Renewable energy in East Africa

Posted on February 1, 2017 01:32 am

East African countries have the opportunity to develop renewable energy giving them an economic advantage much greater than that they have gained from fossil fuels. For that to happen, harvesting East Africa’s renewable energy potential needs disruptions in ways energy is generated, distributed and sold. This means allowing and incorporating more independent, household-based, or community-owned renewable energy systems in the energy landscapeIn East Africa, this entails the fracturing of the traditional means of energy generation strongly held by large, utility-scale energy corporations like TANESCO in Tanzania, UMEME in Uganda and Kenya Power and Lighting in Kenya. Such processes of disruptions could economically benefit many, especially ordinary families, who could invest individually or collectively in these new businesses. At the same time, these disruptions could facilitate the rapid transition to renewable energy systems, which benefit the regional climate.Disruptions through widespread support of small-scale enterprises made other countries transition to sustainable energy possible and quick. The regional economies could make renewable energies a reality by building an industry that supplies the renewable and energy efficiency market that could include assisting the migration of energy intensive industries to renewables and also harnessing the trade of renewable energy commodities.The shift to renewable energy while largely a democratising force will bring advantages to East African countries. The value associated with renewable energy is largely accounted for by the harvesting equipment, with very little ongoing costs and zero fuel costs. This is completely different to fossil energy where the majority of the value is in the ongoing consumption of fuel.As a result, the opportunity to capitalise on supplying renewable energy and efficiency equipment will be confined to the period of the transition and then it will recede.This opportunity is based on innovation rather than natural resources.

Considering that energy harvesting equipment is commonly available to all East African countries, advantages will accrue to the region with higher quality renewable energy resources and a greater harvesting territory in relation to their domestic energy needs.Progressive environmental policies are key to set the stage for transitioning to renewable energy. Other countries have done it through building efficiency standards, financing for building retrofits, solar roofs and the first feed-in tariff program. Collectively, these policy actions have helped establish a sustainable energy economy.The biggest driver of energy transition, however, has been renewable energy laws. In some of which am familiar with, the laws have feed-in tariff that time that guarantee full cost compensation to cover the actual cost of specific renewable energy investments. Some also requires utilities to purchase renewable energy first, while offering rates guaranteed for minimum of 10 years. That is what is happening in Kenya with Lake Turkana Wind Project that is partly financed by Google.Altogether, such law provisions provided investment security for investors in Kenya. Over the past three years in Tanzania, Uganda and Kenya, there has been rates drop for newly installed systems to put price pressure on manufacturers to lower costs as the market increases for renewable energy.Kenya’s feed-in tariffs have helped produce community ownership, which simultaneously increased acceptance levels for renewable installations in local areas. Indeed, as energy generation was opened up for more democratic engagement, citizen organised and managed energy co-ops to generate renewable energy have mushroomed in the region. In Uganda, the local government leadership has been essential in the transition. Throughout Africa, many governments have set ambitious climate reduction goals showing that leading the transition to renewable energy is not only possible but also profitable.

If experience elsewhere is considered, the energy generation landscape in East Africa strongly held by energy oligopolies now can be disrupted in at least three ways namely guaranteed policy and pricing mechanisms like Kenya has done, democratising energy and local government leadership like Uganda is doing. Sadly, however, East African governments remain shortsighted in making and producing the necessary change in policy to ramp up the transition to a sustainable energy economy. Policies to support small scale renewable energy are either fragmented, or not clearly communicated. In comparison, conventional utilities and large-scale generators enjoy the strongest policy support. Incentives still favour utilities like Uganda Electricity Generation Company and KenGen in Kenya, leaving small-scale investments with less to zero support that is mostly hard to access.Since renewable energy is locally harvestable, local governments should be expected to be the first port of call for renewable energy investors. Institutional arrangements to shore up renewable energy investors, however, are conspicuously absent among East African governments, especially at the local level. This confluence of ill-conceived support challenges many community-oriented renewable energy installations. As a result, much needed financing is hard to come by.From being a niche investment, small-scale renewables in East Africa have to be scaled.As for energy intensive industries, the economics of renewable energy will trigger a migration of this secor, in search of lower production costs for a competitive edge.East African countries can attract these businesses with their abundant, low-cost energy as well as complementary industries. Trade-able renewable energy commodities such as biofuel, hydrogen or transmitted electricity can additional energy intensive industries of the renewable energy era.And for the region, abundant, low-cost renewable energy and land availability make it a perfect fit.

Contador Harrison