For many years, oil companies have been getting involved in the renewable energy sector; however, over the past couple of years, more news has been surfacing about oil and gas companies coming up green. There could be many reasons, one including peer pressure that has resulted in negative publicity (re-emphasized following BP’s Gulf of Mexico catastrophe). And while peer pressure and negative media publicity can make a company drastically change its strategy, it is a business and in order to keep that business on top, evolution must happen. So it would be incredulous not to see oil and gas companies partaking in the renewable energy sector, particularly within the biofuel arena and geothermal sector.
One Brazilian oil firm, Petrobras, is working toward its biofuels goal by investing in Mozambique. Petrobras Biocombustiveis (PBio) took part in a sugar mill in Sena, owned by Acucar Guarani, that consists of 15,000 hectares. The plant has a significant spare capacity which could be expanded to 1.2 million tons, and it is the only sugar mill that produces refined sugar in the southern African nation. PBio’s Milas Evangelista de Sousa told Alternative Energy Africa that the concession agreement from the Mozambican government is for 98,000 hectares of land for a period of 50 years with the opportunity to renew for an additional 50 years.
Frost & Sullivan released a report in 2009 that put a positive light on Mozambique’s electricity industry. The study found that the Mozambican electricity industry earned revenues of $202 million in 2008 and is estimated to reach $455.5 million in 2015. “Major investments in electricity projects in Mozambique have the potential to add 9,000 MW of electricity to the Southern African power pool,” noted Frost & Sullivan energy industry analyst Jeannot Boussougouth. “Despite the global financial crisis, the demand for electricity is forecast to grow by 11% until 2015 as a result of a boom in the agriculture and manufacturing sectors, as well as a strong rural electrification program.”
Petrobras has made headway in Mozambique, employing 12,393 people, and continues its uphill stride. de Sousa said, “Petrobras is developing second/third generation biofuels research through its Research Center (CENPES) in cooperation with Brazilian and foreign universities and other organizations.” Although the company’s chief industrial officer Ricardo Castello Branco told Alternative Energy Africa that at this time, Petrobras’ investment plan does not include any other biofuel project in Africa. However, it is still plausible that there is more news to come from the Brazilian giant especially considering the initiatives from the South American company.
Last year Brazil and Nigeria discussed the possibility of a partnership in order to implement reforms in Nigeria’s energy sector. Brazil’s Executive Secretary of Mines and Power, Dr. Marcio Zimmerman showed how Brazil’s power utility, Electrobras, had diversified its energy mix using alternative energy sources composed of nuclear, biomass, coal, wind, and thermal energy. Giving a rundown of the reform measures implemented by Electrobras and Petrobras – the oil and gas company also partly owned by the Brazilian government – the executive secretary said that in the late 90s, his government introduced a decentralized structure in the areas of transmission, generation, distribution, and a system operator.
Brazil said that it was prepared to work closely with Nigeria to pass along its experience in the power and oil and gas sectors, which could lead to future investment opportunities through Petrobras and Electrobras. And this past July saw Ecowas and Brazil agreeing on new initiatives that would boost West Africa’s economic and political cooperation focusing on various issues including the environment and renewable energy.
Brazil is working on bringing its knowledge to the international community, especially in the developing world, but proper regulations and execution should be met by countries and governments. In closing, it is also important to remember that complete independence from the hydrocarbon sector is not going to happen anytime soon. The answer is diversification. So bring on the oil and gas companies. After all, they are the ones with the deep capital pockets that will help progress the R&D that is needed to make RE more attainable to those in the developing world, including Africa.
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