Kandeh Yumkella, U.N. Special Representative for Sustainable Energy, believes that Africa should focus on small and more decentralised renewable energy options that could quickly reach rural energy-poor citizens instead of waiting until funding is obtained for big renewable energy projects. Credit: Wambi Michael/IPS

By Wambi Michael
ABU DHABI, Jan 22 2015 (IPS)

Diversification of Africa’s electricity sources by embarking on renewable energy solutions – such as solar, wind, geothermal and hydro power – is being heralded as a solution to the continent’s energy poverty.

But although a number of countries are already reaping benefits from investment in renewables, there is concern that many of the countries are yet to exploit those resources.

African ministers and delegates at the Abu Dhabi International Renewable Energy Conference in Abu Dhabi from January 15-17 noted that a mere handful of countries in the continent are tapping into renewable energy resource.“People don’t have to wait in darkness before the big projects come. We can have those solutions out today because the technologies are there. It is about markets and the spreading out of off-grid” – Kandeh Yumkella, Special Representative of the U.N. Secretary-General for Sustainable Energy

Some of the bottlenecks identified included lack of finance, lack of interest from investors and the desire by some to take on mega projects that could easily fail to attract private investors.

Davis Chirchir, Kenya’s Cabinet Secretary for Energy, told IPS that for many sub-Saharan Africa countries, accessing financing for fossil fuel projects was much easier compared with renewable energy options. “It is a big problem even when the prices for renewable energy solutions like solar and wind are going down” said Chirchir, whose country is now seeing costs reducing as a result of investing in geothermal energy.

Kenya plans to generate up to three gigawatts (3GW) of power from geothermal energy alone from its Rift Valley area.

Chirchir said that despite the long-term benefits, many of the countries in the region lacked their own initial resources for investment in projects.

“While renewable projects are often cheaper, they tend to require up-front capital costs. So for many, we shall require more targeted financing if we are to kick off many from the ground,” said Chirchir.

“In Kenya, our investment in geothermal energy displaced some 65 percent of fossil fuels, and brought down the cost to the customer by about 30 percent,” he added.

Kandeh Yumkella, Special Representative of the U.N. Secretary-General for Sustainable Energy and CEO of the Sustainable Energy for All initiative, decried the fact that despite the declining costs of generating energy from renewable energy sources, Africa was consuming only one-quarter of global average energy per capita.

“How do we help the majority of people in Africa that rely on charcoal and cow dung for their primary needs? How do we do that? This is where the context of off-grid really comes in,” he suggested.

According to Yumkella, Africa should focus on small and more decentralised renewable energy options that could quickly reach rural energy-poor citizens instead of waiting until funding is obtained for big renewable energy projects.

“Sometimes the project preparation costs before the investments come are about three to ten percent of project costs. For many African countries that is a lot of money. It takes a big time to get the big projects under way,” he noted.

For Yumkella, African governments urgently need to put in place policies that would support renewable energy power generation using private investments to construct off-grid power stations, especially in areas where it is hard to reconnect to the main grids.

“We can have millions of energy entrepreneurs spreading the off-grid solutions while we wait for the big projects to take off,” he explained. “People don’t have to wait in darkness before the big projects come. We can have those solutions out today because the technologies are there. It is about markets and the spreading out of off-grid.”

Furthermore, said Yumkella, off-grid solutions would support Africa’s social development agenda at the community level and “that can be done now because off-grids can be in the hands of the poor communities to increase their productivity and help their social development.  But we will need millions of entrepreneurs in Africa in order to make energy poverty history.”

According to the International Renewable Energy Agency (IRENA), even with available renewable energy potential, Africa still has the lowest rate of rural electrification compared with other continents.

Globally, over the last two decades, rural electrification has increased from 61 to 70 percent but there are large disparities in rural access rates – in sub-Saharan Africa, for example, that rate is just 18 percent compared with over 70 percent in developing Asia.

IRENA says that Africa needs to double its rate of expansion of rural electrification and change the way it approaches rural electrification for it to achieve the universal electricity access for all target by 2030.

“And in this expansion, it is estimated that about 60 percent of additional generation will come from stand-alone and mini-grid solutions, with most of it being renewables because they can tap into locally available energy resources,” said Rabia Ferroukhi, IRENA Deputy Director in charge of Knowledge, Technology and Financing.

