ZIMBABWE ELECTRICITY SHORTAGEAccording to the International Energy Agency, Africa is set to quadruple its energy generation by 2040 to 385 GW. This means that over 950 million people will have access to electricity throughout the continent.

However exciting this news there are some hurdles yet to overcome such as whether the systems put in pace will be able to cope with the demands placed on them.

While economies too are poised to quadruple in size, the population is estimated to double (to 1.75 billion) and energy demand grow by around 80% in the New Policies Scenario. The hope is that the capacity and efficiency of the system improves, and access to modern energy services grows; but experts say many of the existing energy challenges will only be partly overcome.

The sub-Saharan power system is forecasted to expand rapidly and in good news, almost half of the growth in electricity generation in 2040 will come from renewables. Total power sector investment is set to average about $46 billion per year, with just over half of it in transmission and distribution.

Urban areas should experience the largest improvement in the coverage and reliability of centralised electricity supply. Elsewhere, mini-grid and off-grid systems are estimated to provide electricity to 70% of those gaining access in rural areas. A cumulative investment of more than $200 billion from various governments, agencies and corporations should lower the total without access by 15%: a major step forward, but not far enough, as it will still leaves 530 million people in the region, primarily in rural communities, without electricity in 2040.

Nigeria is currently the richest resource centre of the oil sector, but regulatory uncertainty, militant activity and oil theft in the Niger Delta are deterring investment and production. The value of the estimated 150 thousand barrels lost to oil theft each day – amounting to more than $5 billion per year – would be sufficient to fund universal access to electricity for all Nigerians by 2030.

A host of smaller producers (such as South Sudan, Niger, Ghana, Uganda and Kenya) are bound to see rising output; but, by the late 2020s, the International Energy Agency predicts that production in most countries – with the exception of Nigeria – will be in decline. Additions and upgrades to refining capacity mean that more of the region’s crude supply will be processed locally. With regional production falling back from above 6 million barrels per day (mb/d) in 2020 to 5.3 mb/d in 2040, but demand for oil products doubling to 4 mb/d – an upward trend amplified in some countries by subsidised prices – the result might see a squeeze on the region’s net contribution to the global oil balance.

3D Electric powerlines over sunrise

In further good news for the sector in 2014, 27 private-sector partners have come together to form “Beyond the Grid” – a new Power Africa initiative to unlock investment and growth specifically for off-grid and small-scale energy solutions.

Power Africa was launched in 2013 to double access to electricity in sub-Saharan Africa – electricity needed for students to succeed, businesses to thrive, and African economies to grow. The challenge is greatest beyond the electric grid serving dense urban populations. More than 240 million people live without electricity in rural and peri-urban communities across the six Power Africa focus countries. Too many do not even show up on government plans to expand the grid over the next decade.

But, bolstered by the falling cost of renewable energy generation; rapid advances in energy storage, smart meter, and  mobile payment technologies; and innovative business models, new distributed energy companies are now delivering clean, reliable energy in Africa at a competitive price point. While the market is still young, it holds great promise to follow the mobile phone in leapfrogging centralized infrastructure across Africa.

Beyond the Grid will double down on Power Africa’s support for this potentially game-changing sector, building on more than 25 small-scale energy projects already in the Power Africa pipeline. Beyond the Grid’s 27 founding partners – including impact investors, venture philanthropists, clean-energy enterprises, and practitioners – have committed to invest over $1 billion over the next five years to seed and scale distributed energy solutions for millions of African homes, businesses, schools, and other public facilities.

Examples of commitments to date include:

  • Acumen commits to invest up to $10 million in 5-10 enterprises serving off-grid markets in multiple Power Africa countries.
  • Capricorn Investment Group commits to invest in companies providing solar power, hybrid power systems, mini-grid installations, energy storage systems, and mini-hydro power systems, expanding from Tanzania and Nigeria to two additional Power Africa countries.
  • Gray Ghost Ventures commits to raise $50 million for early-stage equity investments, to build on current investments including in Beyond the Grid partner d.light, which independently commits to deliver solar-powered lighting and energy products to more than 100 million Africans over the next five years.
  • Khosla Impact commits to build on equity investments in Beyond the Grid partners BBOXX and SunFunder with investment, strategic assistance, and connections for two-three additional businesses that expand the access and affordability of solar products for African consumers; catalyze at least $10 million in debt from co-investors; and take investee companies to profitable scale within five years.
  • Mosaic commits to crowdsource $125 million in debt for small-scale energy service providers in Power Africa countries over the next five years, delivering power to 10 million users and a financial return to investors.
  • Schneider Electric commits to train 1,000 Africans in energy-related trades every year. Building on the Schneider Electric Energy Access fund – which included an investment in Beyond the Grid partner Fenix International – Schneider Electric also aims to raise up to $80 million for a new impact investment fund dedicated to off-grid energy SMEs in sub-Saharan Africa over the next five years.
  • Solar Sister commits to expand its last mile distribution network of women entrepreneurs with successful clean energy micro-businesses in order to provide energy access to over 400,000 African households over the next five years.

The Power Grid project join in the rush to harness the electricity sector in Africa.  In 2013, news broke of a giant new hydro project on the Congo River, the latest in a rush of massive dams being built across Africa. While critics contend small-scale renewable energy projects would be a far more effective way of bringing power to the hundreds of millions of Africans still without electricity, the fact is all this this energy (no pun intended) towards providing power to what was otherwise a dark (lit) continent, is good news. Inspite of Africa’s current challenges – such as ebola, the growing threat of terrorism and inept governments – the future is looking bright.

—————–

Sources:

Power Africa Beyond Grid – http://www.whitehouse.gov

The WEO Africa Energy Outlook Factsheet 2014 – http://www.iea.org

 

Leave a Reply

Your email address will not be published.