Published: June 8th 2019
Renewable Energy In Africa: Reality Check
Published: June 8th 2019
This article is republished from The Conversation under a Creative Commons license.
Contextualising The Energy Infrastructure Deficit In Sub-Saharan Africa
A lack of access to stable and sufficient electricity supply is a well-documented issue in Sub-Saharan Africa (SSA). It is estimated that more than 620 million people across the region do not have access to electricity and those who do are exposed to high costs and supply fluctuations. Given that the provision of secure, affordable and reliable energy is viewed as a cornerstone of fulfilling Sustainable Development Goals (SDGs), the energy deficiency in SSA has negative repercussions for social and economic development in the region. To put this into context, electricity consumption per capita in SSA is almost seven times lower than the global average. In terms of the actual amount of generating capacity, as of 2016 total installed capacity across all the countries in the region – a population of around 1 billion people - was less than 100 gigawatts (GW), roughly the same as that of the United Kingdom, with a population of 66 million. This issue is exacerbated when the region’s projected energy demand is taken into consideration, driven by positive macroeconomic and demographic trends, rising industrialisation and urbanisation.
Source: EIA, UN Data
The high level of energy poverty in SSA stems in large part from the low levels of investment that has been channelled into the region’s energy sector from both private investors and state utilities. Public sector utilities in particular have been afflicted by a lack of financial resources and other capacity constraints, contributing to a cycle of underinvestment in capacity and maintenance. However, more recently that situation has started to change, in line with improving investment climates, which has resulted in greater numbers of independent power producers (IPPs) entering markets across the region, notably in the renewable energy sector.
Renewable Energy In Focus
The deployment of renewable energy is being increasingly viewed as a potential solution to reducing the energy infrastructure deficit and meeting future electricity demand in the region. In line with this, investor interest in the renewable energy sector across SSA has strengthened, supported by falling technology costs for wind and solar, more readily available financing and the implementation of regulatory frameworks by governments, such as subsidy schemes and competitive auctions. These factors have resulted in significant growth in the deployment of renewable energy capacity across the region. According to data from IRENA, renewable energy capacity in SSA (excluding hydropower) totalled nearly 8GW by end-2017, an increase from just 1.2GW in 2010. A significant proportion of this capacity has been deployed in South Africa (around 60% of the total), due to the Renewable Energy Independent Power Producer Programme (REIPPP), which was initiated in 2011. However, other countries in the region have also been successful in procuring renewable energy capacity, such as Zambia, through the ‘Scaling Solar’ initiative, Ethiopia, Kenya and Uganda, the latter via the ‘Get Fit’ programme.
The narrative that renewable energy could be a ‘leapfrog technology’ in SSA has been gaining traction. Specifically, the idea that countries across SSA will implement energy systems that rely on renewable energy from the outset, instead of following the trajectory of mature power markets, which primarily relied on fossil fuels to fulfil energy demand and drive their economic growth. It is hoped that renewable energy will follow in the footprints of mobile phone technology and financial services, which have enjoyed well-documented leapfrogging success in SSA.
Testing The Leapfrog Narrative: The Issue Of Intermittency
However, the issue of intermittency is a noticeably underappreciated risk when considering the leapfrog potential of renewable energy and the ability of variable energy sources to meet future electricity demand. An intermittent energy source, such as solar PV, fluctuates over multiple time horizons, and therefore is not continuously available for electricity generation. Without a baseload capacity in place to even out these supply fluctuations, the energy system will be left in shortfall in times of high demand. This issue of intermittency poses a particularly pertinent challenge to electricity markets in SSA given the general lack of dispatchable power capacity and very low or no reserve margin, which leaves little room for flexibility in the grid system.Considering the widely held expectation that the share of intermittent renewable energy will increase significantly in SSA’s power mix, there is a definite need for this issue to be addressed, both in literature and policymaking.
Responses To Intermittency & The Challenges Ahead
Regional electricity trading, via power pools, and energy storage systems are often heralded as two optimal solutions for the integration of renewable energy. Both approaches enable much greater flexibility in the power system, making them attractive solutions to help balance the intermittency associated with variable renewable energy sources. However, the assumption that these solutions will be in place within the SSA region in the near-future is misguided given the prohibitive costs of grid-scale energy storage (outside of rural, off-grid settings) and the widespread operational bottlenecks facing regional grid interconnectivity.
While both energy storage and regional interconnection hold significant long-term potential in the SSA region, they will not provide a near-term fix for solving the intermittency challenge. Instead, it is likely that alternative baseload generating capacity will need to be built in conjunction with renewable energy capacity to ensure stable power supply. And the decisions made by governments on what capacity will be built now will shape the domestic energy policy for years to come, given that the projects that are commissioned will likely be running across a multi-decade horizon. In line with this, there will be wider implications for domestic emissions profiles, particularly if the baseload capacity that is built is thermal-based and inadvertently results in increased emissions from the power sector. Lastly, it is possible that the financing environment in the region will undergo a shake-up, with the realisation that a mixed generation portfolio will need to be supported.