Africa (Business)

Renewable energy technologies could be Africa's saving grace

Lynley Donnelly

Renewable energy technologies could become a means to leapfrog the power challenges facing the African continent.

Renewable energy technologies could become a means to leapfrog the power challenges facing the African continent. (AFP)

Renewable energy technologies could become a means to leapfrog the power challenges facing the African continent, in the same way that mobile technology has revolutionised how Africans communicate and access financial services.

“We are at a unique point in Africa where we have a chance to leapfrog technologies. At one time mobile phones were experimental technologies and now they have become main stream,” said Wale Shonibare, managing director of Nigerian based UBA Capital.

“In Europe when they talk about sustainable energy they are using it as part of diversifying their energy mix. But in Africa we are using sustainable energy to meet a need.”

Over time renewable energy technologies would no longer be seen as experimental but conventional, said Shonibare.

He was speaking at a discussion hosted by the Sustainable Energy Fund for Africa, an initiative of the African Development Bank.

The shortage of energy across Africa, rather than stifling labour regulation, has been identified as one of the major reasons companies are unable to grow and employ new workers.

Getting an electricity connection costs more on average in sub-Saharan Africa than anywhere else in the world, according to the African Economic Outlook Report of 2012.

This is playing havoc with the private sector’s ability to create jobs on a continent with a large unemployment problem, especially amongst young people.

This is particularly acute in South Africa, with youth unemployment rates double that of the national average.

At the same time South Africa is working to liberalise its energy grid, under constant threat of electricity shortages, as state power company Eskom struggles to meet national demand.

As renewable energy technologies become cheaper countries across the continent are looking to renewables energy sources to meet their needs.

South Africa is also looking to increase the share of renewable power as a proportion of total generation.

But under the countries long-term electricity plan the integrated resource plan of 2010 (IRP2010) renewable energy’s share of total power generation is only set to rise to 9% by 2030.

Kenya, meanwhile, generates around 20% of its power from renewable sources according to Geoffrey Mwau, economic secretary in Kenya’s ministry of finance.

Much of the county’s electricity comes from hydropower but severe droughts in the region have forced the country to turn to burning diesel in order to supply the grid, which is expensive and unsustainable, he said.

Kenya has taken a policy decision to move from hydro-power to other sources of renewable energy he said including expanding its geo-thermal capacity, and increasing solar and wind power.

Government’s had to create the policy environment to make it attractive for private investors to enter the electricity market, said Mwau.

Work began as far back as the 1980s to unbundle Kenya’s dominant state owned power company into separate generation, transmission and distribution entities.

“What this has done is separate the publicness of the electricity sector from the areas where the private sector can come in and play a role,” he said.

Over time this model has proved successful enough to generate sufficient buy in for a similar change in the Kenyan telecoms sector.

“The benefits are huge,” he said. Kenya has managed to raise close to over 100-billion Kenyan Shillings ($1-billion) through infrastructure bonds to support this kind of infrastructure development according to Mwau. The AfDB has mobilised $150-million to allow the Kenyan government to begin drilling for geo-thermal steam in the Menengai region according to Hela Cheikhrouhou director for energy, environment and climate change programme as the AfDB. The field is expected to generate 400MW of power in the first phase but could ultimately supply an estimated 1 600MW. Once the project begins producing electricity, it will be valued at least $1-billion, she said. Despite its slow start South Africa’s efforts to boost renewables and introduce private players are beginning to yield results according to Cheikhrouhou. “They seem to have found a recipe that is working,” she said. Last week the second round of bidders was announced in the Renewable Energy Independent Power Producer Procurement Programme. The programme has however been consistently over-subscribed suggesting that there is far more potential to introduce renewable energy into the grid. In the second window the department of energy received 79 bids. Of these, 51 met the qualification criteria but only 19 bidders were selected.

<em>Lynley Donnelly is in Arusha, Tanzania to attend the Annual Meetings of the African Development Bank. She was flown there and accommodated by the AfDB.</em>

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