Renewable energy sector in Africa

June 24, 2016

Africa has the second highest population outside of Asia which means demand for energy will continue to grow.There’s no single country in the continent that doesn’t suffer from power shortages. For the continent to address the growing challenge of load shedding, energy production must shift from fossil fuels to renewable sources within the next two decades to avoid the most damaging consequences of climate change.A study on the state of the sustainable energy market shows that Africa has world-class solar and wind energy resources in many parts of the continent, adding that investment in solar photovoltaic and wind energy infrastructure could help create jobs, reduce air pollution and save consumers money. Solar PV and wind could be the cheapest forms of power in Africa for retail users by 2030, if not earlier, as carbon prices rise. While South Africa has the most installed renewable energy infrastructure and is the sector’s biggest investor in whole of Africa, Turkana wind project expected to be completed next year around June its energy per capita will be higher than any major country in Africa. Wind is now contributing approximately 5% of Africa’s total electricity production as of December 2015 estimates.

The investment in renewable energy reached almost $20 billion in 2015 in Africa. A renewable energy future is inevitable and we are headed in that direction worldwide. With these renewable technologies, they are only going to get cheaper and cheaper. However, African countries need to discuss the barriers to renewable energy sector growth in the region, which include fossil fuel subsidies to the tune of over $40 billion a year in North Africa and Nigeria. Obviously, they are trying to put a rosy glow on the situation to avoid criticising federal and state governments but since the oil prices went downwards, those countries have been grappling with spiralling debts and plummeting revenues. While the continent’s largest non mineral economy, Kenya government offers real incentives to expand the solar market unlike other countries that are still focusing on fossils energy. The private sector in the country is also funding medium scale renewable energy power projects.At the country level, we have seen several local governments putting in place policies to hold back renewable energy just because selfish interests of those in power haven’t been catered for. In some countries, it’s now almost impossible to build a new wind farm, so severe are the restrictions on siting.

Some national governments have also cut back on feed-in tariffs for residential renewable energy with a good example being Uganda that revised its tariffs downwards last year.I hold the view that 100% renewable energy systems using wind, solar and biomass could supply Africa’s electricity market with the same reliability as the existing polluting system. But that can only be achieved if the grid parity for rooftop-mounted photovoltaics can be reached throughout Africa for both domestic and commercial retail consumers. Photovoltaic and wind power are likely to be Africa’s main sources of new energy generation capacity for decades to come and parity with the cost of wholesale electricity from new gas or coal fired power stations is likely to be achieved by both wind and solar this decade.My view is that the traditional African electricity industry is under severe pressure from Photovoltaic and wind, the implementation of energy efficiency measures, and falling demand. The industry may choose to cope by attempting to keep Photovoltaic out of the market place. Alternatively, it could embrace Photovoltaic, wind and energy efficiency and rapidly transform itself. Large changes are required in both infrastructure and tariff structures as the industry rapidly transforms to clean distributed generation from thousands of wind generators and millions of rooftop Photovoltaic systems.

Contador Harrison