Question: READ THE FOLLOWING CASE STUDY AND ANSWER THE QUESTIONS THAT FOLLOW. TOO BIG TO SUCCEED? AFRICA'S CLEAN ENERGY MEGA-PROJECTS When it comes to deploying renewables
READ THE FOLLOWING CASE STUDY AND ANSWER THE QUESTIONS THAT FOLLOW. TOO BIG TO SUCCEED? AFRICA'S CLEAN ENERGY MEGA-PROJECTS When it comes to deploying renewables for Africa's urgent need for a high-energy future, big is indeed beautiful - and necessary. But history suggests that proposing massive coordinated infrastructure projects as quick fix/catch-all solutions to a country or region's energy challenges is far less straightforward than the alternative: fostering a market for utility-scale renewables. Supersizing project ambitions beyond the capacity limits of governments, utilities, and grids may not ultimately be the fastest or most cost-effective path to achieving infrastructure goals. Clean energy mega-projects have a mixed track record Egypt's 1650 MW Benban Solar Park and Morocco's Noor project sites - as large as 580 MW and 2,000 MW cumulatively - have successfully brought coordinated mega-projects online. However, previous efforts like Desertec, the Grand Inga Dam, and the African Renewable Energy Initiative (AREI) have been infamously stalled or cancelled for years. But this string of failures hasn't tempered ambitions, with a new wave of mega-project announcements such as the AfDB's Desert to Power program and a potential 5 GW PV project in Botswana and Namibia. Mega-projects face inherent risks to progress and completion Generally, large-scale infrastructure projects face inherent execution risks. - Cost and timeline overruns. The sheer scale of mega-projects naturally results in divided power over meeting project milestones, leading to ballooning budgets and long delays in completion. This isn't exclusive to energy projects in Africa, one study suggests that nine out of ten megaprojects (generally defined as projects costing \( \$ 1 \) billion + ) go over budget, eroding investor interest and confidence in their feasibility.
Changing market conditions. Design and construction timelines for big infrastructure projects typically span at least a decade and can run thirty to forty years in some cases, during which - macro-market conditions, leadership at stakeholder organizations, and political economy balances can change dramatically, - Multiple actors: Most mega-projects depend on pooled resources, and shared interests from a network of both public and private entities, often representing governments, land and resource owners, contractors, international investors, and local communities. When projects cross borders, which many mega-projects do, this further raises the complexity. Consensus building, aligning strategic interests, and stakeholder management can be highly challenging. - Perverse incentives. Because competition typically occurs at the sub-contractor level rather than at the contractor level, mega-project funding structures often systematically incentivize stakeholders to underestimate costs and timelines and overstate the benefits of a project to gain a competive advantage when competing for work. A more favourable alternative. Because Africa's need for cheap and abundant industrial-scale energy is urgent, massive mega-projects that will likely take 10 years or more to reach fruition - and be over-budget and behind schedule - may not be the optimal path to bringing on the most additional generation capacity in the shortest amount of time.
- and be over-budget and behind schedule - may not be the optimal path to bringing on the most additional generation capacty in the shortest amount of time. Instead, developing a well-designed procurement market for cost-competitive utbity-scale renewables, with competitive tendering, reasonable design, permitting, and construction timelines, regularly cadenced rounds of procurement, and a stable policy regime will likely bring more large-capacity projects online more rapidly and at a lower cost than simply trying to concentrate ambitions, capital, and logistics into a single mega-project. Fortunately, utility-scale renewables are modular by nature; so where it does make sense to concentrate or co-locate generation capecities, such as at Benban or Noor, a phased tendering approach to scale-up may be more effective than one single procurement for the whole amount. Other limiting factors; such as the capacity of the transmission and distribution network, may also favour a phased approach to scale-up in parallel, especially when phases of different projects can be sited strategically at nodes on the grid to avoid congestion. Bottorn Line. In most markets, the barriers to the timefy success of mega-projects will likely overwheim the benefits of large-scale coordination. A stable, well designed procurement market for cost-competitive renewables will likely scale affordable, rehable industrial energy supply in Africa faster and at a lower cost than mega-project plans that rely on insulficient institutionat, financial, and technicat caposity. Source: 8 enjamin (2020)
4.1 Critically analyse SIX 'players' in the general structure of project management and suggest how you believe each could assist in remedying the execution risks mentioned in the above case study. Substantiate your answers. (30)
4.2 Evaluate the disciplines that are known as the foundation for the project management process and suggest how you believe the proper adoption of these disciplines would impact the above mentioned mega-projects. Motivate your answer using excerpts provided in the above case. (20)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
