Billions at Play book cover

Billions at Play book cover

Electricity / Energy / Oil

Billions at Play: The Future of African Energy and Doing Deals

A book review by Nicholas Newman

Over the years there have been many books about some of the failures, successes and near misses in the development of Africa’s energy sector. This book by NJ Ayek looks at some of the reasons behind Africa’s energy sector evolution. This book is available at Amazon, on Kindle and in Hardback.

Like many previous writers have said bringing reliable, affordable and sustainable energy to the region will have a massive game changing effect on the economic development of the area. For example, it looks at how, if the region’s economies overcame the massive skills gap, capital shortages, governance issues and regulatory obstacles, then we would see a much more sustained and successful performance in the continents energy sector.

The book provides an interesting range of case studies. As an example, it looks at how exploitation of the regions many marginal oil and gas assets could have a substantial impact on the region. For instance, the string of new gas finds that will be exploited along the coast of Mozambique, which could turn the country into a major source of cheap affordable electricity for not only for Mozambiquen customer, but also for power hungry and regional economic giant South Africa.

However, further expansion of Africa’s oil and gas assets, will depend as much on any future projects being bankable given the low price of energy today. But also such African projects, will be sufficiently competitive in terms of American shale oil and gas production. In addition, development of many petroleum assets assets is in doubt given the progress being made by rival energy technologies such as wind and solar, plus energy storage, which is increasingly competitive with fossil fuel energy solutions.

America is not always the answer

Although I am impressed with the depth and scope of the author’s knowledge, expertise and experience, he is clearly a fan of America coming to the rescue of Africa’s energy sector, when in fact, although they have a part to play. Their technological expertise and investment abilities are not always suitable for the Africa’s energy problems.

One thing is clear, there is not one single African energy problem, there are a series of often complex multifaceted problems. For example some countries are rich in oil and gas, such as Nigeria and Angola, whilst Ethiopia and the Congo are rich in hydro resources, whilst South Africa enjoys significant solar and wind resources. The trouble for many countries, it is not a problem of finding the energy assets, but finding bankable projects that are sufficiently attractive to investors to invest in.

For instance, creating energy solutions for industrial energy intensive complexes and cities differs greatly from meeting the energy needs of remote farms or mines distant from the energy grid.

As South Africa has realised a range of different energy solutions is needed, including wind, solar, pumped storage hydro, hydro generation, piped natural gas and or LNG.

 That is why Africa is increasingly turning to other, more often capable players elsewhere including Europe, China, Japan, Russia and India, in seeking to develop business opportunities in the region which will be not only profit investors, but also beneficial for the continents big and small customers.

Overall a usefull read about the issues faced in investing and operating in Africa’s energy sector.

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