Africa50 Slides 07.27
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Natural Gas for Africans: Doing Good and Doing Well Africa50 General Shareholders Meeting Melanie Kenderdine Principal Energy Futures Initiative Nairobi, Kenya July 19, 2018 confidential -- do not distribute Natural Gas: Building Block for African EconoMic DevelopMent and Growth in Multiple Sectors Natural gas is an extremely flexible fuel. It can be used in all sectors of modern economy – industry, buildings, transportation, and power generation. This flexibility, coupled with abundant natural gas resources in sub-Saharan Africa, Africa’s energy demand growth, and its commitments to universal electricity access and cleaner energy, are intensifying the focus on the development of African gas. While the flexibility of gas is attracting well-deserved attention, the inflexibility of the infrastructures for its transmission and distribution can diminish its uses in developing regions like sub- Saharan Africa. A suite of technologies can be used to address a range of demand- limiting infrastructure issues, creating new natural gas options for both urban and rural consumers. Natural Gas: Building Block for African EconoMic DevelopMent and Growth in Multiple Sectors …Ingredients in …Manufacturing of CheMicals Markets • Plastics • Ammonia • Fertilizer • Methanol • Fabrics Refining • Butane Regulation • PharMaceuticals • Propane • Hydrogen Process OptiMized Gas heat Natural Gas processing Resource Base …Heat Sources …Fuel for Power for Making -- Generation -- Efficiency Governance • Glass • NGCC baseload • Steel • Peaking plants • Cement • SMall turbines • Bricks • Ceramics • Paper Infrastructure Source: EJM 2018, coMpiled with inforMation froM Geology.coM Proved Reserves of Natural Gas in Africa by Country, 2017 Unproved Natural Gas Reserves Est. Gas Reserves/ West Africa • Senegal/Mauritania 16 Tcf but no production until at least 2023 • Nigeria Over 100 Tcf • Cameroon, Ghana, Togo, ≤ 10 Tcf each Benin, RofC, Gabon Africa50 Shareholder EJM, 2018. CoMpiled using data froM EIA, 2017. EstiMated Potential Gas DeMand in sub-Saharan Africa, 2050 Natural gas consuMption in Africa has More than doubled since By 2050, Nigeria will be third Most 2000. In 2015, Africa consuMed 22.7 quadrillion Btu (quads) of populous country in the world. priMary energy, nearly 23% of which was froM natural gas. This While they are already in the top proportion was second only to liquid fuels. 20 Most populous countries, the DeMocratic Republic of the Congo, Ethiopia and Egypt can expect their populations to More than double by Mid-century. Currently, three cities in Africa – Cairo, Lagos and Kinshasa – have 10 or More million people, qualifying as “Megacities”. This nuMber will expand to include Nairobi, Dar-es- Salaam, KhartouM and Casablanca over the next couple of decades. Between 2010 and 2050, Africa’s urban population will rise froM Source: EAPIC ForuM presentation, , 400 million to 1.26 billion. Gas Infrastructure DevelopMent in Sub-Saharan Africa - A 20 Year Horizon, Frost and Sullivan, Johns Hopkins Natural Gas for Urban/Rural Electrification for Africa50 Members Morocco Guinea 100/100/100 Tunisia Mali 34/82/7 100/100/100 Mauritania 35 / 84 / 2 Egypt 42/81/-- 100/100/100 Djibouti Senegal Sudan 52/67/-- Gambia 65 / 88 / 38 38/70/22 Burkina% FasoRural Electrification 48/ Rates/ 69 /16 % total electrification 19/61/Select1 Africa50 Countries 2016 • Burkina Faso 1 • Guinea 7 % urban • Gambia 16 • Sierra Leone 3 Kenya % rural • Togo 19 56/78/39 • Benin 18 • Cameroon Togo21 Cameroon Malawi 47/ 87/ 19 60/92/21 11/ 42/ 4 • RofC 23 Mauritius Republic of • Malawi 4 Benin 99/92/100 Congo • Mali Ghana 2 41 / 71 / 18 Nigeria 6/74/23 • Madagascar79 / 90 / 75 17 59/86/41 Madagascar 23/67/17 CoMpiled• withSudan data froM 22 Gabon the World Bank, 91/97/55 numbers rounded Ivory Coast Sierra Leone NA Dem. Rep. Congo 20/47/3 17/47 -- Electricity Regulatory Index (ERI) for Select African Countries High level of developMent, largely aligned with international best practiceAfrican governments have made tremendous strides Well-developed, but regulator or framework in still displays a nuMber of insufficiencies not aligned its international best practicerecent years in developing robust regulatory Average level of developMent; regulator or frameworks framework display numerous insufficiencies; not aligned with internationalfor besttheir practice electricity sectors; however, progress has Low level of development;been regulator uneven or across the continent. As a means to framework is insufficient and largely not aligned with international best practiceidentifying areas in which improvement is most ERI by needed, Country AfDB commissioned a study to develop this Electricity Regulatory Index. Source: Electricity Regulatory