Electricity grids would energize Africa, investors
WEST LAFAYETTE, Ind. African nations stand to become more prosperous and politically stable while creating investment opportunities for Western companies by developing regional electric power grids and pooling their energy resources, according to planning models developed by Purdue University industrial engineers.
The findings will be discussed at a Dec. 14 workshop during the U.S.-Africa Energy Ministers Conference: Partnership for the 21st Century, a three-day international gathering in Tucson, Ariz.
"The benefits that arise from people trading electricity rather than everybody manufacturing their own can be enormous," says Frederick T. Sparrow, a Purdue professor of industrial engineering who specializes in electrical utilities.
Cheaper and more widely available electricity would spur industrial and economic growth in regions of southern and western Africa.
"You have to have electricity in order to grow," Sparrow says. "Another benefit is that countries that trade together stay together. If you and I are trading, I am much less likely to wage war with you."
Purdue engineers began developing the economic models 15 years ago to forecast future electricity demands in the state of Indiana. The models were needed to make sure that plans for utility expansion were justified, given predicted demands. They later were used to predict what would happen if Indiana's electric utilities were opened to free trade, instead of the current, government-regulated system of utility monopolies providing power.
"The natural result of that was, if we can help Indiana utilities predict the impact of free trade, why can't we do it with other areas of the world?" Sparrow says.
In particular, he realized that such models would be ideal for assisting the Southern Africa Power Pool, an entity formed recently to establish how to best trade electrical resources within the 12-nation southern Africa region. The region, which includes South Africa and is about the size of the continental United States, possesses cheap hydroelectric power from the Congo and Zambezi rivers.
However, there is limited capacity to transmit that cheap power from distant hydroelectric plants to South Africa, by far the region's largest power consumer. Nationalism and conflict have hindered development of a regional power grid.
Consequently, South Africa relies on domestic coal for its power needs.
"It would provide great savings, by reducing production costs, for South Africa to import electricity than to produce it because there is all this potential hydro power up there," says Brian Bowen, an industrial engineer at Purdue who has applied the models to regions in southern and western Africa.
In a regional "power pool," countries like Zaire and Mozambique would derive enormous revenues by selling hydro power to South Africa, which would, in turn, enjoy major economic benefits from the low-cost power.
Sparrow described the power pool concept like this: "Suppose you can generate electricity for two cents a kilowatt hour, and I generate electricity at 10 cents a kilowatt hour. Wouldn't it be a good idea for me to buy electricity from you at say, six cents a kilowatt hour? You make four cents; I save four cents."
Building such regional grids is especially critical for Africa, which is expected to double its electricity needs by 2020. Such potential growth represents investment opportunities for utility companies in the Western world, Sparrow says.
"There are lots of venture capitalists who would like nothing better than to have access to a site where they generate electricity and sell it to the new grid," he says, emphasizing that the Purdue models are a valuable, non-biased resource.
"We are not government; we are not a utility; we are not an investor. We can look at the thing objectively."
Bowen, who acts as a liaison between Purdue and African utilities, has been training engineers in Africa how to use the models.
"This is very important for self-sufficiency," Bowen says, adding that the models are provided freely to all utilities.
"When you have this sort of modeling analysis tool, you can be very methodical in the way you do things. It means, when you get together, you have much more substantial discussions than just sort of talking off the top of your head and making calculations on the back of an envelope."
The U.S. Department of Energy expects the convention to attract 600 participants, including African energy ministers, senior government officials and corporate executives. The Purdue research is being paid for through two contracts from the U.S. Agency for International Development totaling $764,245.
Sources: Frederick T. Sparrow, (765) 494- 7043, firstname.lastname@example.org
Brian Bowen, (765) 494-1873, email@example.com
Writer: Emil Venere, (765) 494-4709, firstname.lastname@example.org
Purdue News Service: (765) 494-2096; email@example.com