Corruption tops challenges facing energy industry in Nigeria, Africa
Corruption has been identified as the biggest challenge that power professionals in Nigeria and the rest of Africa face in their industries, according to recent African Utility Week industry survey.
Aside the issue of corruption, skills gap, access to finance, regulation and policy clarity, red tape and economic slowdown were also perceived as hindrances.
The survey result was the submissions of respondents from Nigeria, South Africa, Kenya, among other countries who scored corruption 49 percent while scoring the other issues from 36 percent to 28 percent.
Nicolette Pombo-van Zyl, editor of the energy trade journal, ESI Africa, observes that corruption is still perceived as a major obstacle and this goes along with respondents’ strong call for government commitment and transparency.
“It will take concerted leadership from all levels of government to rid the continent of this deeply entrenched challenge. The skills gap is also pinned as a high concern, putting development at risk – the loss of engineers, technicians and managers who are now retired or close to retirement age is a real factor; perhaps reviving apprenticeships along with attractive offers would make inroads to solving this risk,” Pombo- van Zyl says.
Skills in finance, engineering/technical, people management and leadership all scored high (29%-33%) in a question on what power professionals perceived to present the biggest skills deficit in their companies.
Asked what the most promising source of generation is for Africa, Solar PV scored more than 54 percent among the respondents while nuclear was second with 11 percent.
“The reason could be that rooftop PV, when measured against the other technologies, is easy to execute as a project and photovoltaic modules are becoming very affordable,” she says.
She adds: “it is also the most obvious technology to use in mini- and off-grid projects as well as for use in hybrid models. However, what is interesting but not surprising is that 11% of respondents feel that nuclear energy is the most promising generation source. Nuclear has its merits.
“What is disappointing is how few are in favour of biomass as a promising source of generation capacity, considering that this technology offers a distributed model and a measure of reducing the mounds of waste that Africa’s cities are confronted with.
“Another concern is the lack of interest in wind energy – only 8% of respondents felt this technology a worthy source; however, it does rank slightly higher than hydro where the continent’s impressive potential capacity is recorded. Wind energy is likely to make tentative steps towards market growth now that South African, Kenyan and Moroccan wind farms are making good headwinds.”
When asked the question: “The future lies in:” and given four choices only, namely distributed generation, mini grids, utility scale grids and storage, distributed generation was a clear winner at 40% with storage second at 27%, then mini grids with 22% and utility scale grids scoring the lowest with 11%.
According to Pombo-van Zyl, distributed energy resources (DER) are top of mind as an imminent risk to the traditional utility and municipality business model – and not just in Africa.
The ESI Africa editor’s take on these results: “it is a concern that there is a joint winner from this question: finance and engineering/technical skills. Without these two significantly important skills being resident within the utility market it is no wonder that companies’ cash flow is untenable and technical losses along the value chain are present due to maintenance challenges.
A potential solution lies in leadership and people management, which also scored very high in this question.”