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Africa's power sector needs more private sector involvement
![Africa's power sector needs more private sector involvement](https://biz-file.com/c/1505/281577-700x364.jpg?2)
These grids are electricity supply networks that use digital communications technology to analyse, detect and react to local changes. In addition to other power utility management objectives across the region, optimising asset utilisation and operational efficiency will be one of the major benefits of smart grid solutions.
"A number of emerging 'disruptors' are visible and will continue to disturb power landscapes in the region, including existing business models, methods and systems of operations, as well as the blend of players in the region's power and electricity subsectors," says Andrew Lane, Africa Energy & Resources leader at Deloitte.
The report notes that state-dominant players are no longer the only players. "If participants in the industry do not react in a market that is fast-evolving they run the risk of being left behind as consumer patterns change," says Lane.
Adjust business models
Shamal Sivasanker, Africa Infrastructure & Power leader at Deloitte, says players in the sector therefore need to change their approach, identify solutions and strategic partners and adjust their business models in order to navigate these challenges and to capture the outlined opportunities.
"New entrepreneurs are emerging all the time, helping evolve the industry business model from traditional state-dominated players to the emergence of smaller newer independent power producers," he says.
The role of the consumer in the power sector is changing - moving into to energy production, as companies look for mechanisms through technological advancements to create better growth advantages through cheaper and secure electricity supply.
New affordable technologies are seen as offering the best bets for 'disruption' to the sector. "The focus should be for early adopters to realise value from these technological developments in smart grids and smart metering."
The report finds that there are both funded and unfunded opportunities going forward in sub-Saharan Africa's power sector linked to addressing some of the immediate and more medium-term 'disruptors' that have been identified. This is one of the key aspects of the power sector in Africa - is its attractiveness as a market for the private sector.
Scenario planning
"Opportunities for firms exist to work with existing utilities in designing and implementing optimisation strategies for both local generation and distribution as well as in the various power pools within the region," says Sivasanker.
Governments and utilities will need to engage in scenario planning to get a view of what is really required for the success of the power industry going forward. And in order to modernise African utilities, countries will need to consider new innovations and adopt the necessary technologies such as smart metering and process automation systems to ensure sustainability of the industry.
"Focus on rural electrification and the use of renewable energy technologies (RETs) in stand-alone off-grid or mini-grid systems for reaching out to large sections of rural communities will unlock opportunities for investors, financiers, technology owners, builders, project managers and entrepreneurs in rural electrification projects," says Sivasanker.
Opportunities will become evident for firms in the renewable energy sector, including consulting, project management, research and development, as well as capacity building and skills training, linked to, for example, biofuels production, as the cost of renewable technologies starts to match that of conventional electricity sources.
View the Africa Power Trends Report.
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