Botswana to Push Power Infrastructure Investment As Power Imports Phase Out, Says Frost & Sullivan
- Rising Demand, Paralleled by Expensive Power Imports, Set to Boost Development of Botswana's Domestic Electricity Industry
CAPE TOWN, South Africa, April 19, 2012 /PRNewswire/ -- Electricity demand in Botswana is projected to grow at a compound annual growth rate (CAGR) of 4.6 per cent from 2011 to 2020, following robust economic growth and increasing rural electrification. It is further estimated that about $750 million will be invested in the Botswana electricity industry within the next five years. Such investments will be critical, as power imports from South Africa (which supplied 68 per cent of Botswana's power needs in 2011) will stop from 2013 onwards, in an attempt by the latter to address its domestic power supply deficit.
New analysis from Frost & Sullivan (http://www.energy.frost.com), 2011 Update of the Botswana Electricity Industry, finds that Botswana's electricity industry is expected to grow significantly with additional power generation capacities coming on stream in 2012-13 (the 600 MW Morupule B coal-fired power station currently under construction). Some other power generation capacities are planned to be commissioned in 2015-16 (300 MW), and possibly in 2017-18 (300 MW).
"New power generation capacities will most probably be based on coal, given the large untapped deposits available in the country. They will be owned by independent power producers (IPPs) given the limited financial means available to the loss-making state-owned power utility, Botswana Power Corporation (BPC)," remarks Frost & Sullivan's Energy and Power Systems Research Analyst Celine Paton. "Indeed, new power generation capacities are urgently required in Botswana as peak power demand is hardly met."
As the Botswana electricity industry moves forward, key challenges will include low electricity tariffs, combined with an inadequate electricity regulatory framework and a general lack of infrastructure.
"Electricity tariffs are not cost-reflective, explaining the increasing operational losses encountered by BPC," notes Paton. "Also, BPC has been facing spiralling costs of electricity imports, as a consequence of the tight power supply in the region as well as the successive electricity price hikes implemented by Eskom in South Africa."
Botswana will need to decrease its reliance on its neighbours as a source of (expensive) power supply. Toward this objective, the government will need to revise its electricity regulatory framework with, as a first step, the establishment of an independent regulatory agency.
A new independent regulatory agency – Botswana Energy and Water Regulatory Agency (BEWRA) – is expected to be put into place by end 2012, if the process runs smoothly. It should help ensure a more cost-reflective tariff structure that will attract private sector investment.
"Partnerships between the public and private sectors are required to better allocate risk, expertise and financial means in the new power infrastructure projects to be developed in the country," concludes Paton. "Furthermore, strong technical know-how and significant financial means will be required if the country wants to follow a low carbon trajectory."
Both solar energy and coal-bed methane present strong potential as cleaner electricity sources, but their high initial capital costs (solar), and the technical challenges posed by the extraction of coal-bed methane, (still in an exploration phase) remain the main barriers to be overcome. As a consequence, it is expected that coal will remain the main energy feedstock in the foreseeable future, if related financing remains available.
If you are interested in more information on this study, please send an e-mail with your contact details to Samantha James, Corporate Communications, at firstname.lastname@example.org.
2011 Update of the Botswana Electricity Industry is part of the Energy & Power Growth Partnership Service programme, which also includes research in the following markets: Overview of the South African Electricity Industry (2010 Update), The IRP2010: A Frost & Sullivan Impact Analysis and Overview of the Moroccan Electricity Industry. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.
2011 Update of the Botswana Electricity Industry
Corporate Communications – Africa
SOURCE Frost & Sullivan
More by this Source
Management Platforms and Advanced Applications Trigger New Growth in the Brazilian M2M Market
29 Aug, 2016, 16:16 BST
Exclusive Price offer as Frost & Sullivan launches eCommerce Store in APAC
29 Aug, 2016, 07:06 BST
Get content for your website
Enhance your website's or blog's content with PR Newswire's customised real-time news feeds.
Contact PR Newswire
Send us an email at MarketingUK@prnewswire.co.uk or call us at +44 (0)20 7454 5382
Become a PR Newswire client
Request more information about PR Newswire products & services or call us at +44 (0)20 7454 5382