The new South Africa Power Report forecasts that the country will account for 19.27% of Middle East and Africa (MEA) regional power generation by 2013. BMI’s MEA power generation estimate for 2008 is 1,200 terawatt hours (TWh), an increase of 6.1% over the previous year. We are forecasting an increase in regional generation to 1,561TWh by 2013, a rise of 30.14% in 2008-2013.

MEA thermal power generation in 2008 is estimated at 1,135TWh, accounting for 94.6% of the total electricity supplied in the region. Our forecast for 2013 is 1,453TWh, implying 37.59% growth that reduces slightly the market share of thermal generation to 93.1% – thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. South Africa’s thermal generation in 2008 was around 258TWh, or 22.77% of the regional total. By 2013, the country is expected to account for 19.00% of regional thermal generation.

For South Africa, in 2008 coal was the dominant fuel, accounting for 77.7% of primary energy demand (PED), followed by oil at 19.9% and nuclear with a 2.3% share. Regional energy demand is forecast to reach 887.6mn tonnes of oil equivalent (toe) by 2013, representing 20.7% growth over the period since 2008. South Africa’s 2008 market share of 17.99% is set to fall to 16.64% by 2013. The country’s 13.3TWh of nuclear demand in 2008 is forecast to reach 17.0TWh by 2013, with its share of the MEA nuclear market falling from 100% to 68% over the period.

South Africa is now ranked equal fifth with Saudi Arabia in the updated Power Business Environment rating, thanks largely to its significant market size, low level of energy import dependency and reasonably high proportion of renewables use. The power sector is not yet competitive, with little progress towards privatisation. The regulatory environment remains relatively unattractive. South Africa is currently three points behind Iran and is unlikely to overtake the Gulf state during the next few quarters.

The report forecasts South African real GDP growth averaging 2.14% a year in 2009-2013, with a fall of 1.80% forecast for 2009. The opulation is expected to expand from 48.7mn to 51.2mn, with GDP per capita and electricity consumption per capita forecast to rise 51% and 3%, respectively. Power consumption is set to increase from an estimated 210TWh in 2008 to 228TWh by 2013, improving slightly the supply/demand balance if the country can deliver our forecast annual 2.0% generation growth.

Between 2008 and 2018 we forecast an increase in South African electricity generation of 27.5%, the bottom of the range for the MEA region. This equates to 16.5% in 2013-2018, up from 9.5% in 2008- 2013. PED growth is set to increase from 11.7% in 2008-2013 to 16.5%, or 30.1% for the entire forecast period. An increase of 717% in hydro-power use (from a very low base) in 2008-2018 is a key element of generation growth. Thermal power generation is forecast to rise 22.5% in 2008-2018, with nuclear consumption up 50.4%. Details of the longer-term power forecasts can be found later in the report.