which will undoubtedly be welcomed by the African population.

The role of policymakers

“Unfortunately, you need things to go wrong first before they come right,” says Bhavtik Vallabhjee, Head of Power, Utilities and Infrastructure at Absa Corporate and Investment Banking.

In light of South Africa’s power struggle – Vallabhjee believes that the South African government’s Integrated Resource Plan is a step in the right direction. “There’s a very clear shift there where we are clearly moving away from over-reliance on coal to diversifying our energy mix.”

The obsolescence argument: Where does that leave the future of energy provision on the continent?

Eskom’s coal-fired power generation fleet is old, inefficient and expensive to run. Couple that with the fact that its transmission grids were designed for centralised power generation – if Eskom fails to install generation plants at load centres, it will continue to expose itself to significant power losses during long transmission distances. To avoid obsolescence, Vallabhjee advises that Eskom considers the redesign of its centralised transmission grids.

For more detail, watch the video featuring The Money Show’s Bruce Whitfield in discussion with Bhavtik Vallabhjee (Head: Power, Utilities and Infrastructure, Absa Corporate and Investment Banking), Ted Blom (Power and Mining Expert and Partner, Mining and Energy Advisors) and Maximilian Niederehe (Business and Solutions Development Manager, Siemens Energy) on the impact of battery energy storage on the Africa’s power sector.

18 February 2021 8:20 AM

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