It is no secret that there is an ongoing energy revolution taking place worldwide. Many countries are making conscious efforts in becoming more energy independent and sustainable. In achieving this, all energy options are being considered and in the past ten years, renewable energy sources have been the most prominent. The rationale for any country seeking to be energy independent is clear; to reduce exposure to unreliable energy imports and attain a state of energy security. The technicalities of achieving these are unlimited but often intricate.
Africa’s energy climate has been perpetually described as appalling. The continent’s progress of energy development has varied widely for several years. Very few countries have recorded significant successes while most have stagnated or deteriorated. This has been attributed majorly to lack of policy implementation, incompetent human capital and corruption. In a recent energy fact sheet released by the World Bank, 24 of Africa’s 54 countries are described to be in energy crisis situations. Most other African countries lack even basic power facilities adequate to cater for their citizens. Today, power is erratic, inaccessible and widely pricey for many in Africa. This has been partly responsible for the low standard of living and hardship the continent faces.
So what is Africa’s current energy mix? Fossil fuel based power generation is the sole largest electricity generation in Africa contributing about 60 percent of the continent’s electricity supply. Hydropower and coal are the other major energy sources making up about 32 percent and 7 percent respectively. These resources present a huge challenge to the continent as they are not evenly distributed and are limited. As a result, most African countries are significantly vulnerable to supply uncertainties. Without energy security and the appropriate mix of energy sources, most countries in Africa risk disappointing investors as well as their own citizens.
As you may agree, the ultimate solution to any country’s energy problem is not necessarily from a single energy source, but instead, a combination of several sources to achieve efficient, reliable and sustainable energy generation to distribution processes while preserving the environment. Africa is endowed with a broad range of renewable energy resources ranging from wind and solar to geothermal and hydropower. Other sources such as biomass, tidal and wave energy are also very valid clean energy sources.
The good news is that in all of these, there is a genuine opportunity for investors, African policy makers, governments and other stakeholders to turn this menace around for the better. Based on data from Bloomberg new energy finance, there is a new trend in global renewable energy investments. Renewable energy investors are gradually shifting to developing countries as financiers seek for viable opportunities in regions with broad, underdeveloped portfolios of green energy resources. Africa’s renewable energy sources are very many and are evenly distributed in large amounts. The continent is bounded by the Indian Ocean in the east and the Atlantic Ocean in the west, which possess vast ocean winds and currents. Solar energy on its own is undoubtedly the chief clean energy source available. Another largely untapped, freely occurring renewable energy source is geothermal (ground source heat) in eastern Africa. South Africa, Egypt, Morocco and Kenya are some of the few countries that have identified these potentials and have taken commendable steps to creating enabling environments for renewable energy initiatives. Their new approach to energy development has galvanized their economies and attracted foreign investors.
In the last couple of months, South Africa’s renewable energy market witnessed an optimistic outlook as it ramped up another gear. RustMo1, a 7-MW solar photovoltaic power generating facility, is scheduled to commence power generation in November 2013. Also, Google Inc. announced its first renewable energy project in Africa — the Jasper Power Project, a solar energy project in South Africa.
Also, Egypt and Morocco have actively reformed their electricity sectors by creating energy policies to encourage renewable energy investments in power generation. They have also set modest targets to be met in the near future. Crucial laws have been passed by their respective parliaments to create competitive energy markets and attract domestic and foreign investors. This has unquestionably boosted wind, solar and hydropower projects in these northern African countries. Morocco has an ambitious renewable energy programme seeking to generate more than 40 percent of its energy from renewables. At the moment, Morocco has seven completed wind farms, the largest of which is the 140-MW Tanger Farm.
Moving over to the east, a significant amount of Kenya’s electricity generation is from geothermal sources via two power plants; Olkaria I (45 MW) and Olkaria II (65 MW). As Africa’s pioneer geothermal nation, Kenya has exploited the vast ground source heat from the Great Rift Valley of east Africa. The geothermal plants supplement the overall energy generated from Kenya’s hydropower stations, a petroleum-fired plant and imported electricity from Uganda.
The adoption of renewable energy in Africa proffers a huge opportunity to improve socio-economic indices and living standards. Better access to electricity will also go a long way to reduce poverty and ensure environmental sustainability. In many parts of Africa, millions live kilometres away from developed towns and cities and are not connected to the grid. Renewable energy sources provide clean energy alternatives in such cases for the provision of off-grid electricity supplies to less privileged people in very remote areas. Also, the urban population growth being witnessed in many African cities poses a great challenge on existing electricity infrastructures. This can be enhanced by including renewable resources. In the words of United Nations’ Environment Program Executive Director, Achim Steiner, “the uptake of renewable energies continues worldwide as countries, companies and communities seize the linkages between low-carbon green economies and a future of energy access and security.”
Strong economies all over the world are highly dependent on accessible, reliable and affordable electricity supplies. One of the obvious ways that Africa can achieve global competitiveness is to significantly provide electricity access as a very clear relationship exists between economic activity and electricity use. Africa’s future prosperity requires a change from the status quo; a deviation from the current total reliance on conventional energy sources.
Written by Lanre Okanlawon as published in African Business Review Magazine (July/August Edition).
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