Africa is shockingly short of electricity. Nearly 600m people are without electricity altogether, while electricity consumption in Spain exceeds that of all of Sub-Saharan Africa, except South Africa.
Despite modest economic growth, countries in Africa could develop far faster and better with the help of electricity. So, too, could individual households. Africa’s poorest households are spending around US$10/kWh on lighting — 20 times more than Africa’s richest households and far more than people living in developed countries.
According to the Africa Progress Report 2015, it would take the average Tanzanian around eight years to consume as much electricity as an American does in one month.
But while the challenge may seem insurmountable, there’s plenty of hope to power up African countries, particularly through renewable energy.
According to the recent McKinsey Brighter Africa report, the continent boasts 10TW of potential energy capacity. It estimates much of this will come from solar, with a potential of 350GW of hydro, half of it anticipated from the Democratic Republic of Congo.
McKinsey has rated wind capacity at 109GW. It expects geothermal to generate only 15GW, but this will be extremely important for Ethiopia and Kenya, which hold 80% of the reserves.
Looking to the future, McKinsey forecasts that gas will account for more than 40% of the electricity generated from 2020 onward, with hydro remaining a very important technology.
Solar is expected to speed up further after 2030, representing 8% of the generation mix by 2040 and more than 30% of capacity additions between 2030 and 2040.
Coal will still be part of the energy mix, but its importance in the continent’s fuel mix will fade from 51% to 23%.
“One of the biggest challenges we have on the continent is that the planning doesn’t outlast the political office. Politicians want to be recognised, so they do short-term projects that people can see before they leave office,” says Nelisiwe Magubane, former director-general of energy and chairman of Matleng Energy Solutions. “We need to have planning that outlasts a political term.”
Senior energy consultant for Ngali Energin in Rwanda agrees: “If you’re expecting investors to put down billions, you have to put in place predictable tax regimes and stable regulations and make it practical to invest.”
The amount of money being ploughed into African megaprojects, particularly in energy and power distribution, increased by nearly 50% in 2014, according to a study by Deloitte. One of the most exciting projects was the Grand Inga Hydro Power Project, seen as a potential continental game changer. McKinsey estimates that the massive project could help save $32bn in capital spending and 65 megatons in carbon emissions.
“We are really excited that the DRC will house one of the largest hydro power projects in the world. The Grand Inga Hydro Power Project at 40GW of hydro-electricity will bring closer the realisation of Africa’s potential,” the acting CEO of Eskom, Brian Molefe recently told the PowerGen conference in Cape Town.
US President Barack Obama’s $7bn power plan, Power Africa, is also hoping to add 30GW of new and cleaner power generation over a five-year period in several countries across the continent. Power Africa is working with technical and regulatory experts, governments and companies to boost electricity.
The Africa Progress Report, generated by the Africa Progress Panel headed by former UN secretary general Kofi Annan suggests that the way forward is to build an integrated African grid, with sustainable energy at its core.
The International Energy Agency estimated that increased regional integration could cut average electricity costs by 8% on the continent and as much as 30% in some countries.
With a sharp drop in renewable technology prices, many energy planners are increasingly seeing the potential in renewable sources.
Projects are dotted throughout Africa, from one of Africa’s largest wind farms in Ethiopia to a massive boost in hydro power in Angola.
The eight leading renewable energy projects in Africa:
Kenya — Kenya is now the world’s ninth largest producer of geothermal energy. Plans envisage the doubling of capacity by the end of 2016 by expanding the Olkaria plant. Kenya is also moving ahead in developing its wind power resources.
Ethiopia — Ethiopia has tackled the impact of falling water levels in the dry season by moving into wind power. It now boasts one of Africa’s largest wind farms. The 120MW, 84-turbine farm is 780km north of the capital of Addis Ababa.
Nigeria — Oil-rich Nigeria is scaling up its solar capacity. Agreements signed in 2014 and 2015 will take the country across the 5GW threshold. Nigeria is also in negotiations with a Korean company, HQMC, about building another 10GW in capacity and establishing Africa’s first large-scale solar panel manufacturing facility.
South Africa — South Africa has been recognised for one of the fastest rates of growth in the world for renewable energy investment through its Renewable Energy Independent Power Producer Procurement programme, with projects ranging from wind and solar PV to biogas.
Mauritania — Solar energy now powers a third of energy use in Nouakchott, the capital city of this West African country, and makes up 10% of the national grid. Plans are also underway to commission a 30MW wind farm, boosting the share of renewable energy in the national energy mix to 45%.
Democratic Republic of Congo — The Grand Inga hydro power project is forecast to double Africa’s electricity production capacity, making it the world’s largest infrastructure project.
Rwanda — Ignite Power is the first part of an ambitious plan aimed at achieving universal access to clean energy coverage in Rwanda. It brings together local and international organisations and has developed a template for connecting all households on and beyond the grid.
Ghana — The world’s fourth largest solar facility is under construction in western Ghana. The $400m Nzema solar project will include 630 000 solar modules generating 155MW of power. It will add 6% to Ghana’s overall power generation. Source: Power, People, Planet – Africa Progress Report, 2015
- This column was first published on Moneyweb and is republished here with permission
