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New energy for Africa, from renewables to gas

To remedy constant black-outs, they have fixed their efforts on renewables. A big gas field discovered by Eni is going to change history.

by Eni Staff
06 February 2020
8 min read
by Eni Staff
06 February 2020
8 min read

Black-outs dragging down industry and growth

Interruptions of currents are a regular occurrence for people in both urban and rural South Africa, thanks to a mixture of bad decisions, insufficient investment in production and networks, and poor maintenance. Energy shortages reduce the potential for production in industry, mines and offices. What to do, then? Renewable energy could be the future solution for the large African country; it already represents a major investment in terms of infrastructure, new jobs in production, connected services, professional training and opportunities for academic research in a country which has sunlight and wind in spades.

Why is carbon not enough?

Energy shortages are common in developing countries but you might not expect to see them in an emerging economy like South Africa's, rich in carbon resources and an electricity user for more than 100 years. It might not have gone the way it has if not for the constant delays in finishing the massive coal-fired power stations at Medupi and Kusile. With a total capacity of 9,600 MW, these stations sit in South Africa's industrial heartland, near Johannesburg. In August, 800 MW of Medupi's potential 4,800 MW were put on the network, with the promise that the remainder of the production would be made available in 2019. As for Kusile, no information has been given on when it will be fully complete. Nonetheless, even when both the plants are running fully, it is likely that South Africa will have to tackle serious energy shortages of 10–15 GW by 2025, thanks to a predicted interruption of 6–10 GW in supply from coal-fired stations that have come to the end of their working life.

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Renewable energy will help keep the lights on

Unlike coal, sunlight and wind are available in big quantities and produce clean energy. With 2,500 hours of sunlight a year and winds on its southern coast, South Africa has one of the most ambitious programmes in the world for increasing renewable energy. With a strong partnership between public and private, the country will provide 13,225 MW (13.2 GW) of renewable energy by 2025, distributed under commercial agreements with Eskom. In 2015, for example, 42 projects with a combined capacity of 2,142 MW were linked up to the network, saving considerably on fuel costs, reducing black-outs and creating more than 25,000 new jobs. According to the Council for Scientific and Industrial Research in South Africa, the rapid expansion of renewable energy has cut the equivalent of 4.8 million tonnes of CO2. In the first four years of the programme, around 14 billion dollars were invested, 28% of which came from foreign investors. Renewable energy products currently provide almost half of the estimated production capacity of the coal-fired station, still under construction, in Medupi. South Africa's renewable programme is one of its biggest investments in infrastructure and is already providing far more energy, new jobs in production, connected services, professional training and opportunities for academic research.

Good for city and country dwellers

Renewable energy programmes also stimulate education and training. Academic research has been given a boost by the creation of a renewable and sustainable energy research centre at Stellenbosch University. A joint initiative in the sector by the government and private companies, at the new centre for renewable energy technology in South Africa at Cape Peninsula University, provides training in the technical skills needed to work in the new industry. South Africa is the only country on the continent with wind power companies at a national level, like Kestrel Renewable Energy and African Wind Power, working on the market independently or as partners of big global producers in the sector. Last year GRI, a company that makes wind turbines for renewable energy plants, opened a site in Cape Town. The same city also hosts big solar power companies, like the American giant SunPower.
For rural communities, wind turbines and solar panels provide off-grid energy for pumping water, heating, lighting and charging mobile phones. Telkom, the state telecommunications company, has already installed wind turbines with 3.6–12 V, produced by African Wind Power in South Africa, in the mountains of Drakensburg to find out if remotely controlled, or radio-based, hubs powered by wind will be safe from vandalism or theft, which are a problem for solar panels. For people living in villages near solar and wind production plants, there are many advantages, because a share of the property and profits in these projects belongs to the new community trusts set up to help local people. One example is the biggest wind plant in South Africa, Cookhouse Wind Farm, of whose 38.6 MW capacity the Cookhouse Wind Farm Community Trust owns 10%.

A revolution in the home

In the long term, access to renewable energy off the grid will bring an end to using wood to cook, which will be better for health, as houses will not be full of smoke. The electricity from a single turbine can do away with the daily grind of collecting wood for the fire. It can also increase profits for craft industries. For example, in one village a tailor managed to sew his clothes six times more quickly. Solar and wind energy also allow the inhabitants of villages to use electric pumps to irrigate their fields and have freshwater. Large-scale renewable energy projects offer rural populations many financial, economic and social benefits, but above all renewable energy will change the surroundings they live in, where at the moment light and dark are constantly intermittent.

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The enormous gas field that will change Mozambique

Elsewhere in Southern Africa, in Mozambique, there are big positive changes happening in energy for 27 milliion people. Best of all is the discovery of a large offshore natural gas field, with more than 450 billion m3 of gas, enough to produce for at least 25 years. About $8 billion will be invested in the field, which it is thought will bring in more than $16 billion in revenues for the Mozambican governments. But these numbers do not fully reflect the scale and complexity of the project.
Coral South, as the project is called, has been approved and will get under way in 2022. It is the first step to starting production in the enormous gas reserves in the basin of the Rovuma, the river that forms the border between Mozambique and Tanzania. “It's big, very big, but it's only the start,” says Eni CEO Claudio Descalzi. Coral South will produce around 140 billion m3, just a fraction of the estimated 2,400 billion m3 thought to lie in Area 4 alone. The latter is part of a basin with at least 4,500 billion m3. Area 4 is an exploration block in ultra-deep water, offshore of northern Mozambique. It is found about 50 km from the district of Palma and 200 km from the city of Pemba, at a depth of 1,500–2,200 m below sea level. Fifteen exploratory wells have been drilled in the block, five discoveries made (four at Mamba and one at Agulha) and a production and development area defined (Coral). The estimated reserves for the block are over 4,500 billion m3 of gas.
To develop Coral South, Eni and its partners in the project – Mozambican ENH, Chinese CNPC, Portuguese Galp and Korean Kogas – chose a cutting-edge solution: an FLNG, a huge floating site to extract gas from the field and liquefy it. In essence, a ship. There are only two other FLNGs in the world. One is already up and running in Malaysia and the other soon will be in Australia. It will be 400 m long, 66 m wide, bigger than any container ship in the world, and has a total weight when empty of more than 200,000 tonnes. What is more, the FLNG at Coral South will be the first in the world to operate on ultra-deep water. the Coral field lies between 1,500 m and 2,200 m underwater. 

Many are saying it is the right choice. BP, which has already committed to acquiring all liquefied gas produced in Coral South. ExxonMobil, which is entering the share capital of Eni East Africa. With 15 international banks and five export-funding agencies we have signed contracts for funding 60% of the project. This is the first instance in the world of project finance applied to an FLNG. For many analysts, the launch of Coral South means that the debt crisis in Mozambique is no longer an obstacle to financing ambitious projects for companies with a view to the long term. That long-term vision is what has driven Eni and its partners in making complicated choices, which give Mozambique a key role in the global energy picture, at the same time as helping transform the global energy paradigm towards an economy with low CO2 content.