Monday, 26 October 2015

Egypt, France, Qatar and South Africa Power Report Q4 2015 Market Report; Launched via MarketResearchReports.com

Egypt, France, Qatar and South Africa Power Report Q4 2015

The demand for power in Egypt is set to increase in the medium- and long term due to forecast annual growth rate of 0.98% between 2013 and 2024. We forecast that total electricity generation will grow by 11.3% in 2015 as the government brings new gas and coal capacity online in an attempt to overcome chronic power shortages. The political situation has become more stabilised and allowed for investment pledges to be made in the power sector. We expect power generation and fixed investment in power projects to rebound over the next 18 months as a result of greater political stability and an improving economic outlook.

Egypt's power sector is enduring an exceptionally challenging period. Persistently high demand for energy, driven in part by the country's generous regime of energy subsidies, has weighed heavily on Egypt's ageing electricity infrastructure, which has struggled to keep pace with a growing need for energy. Exacerbated by deliberate attacks on infrastructure by militants, this has led to regular blackouts across the country, and has forced the government to implement cutbacks in the provision of power.


France's power industry is well developed, leaving little scope for a substantial expansion in terms of generation or capacity over our ten-year forecast, particularly as weak economic growth will limit any rises in domestic consumption rates. The power market will remain dominated by domestic energy giant EDF, however expansion of non-hydropower renewables does offer opportunities for growth and despite a lack of regulatory clarity, France overall is an attractive investment environment.

France's thermal generation shrunk by an estimated 19.1% y-o-y in 2014 following sharp falls in gas, coal and oil generation and is expected to remain flat in 2015. Non-hydro renewables is recording the strongest growth. Publisher estimates the use of non-hydro renewables grew by 5.6% in 2014 and we forecast an additional 6% growth in 2015, followed by similar growth through to 2024. In 2015 we expect to see a minimal decrease of around 0.9% in terms of total generation as growth in renewables is offset by declines in coal and oil generation.


The Qatari power sector is set for strong growth over the coming decade as the government continues to spend heavily on new infrastructure projects, while domestic energy consumption continues to grow. Qatar remains in an enviable position, as the nation possesses the third largest gas reserves globally and is the world's largest exporter of Liquefied Natural Gas (LNG). In addition, the country has a great ability to withstand the temporary decline in global oil prices. Investments in power infrastructure will continue to remain strong, in preparation for the FIFA World Cup, in 2022.

The outlook for the domestic power sector in Qatar remains bright. Although the fall in international oil and gas prices has forced the government to scale back plans to build a huge USD3bn power plant, known as Ras Laffan D, we retain a positive outlook for the sector, with healthy fiscal coffers and growing demand for power likely to keep government spending high for the coming years. Although Qatar is attempting to reorient its power sector towards the use of solar power and other renewable sources, for the time being the country remains almost entirely dependent on natural gas for its energy. With the economy continuing to grow at a robust pace, and the government anxious to ensure that the country is ready for the 2022 World Cup, this is likely to remain the case for the foreseeable future. While such dependence on a single source of fuel for electricity generation would typically be a concern, given the country's vast supplies of natural gas and the government's deep pockets, it is difficult to envisage a scenario where this dependence translates into any serious risks for the sector's outlook any time soon.


This quarter we have made significant upward revisions to our solar and wind power forecasts, on the back of the added renewables capacity allocated by the South African government under the country's REIPPP auction system. This notwithstanding, our negative outlook for South Africa's power sector continues to remain in place this quarter. Inefficient existing generation capacity, a lack of investment, delays to project commissioning and the precarious financial situation of Eskom show little sign of abating over the short- to- medium-term. This has led our Country Risk team to revise down the nearterm growth forecasts for the country, as rolling blackouts will offset the positive growth impact of lower oil prices. On a more positive note, we highlight that South Africa's power plant and transmission grid infrastructure will continue to offer investment opportunities over our forecast period and beyond, thanks to a buoyant renewables industry, pressure on state utility Eskom to boost generation to avoid power shortages, and South Africa's nascent nuclear expansion plans.

In 2014, electricity generation in South Africa stood at 237.0 terawatt hours (TWh), representing a 1.26% decrease on the previous year. Coal-fired sources of electricity accounted for 93.1% of this figure, and we expect that coal will continue to play a major role in electricity production during the course of our forecast period, rising by an average of 1.31% to stand at 251.4TWh in 2024. Economic growth and demographics will both drive demand upwards.

No comments:

Post a Comment