Denham chief – coal has role to play in powering African potential

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The vice-president of global energy and resources at private equity giant, Denham Capital says coal-fired power makes sense in certain regions of Africa, particularly where diesel is the alternative, and should not be discarded as a solution to meeting growing demand for power on the continent.

 Steve M Steve Mandell andel of Denham Capital told an Africa-focused session, entitled ‘Africa rising?’ at a Dentons-hosted Global Power Summit in London, that in terms of solutions for various African countries, “the alternative is often diesel. This is dangerous to humanity and the environment; methane emissions are similarly not good. Not all Africa should have coal, but coal is often the best alternative solution for a particular country. In certain regions coal makes sense.”

 Despite the rhetoric advocating a global move away from coal-fired power, Mandel pointed out that in the US and UK 50 per cent of power generation still originated from coal.

“By 2040 that figure will still be 40 per cent. Coal as a solution should be coupled with renewables. It’s not a perfect solution but it shouldn’t be struck off the list”

While pointing out the realities of coal being the lesser of two evils, where diesel was involved, the Denham power executive was keen to emphasise that Denham itself always chooses to pursue cleaner solutions when they are available (as evidenced by its investments in BioTherm Energy and Endeavor Energy as well as its recently exited investment, FRV, which had several projects in the region).

Prior to a panel debate on the connection between Africa’s economic development and its power generation prospects, the audience watched a presentation by Ali Mufuruki, of the Tanzanian Central Bank (below)  critically analysing the prevailing narrative of African growth.

He argued that African growth should not be compared with the declining fortunes of the US and EU. Ali Mufuruki

“A fairer comparison is between Africa and China. China was rising at 18 per cent at its peak so why is a 6-7 per cent increase perceived as a success unless a mediocre standard is viewed as acceptable for Africa?”

“Today China is growing at 8 per cent despite recession but Africa is still seen as special with a lower growth rate?”

Mufuruki then drew the connection between African nations’ limited ability to meet its economic potential and the state of its power infrastructure.

“France has 65 million people but generates four times the power of sub-Saharan African nations – One French man consumes 50 times more electricity than an African today.”

Mandel told the gathering at Dentons London offices that the development of renewables is particularly suited to African countries.

“In Africa it makes sense- the wind blows more and sun shines more- and the cost of solar panels have come down 85 per cent. Renewables are a cost effective option in Africa. A solar plant can be build tin 6-13 months without the same grid constraint. Smart grid and distributed generation will be key to what is a large rural continent.”

In more urban areas where larger scale power plants were required Mandell said that the roadblock represented by poor infrastructure needed to be tackled from the top down.

“Developers are ready to build but the framework is not in place,” he said.

 



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