Index for Africa 2018, African DevelopMent Bank Africa Charcoal Production/Tree Cover In Most Africa50 countries, less than 25% of the populations have access to clean cooking fuels • Around 3 billion people cook using polluting open fires or simple stoves fueled by kerosene, bioMass (wood, aniMal dung and crop waste) and coal. • Each year, close to 4 Million people die preMaturely froM illness attributable to household air pollution froM inefficient cooking practices using polluting stoves paired with solid fuels and kerosene. • The increased use of liquefied petroleuM gas —along with More efficient cook stove technologies—would help reduce air pollution and support decarbonization efforts in sub- Saharan Africa. SoMe countries have already started to encourage LPG adoption through subsidies or other governMent programs, with mixed success. Scenario One: Natural Gas Infrastructure Build-out Utilizing Natural Gas Imports Large/Moderate-scale Power Urban CustoMers Generation (NGCC) (Electricity or Gas) DoMestic International Pipeline Pipeline SMall-scale Power Generation FSRUs (Microturbines or Reciprocating ICE) Port Infrastructure LNG Tankers SMall-scale Rural CustoMers LNG Shipping Regasification Micro-Grid (Electricity or Gas) Container FSUs Port Infrastructure Delivery MechanisM Overland (LNG or CNG) Electricity T&D NG Pipeline EJM, 2018. CoMpiled using Noun Project. Large/Moderate Scale NGCC Power Generation NGCC power generation is an attractive option for African Urban CustoMers Large/Moderate-scale markets due to its high capacity (Electricity or Power Generation relative to cost as well as Gas) (NGCC) capacity adaptability to meet individual country demand. DoMestic International Pipeline Pipeline LNG FSRUs Tankers The Kinyerezi II plant with 240 MW generating capacity and total cost of Port $353 million in Dar es Salaam, Tanzania, FSUs Infrastructure and a mega-project involving three 4.8 GW NGCC plants in Egypt are both under construction. Combined with 12 wind parks, the Egyptian project will produce 14.4 GW of power, increasing Egypt’s generation capacity by 45%. EJM, 2018. CoMpiled using Noun Project. Opportunities for Additional NGCC Generation/FSRUs or Both Technology Capacity Capital Fixed Construction With the current, long-term (MW) Cost O&M (EstiMated) projections of low priced natural ($/kW) ($/kW- gas, low capital cost, and short yr) construction timeline, large-scale Natural Gas CoMbined 702 978 11 2-3 years natural gas has become the Cycle generation technology of choice Advanced Natural Gas 429 1,104 10 2-3+ years compared to other central station Combined Cycle or baseload options. Five Africa50 CoMbustion Turbine 100 1,101 17.5 18 Months+ countries alone (Senegal, Ghana, Advanced CoMbustion 237 678 6.8 18 Months + Ivory Coast, Nigeria and Kenya) Turbine could use 8300 MW of gas-fired Advanced Nuclear 2,234 5,945 100.28 5.5-7.5 years power generation by 2030. Ultra Supercritical Coal 650 3,636 42.1 5+ years Source: Energy InforMation AdMinistration, Capital Cost EstiMates for Utility Scale Electricity Generating Plants NoveMber 2016 Current NGCC Plants Under Assessment Floating Storage and Regasification Units A single FSRU vessel can generate 3,600 FSRUs usually have a capacity of 120,000-180,000 cubic megawatts of power, sufficient to light up Meters. Capital costs for a new FSRU are around $240 Ghana, Togo, Cote d’Ivoire and Benin. Million (roughly half of an onshore regasification unit). LNG tankers can also be converted to FSRUs in about a year to 18 Months, with construction costs in the $80- $100 Million range. Port facilities add additional costs for either new or converted FSRUs. The FSRU space reMains a SMall-scale Power niche one with only a handful Generation FSRUs (Microturbines or of FSRU operators with FSRU Reciprocating ICE) operational experience, such as Port Infrastructure LNG Shipping Rural CustoMers the BW Group, Hoegh and Container SMall-scale (Electricity or Gas) LNG Tankers Regasification Excelerate. Micro-Grid FSUs Port Infrastructure EJM, 2018. CoMpiled using Noun Project. Existing/Planned FSRUs, 2017 Existing Planned Future/additional FSRU Plan Source: LNG World Shipping July/August 2017 Opportunities for Additional NGCC Generation/FSRUs or Both Africa50 Countries Benin, Burkina Faso, Cameroon, DeMocratic Republic of Congo, Djibouti, Egypt, Gabon, Gambia, Ghana, Guinea, Ivory Coast, Kenya, Madagascar, Malawi, Mali, Mauritania, Morocco, Niger, Nigeria, Republic of Congo, Senegal, Sierra Leone, Sudan, Togo, and Tunisia. Source: Electricity Regulatory Index for Africa 2018, African DevelopMent Bank Scenario Two: Illustrative Large-scale Natural Gas Infrastructure Build-out Using Indigenous Gas Supplies Urban CustoMers (Central Pipeline Export LNG Export Large-scale Power Generation (NGCC) Station Grid;