Global power demand is outstripping supply, and this demand is
expected to rise by two-thirds between 2003 and 2030, meaning that
global electricity sector investment needs during this period are
estimated at $10-trillion - three times higher than investment in
the electricity sector during the last 30 years.
The sixth annual PricewaterhouseCoopers report, 'Supply Essentials: Utilities Global Survey 2004', which was released in Johannesburg yesterday, found that blackouts have prompted security of supply to become the top concern for utilities around the world.
The report, which reflects the views of 148 leading companies across 47 countries in Europe, the Americas, Asia Pacific, Africa and the Middle East, states that securing power supply has risen from the fourth concern 12 months ago to the highest-ranking issue of 2004.
It was also found that the dramatic change in the global utilities landscape is a direct result of increasing difficulties in the balancing act of power generation, demand and transmission.
“Security of supply is a global concern. If blackouts are not to become a regular feature of the future, major investment in the sector is required. Across the world we see ageing infrastructure coupled with increasing demands on generation and transmission capacity,” commented PricewaterhoueCoopers global utilities leader Manfred Wiegand.
“A consistent and stable regulatory environment is required to make the sector more attractive to investors. Capital will only come with good rates of return.”
Wiegand also pointed out that the global nature of capital markets will add new momentum to the convergence of utility market structures, adding that if underinvestment is not tackled, many territories will face a future of blackouts.
The survey uncovered a global trend of increasing reliance on gas, as well as a renewed focus on regulation.
Commenting on the Southern African perspective, PricewaterhoueCoopers Southern Africa deputy CEO Stanley Subramoney said that a period of progress and growth set the scene for the region's utilities in 2003, with governments operating with increased cooperation. Domestic merger and acquisition activity is likely to increase in the short term, and international investment should intensify over the coming years, he pointed out.
Subramoney pointed out that harnessing the abundance of gas in the western corridor should open up new opportunities and serve to deal with the growing realisation that, in the near future, electricity demand projections will exceed generation capacity.
The introduction of the New Partnership for Africa's Development (Nepad) energy plan, he noted, has great potential to boost the region's overall economy. It will develop an interconnected power pool of six export corridors that would share energy needs and develop supply options across the continent. Connecting Africa to the Middle East and Europe, for purposes of selling excess electricity, could be achievable in about 2030.
Subramoney further argued that the planned privatisation of South Africa's Eskom would open new possibilities, and, across the Southern African region, privatisations would encourage greater competition. However, South Africa's proposed pebble-bed modular reactor is not anticipated to be ready in time for the region's next generation capacity expansion, despite government's support for nuclear power.
Meanwhile, it is expected that hydropower will be the future of electricity in Southern Africa, as the Congo river is developed, coupled with a huge potential from gas coming predominantly from the West Coast. Subramoney said the Congo hydropower project would take another five to seven years to come on stream, and the entire venture is realisable in phases.
The report stated that as the African continent is faced with the enormous challenge of integrating power systems, partnerships and joint ventures with numerous African utilities will be forged.
The sixth annual PricewaterhouseCoopers report, 'Supply Essentials: Utilities Global Survey 2004', which was released in Johannesburg yesterday, found that blackouts have prompted security of supply to become the top concern for utilities around the world.
The report, which reflects the views of 148 leading companies across 47 countries in Europe, the Americas, Asia Pacific, Africa and the Middle East, states that securing power supply has risen from the fourth concern 12 months ago to the highest-ranking issue of 2004.
It was also found that the dramatic change in the global utilities landscape is a direct result of increasing difficulties in the balancing act of power generation, demand and transmission.
“Security of supply is a global concern. If blackouts are not to become a regular feature of the future, major investment in the sector is required. Across the world we see ageing infrastructure coupled with increasing demands on generation and transmission capacity,” commented PricewaterhoueCoopers global utilities leader Manfred Wiegand.
“A consistent and stable regulatory environment is required to make the sector more attractive to investors. Capital will only come with good rates of return.”
Wiegand also pointed out that the global nature of capital markets will add new momentum to the convergence of utility market structures, adding that if underinvestment is not tackled, many territories will face a future of blackouts.
The survey uncovered a global trend of increasing reliance on gas, as well as a renewed focus on regulation.
Commenting on the Southern African perspective, PricewaterhoueCoopers Southern Africa deputy CEO Stanley Subramoney said that a period of progress and growth set the scene for the region's utilities in 2003, with governments operating with increased cooperation. Domestic merger and acquisition activity is likely to increase in the short term, and international investment should intensify over the coming years, he pointed out.
Subramoney pointed out that harnessing the abundance of gas in the western corridor should open up new opportunities and serve to deal with the growing realisation that, in the near future, electricity demand projections will exceed generation capacity.
The introduction of the New Partnership for Africa's Development (Nepad) energy plan, he noted, has great potential to boost the region's overall economy. It will develop an interconnected power pool of six export corridors that would share energy needs and develop supply options across the continent. Connecting Africa to the Middle East and Europe, for purposes of selling excess electricity, could be achievable in about 2030.
Subramoney further argued that the planned privatisation of South Africa's Eskom would open new possibilities, and, across the Southern African region, privatisations would encourage greater competition. However, South Africa's proposed pebble-bed modular reactor is not anticipated to be ready in time for the region's next generation capacity expansion, despite government's support for nuclear power.
Meanwhile, it is expected that hydropower will be the future of electricity in Southern Africa, as the Congo river is developed, coupled with a huge potential from gas coming predominantly from the West Coast. Subramoney said the Congo hydropower project would take another five to seven years to come on stream, and the entire venture is realisable in phases.
The report stated that as the African continent is faced with the enormous challenge of integrating power systems, partnerships and joint ventures with numerous African utilities will be forged.
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