Tuesday, June 14, 2016

An Energy Lion Stirs In Africa

By David Heberling, Policy Intern

In my last post, I focused on the challenges and progress that renewable energy faces across the globe. This week, I am narrowing my focus to Africa, a region that presents possibilities and challenges in equal measure.

In the past, parts of sub-Saharan Africa were unfortunately notorious for political, social, and economic upheaval and instability. However, renewable energy provides a promising way that these countries can “leapfrog” over the need for long, expensive transmission lines from coal and fossil fuel plants, to distributed renewable sources. A similar “leapfrog” effect has occurred with respect to cell phones.

As cellular technology has increased, cheap mobile phones and wireless internet access have proliferated. Many regions of Africa that have historically lacked constant, reliable access to telephone communications, let alone access to the internet, have increasingly come “online.” This increased access is true even in the more isolated rural sections of the continent. Much of this rise in access is due to advances in technology driving down the prices of the devices themselves, and enabling connectivity with relatively little infrastructure. Instead of laying miles of physical landlines, telecommunications companies need only maintain cell towers.

Source: 2015 Africa Progress Report
The mobile phone revolution has dramatically changed the lives of many sub-Saharan countries and has enabled their populations to wholly “leapfrog” an outdated form of technology. This is where the main hope lies for Africa’s adoption of renewable energy. As clean energy entrepreneur Jigar Shah stated, “[e]nergy is starting to look a lot like mobile phones.” This means that the future of energy generation for developing regions, like sub-Saharan Africa, could start to resemble the same “leapfrog” over long, expensive transmission lines from coal and fossil fuel plants, to distributed renewable sources.

The initial reality facing the sub-Saharan region is one of extreme energy poverty. In 2013, Africa’s average electricity consumption was 600 kWh per capita. By contrast, the average consumption of electricity worldwide was 3,064 kWh per capita, while the U.S. averaged a staggering 12,985 kWh per capita. For those Africans who actually have access to the grid, their connection is woefully unreliable and expensive. Those not connected to the grid may spend up to 16% of their income and $10 per kWh using generators. This is nearly 100 times more expensive than the electricity in countries with advanced electricity systems.  Rural populations make up 84% of those without access to electricity and represent both the extreme challenge of conventional transmission strategies in Africa, as well as the hope represented by distributed generation adoption.

Committing to the adoption of renewables would benefit sub-Saharan countries. Overall, a mass adoption of renewable energy could reduce healthcare costs, increase job growth, and could lead to much needed political stability. This opportunity has not gone unrecognized. African leaders, spurred on by the progress and commitment of the Paris Agreement, have formed the African Renewable Energy Initiative (AREI). AREI aims to hit ambitious renewable goals by 2030. For example, South Africa aims to provide 56% of energy production via utility-scale solar, Kenya 28%, and Mozambique 34%. Stanford University’s Solution’s Project claims that by 2050 South Africa, and 139 other countries world-wide, could have 100% renewable generation.

These ambitious plans will require both financial investment and creative deployment strategies with a mixture of centralized and distributed generation. Already, international partnerships are reaching out to make this cooperation a reality. United States Agency for International Development (USAID), Dutch bank FMO, and Power Africa have committed $5 million to begin the development of mid-sized renewable projects through Climate Investor One (CIO). By investing in projects ranging from 25 MW to 75 MW, CIO aims to achieve a total of 30,000 MW of generation and connect 60 million houses and business by 2030.

While those projects aim at expanding current grid penetration, the nature of renewable technology has allowed distributive generation to advance more cost-effectively where grid access is problematic. Building upon the experiences and expertise of domestic solar success stories, Off-Grid Electric has raised $25 million from investors to continue to develop their micro-solar leasing program in Africa. Off-Grid provides consumers with cheaper, reliable electricity without the expense of connecting to the larger grid infrastructure. Additionally, Off-Grid has proven to be particularly innovative by incorporating a mobile payment platform to double-down on the leapfrog effect and enable remote customers to pay for their electricity from their phones.

Continued investment and development of renewable energy sources in Africa could change the lives of millions of Africans living in poverty. When millions who currently go without electricity are able to receive a greater share in the electrical wealth  the rest of the world  experiences, the possibilities for exponential growth and development are likely to be life-changing.

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