Private equity seeks energy transition opportunities in Africa, plus other top energy stories this week

Private equity funds are looking to Africa to provide energy transition investment opportunities, and small-scale projects not connected to national grids are particularly attractive, Saad Ul Islam, investment director for infrastructure equity at British International Investment, tells Private Equity International.

More than 600 million people still lack access to electricity in Africa, almost half the population, and those with access do not always receive 24-hour reliability, according to the International Energy Agency (IEA).

But there is a growing trend of private equity firms playing a growing role in supporting the provision of energy services and technology, according to Ul Islam.

“Our view is that the energy transition in Africa will be mainly decentralized,” investment director Ben Hughes at Camco says, and these lower-cost projects are “much easier to deploy and finance” as a result.

Blackouts and erratic power supply from national grids have led more homes and businesses to turn their backs on more traditional models of energy supply and embrace private-sector energy solutions instead.

The EU, in efforts to pivot its energy reliance away from Russia, is embarking on a campaign to find more secure energy sources.

More than a third of new EU-nation energy deals since the invasion of Ukraine are with Middle Eastern countries, with the UAE leading the way, writes Andrew Hammond, Associate at LSE IDEAS at the London School of Economics for Arab News.

Of the 122 agreements put in place since March 2022, the US and UAE lead with 21, followed by Azerbaijan (10), Norway (nine), Algeria (nine), Qatar (eight), Serbia (five), Egypt (five), Saudi Arabia (four), and Japan, Israel, Namibia, Georgia, Angola, Namibia and Libya (all with two).

From the EU side, Germany has the largest number of agreements, at 27, followed by Italy with 18 and Hungary with 14.

But Hammond says the tracker indicates this success will complicate the EU 27’s energy transition, as new gas infrastructure will take years to secure value for money, and so must be part of the bloc’s energy mix for a corresponding amount of time.

“EU nations will need to do much more to invest in clean energy infrastructure if they are to decarbonize their economies, sustainably, in the next decade,” he says.

Oil prices have reached their highest level so far this year, reports CNBC. Supply has been curtailed, primarily by Russia and Saudi Arabia, which have voluntarily reduced daily production by a combined 1.3 million barrels. This is likely to create a market deficit during the fourth quarter that could cause prices to rise to over $100 a barrel, some analysts say.

Uranium prices have reached 12-year highs, as demand has been boosted by increased interest in nuclear power projects by governments around the world. Geopolitics has also played a part – the invasion of Ukraine has disrupted the nuclear power supply chain as Russia is a major player in converting and enriching uranium, all of which could mean higher uranium prices in future, the Financial Times writes.

A new power system that turns waste gas into electricity, clean hydrogen and water has been deployed in southern California. Power system manufacturer FuelCell Energy and carmaker Toyota will use the world’s first “tri-gen” power system to convert biogas sourced from agricultural waste and sludge into clean energy, as the US pushes for use of hydrogen from sources that do not generate CO2.

US engineers have developed a new coating for solar panels that causes snow to slide off, allowing for electricity generation even in adverse weather conditions. The new self-cleaning strips can be retrofitted onto old panels as well as new ones, do not interfere with panel efficiency or sunlight absorption, and could be available as early as this year, writes UK newspaper The Independent.

Technology innovations are a key part of reaching the UN’s Sustainable Development Goals, and a key topic at the Sustainable Development Impact Meetings. Watch the live sessions here and get key updates on the event.

UK Prime Minister Rishi Sunak is set to U-turn on some of the country’s net-zero policies, including delaying a ban on new petrol and diesel cars, but said he remains committed to the overall target of net zero emissions by 2050.

Energy efficiency is the quickest and cheapest way to decarbonization, says Olivier Blum, EVP of Schneider Electric’s Energy Management Business. Speaking about the outcomes of the recent IEA’s 8th Annual Global Conference on energy efficiency, he highlights the role of energy efficiency in a fair energy transition and how it can reduce costs and increase the security of supply.