Market Trends of Africa Low-Voltage Electric Motors Industry
Oil and Gas to be the Largest End-user Industry
- Electric motors are of utmost importance in the upstream sector of the oil and gas industry, serving as the primary driving force for various equipment, including pump and compressor systems. Furthermore, Low Voltage Electric Motors are gaining significant traction in offshore drilling operations within the O&G industry. These motors are specifically engineered to function dependably in challenging environments, prioritizing the safety of both personnel and equipment.
- According to the International Energy Agency (IEA), the production of oil and gas continues to play a crucial role in Africa's economic and social progress. However, there is a shift in focus towards meeting domestic needs. The global push for clean energy transition in the Sub-Saharan Africa (SAS) region poses a risk of reduced export revenues for Africa's oil and gas sector. By 2030, approximately two-thirds of African oil and gas production will be consumed domestically, highlighting the need for robust infrastructure, including storage and distribution facilities, to meet the growing demand for transportation fuels and liquefied petroleum gas (LPG) within the continent.
- South Africa, a highly developed nation in sub-Saharan Africa and a prominent economic force in the region possesses proven oil reserves of 15 million barrels as of January 2022, as reported by the Oil & Gas Journal (OGJ). These reserves are exclusively situated offshore in the Bredasdorp Basin and along the western coast near the maritime border with Namibia. Given the widespread utilization of low-voltage integral horsepower motors in various O&G industrial applications, the increasing oil demand is anticipated to generate significant prospects in the area.
- The oil and gas industry in Africa is embarking on a new phase. With the global push towards reducing reliance on fossil fuels, the pressure on oil and gas-producing nations on the continent is increasing. The Energy Institute reports that Africa's share of global oil production will only be 7% in 2022. Nevertheless, the continent has significant untapped potential and abundant natural resources, which are expected to attract investment and require low-voltage electric motors.
- Furthermore, it is anticipated that the conflict in Ukraine will generate substantial demand and investments in Africa's oil and gas sector, presenting significant prospects for market expansion. Europe's need for alternative energy sources, in light of Russian sanctions, is projected to stimulate interest in African energy initiatives that were previously disregarded due to financial constraints and environmental apprehensions. Consequently, African nations with limited or nonexistent oil and gas production, such as Namibia, South Africa, Uganda, Kenya, Mozambique, and Tanzania, are expected to witness substantial O&G investments in the forthcoming years, amounting to billions of dollars.
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South Africa is Expected to Witness Significant Growth
- Rapid industrialization, significant investment towards infrastructure development, and a growing focus on expanding the manufacturing sector are presenting major growth prospects for the low-voltage electric-motor markets in the African region. Africa’s developing infrastructure allows populations, services, and industries to prosper across the region, and further investments have made it an impactful sector.
- South Africa is creating an ecosystem conducive to embracing industry 4.0 technologies, thus presenting the trend of industrial automation. The rising industrial automation is also fueling the demand for low-voltage electric motors as it plays a crucial role in automated systems by providing precise control and reliable performance.
- Furthermore, the transition to a cleaner, prosperous economy has become an immediate priority for countries and a sustained effort over the years and decades ahead. For instance, in August 2022, the Government of South Africa adopted “A Framework for a Just Transition,” which will shift South Africa towards a zero-carbon economy in ways that support national development aspirations, ensuring decent work for all, social inclusion, and the eradication of poverty. The framework provides a USD 8.5 billion energy transition partnership, supporting South Africa to phasedown coal, accelerating renewable energy deployment, and spurring innovation in green hydrogen and electric vehicles.
- Also, the countries’ increasing initiatives for renewable energy sources are also creating a demand for the market studied. South Africa has abundant solar resources, making it a prime location for developing solar energy projects. According to the Energy Institute, by 2030, power generation in South Africa is expected to increase by more than 40%, rising from approximately 210 TWh to 300 TWh by the end of the decade. Such developments will demand the use of low-voltage electric motors, thereby boosting the market’s growth.
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