Adnan Z. Amin, Director-General of the International Renewable Energy Agency (IRENA), believes that all African countries can reduce their dependence on fossil fuels and leapfrog into a sustainable future. Credit: Wambi Michael/IPS

Meanwhile, African energy ministers and delegates at the Abu Dhabi renewable energy conference called on IRENA and countries with greater knowledge in renewable energy to help them in supporting the Africa Clean Energy Corridor initiative.

This initiative encourages the deployment of hydro, geothermal, biomass, wind and solar options from Cairo to Cape Town to increase capacity, stabilise the grid, and reduce fossil fuel dependency.

Ethiopia, one of the countries already investing in renewable energy, especially in wind, geothermal and hydroelectric power, is one of the proponents of financing for the Clean Energy Corridor.

The country plans to generate 800 megawatts of wind power, 1 gigawatt of geothermal power and is constructing a 6,000 MW hydroelectric plant, which will be the largest such facility in Africa costing about 4.8 billion dollars.

Ethiopia’s Water, Irrigation and Energy Minister, Alemayehu Tegenu, told IPS that, if implemented, the Africa Clean Energy Corridor would help to advance renewable energy solutions to the corridor.

Adnan Amin, the Director-General of IRENA, told IPS that the Africa Clean Energy Corridor has gathered strong political support and engagement from within Africa and at the level of the United Nations.

“We have to make sure that we have regional programmes that can support countries to move in the clean direction and this is the concept behind our African Clean Energy Corridor,” said Amin.

“We want to interconnect African markets, create a larger regulated market, because when you have big markets, you can have big projects that pass the technology forward.”

With smart planning and prudent investment, Amin believes that all African countries can reduce their dependence on fossil fuels and leapfrog into a sustainable future.

Edited by Phil Harris    

Africa is experiencing a revolution towards cleaner energy through renewable energy but the story has hardly been told to the world, says Achim Steiner, Executive Director of the United Nations Environment Programme (UNEP).

Steiner, who had been advocating for renewable energy at the U.N. Climate Change Conference in Lima, said Africa is on the right path toward a low carbon footprint by tapping into its plentiful renewable resources – hydro, geothermal, solar and wind.

Achim Steiner, UNEP Executive Director. Credit: Wambi Michael/IPS

“There is a revolution going on in the continent of Africa and the world is not noticing it. You can go to Egypt, Ethiopia Kenya, Namibia, and Mozambique. I think we will see renewable energy being the answer to Africa’s energy problems in the next fifteen years,” Steiner said in an interview with IPS.

Sharing the example of the UNEP headquarters in Nairobi, Kenya, Steiner told IPS that the decision was taken that “if UNEP is going to be centred with its offices in the African continent on the Equator, there can be reason why we are not using renewable energy. So we installed photovoltaic panels on our roof which we share with UN Habitat, 1200 people, and we produce 750,000 kilowatt hours of electricity every year, that is enough for the entire building to operate.”

He noted that although it will take UNEP between eight and 10 years to pay off the installation, UNEP will have over 13 years of electricity without paying monthly or annual power bills. “It is the best business proposition that a U.N. body has ever made in terms of paying for electricity for a building,” he said.

According to Steiner, the “revolution” is already happening in East Africa, especially in Kenya and Ethiopia which are both targeting renewable energy, especially geothermal energy.

“Kenya plans to triple its electricity generation up to about 6000 megawatts in the next five years. More than 90 percent of the planned power is to come from geothermal, solar and wind power,” he said. “If you are in Africa and decide to exploit your wind, solar and geothermal resources, you will get yourself freedom from the global energy markets, and you will connect the majority of your people without waiting for thirty years until the power lines cross every corner of the country” – Achim Steiner, UNEP Executive Director

Kenya currently runs a geothermal power development corporation which invites tenders from private investors bid and is establishing a wind power firm likely to be the largest in Africa with a capacity of 350 megawatts of power under a public-private partnership.

In Ethiopia, expansion of the Aluto-Langano geothermal power plant will increase geothermal generation capacity from the current 7 MW to 70 MW. The expansion project is being financed by the Ethiopian government (10 million dollars), a 12 million dollar grant from the Government of Japan, and a 13 million dollar loan from the World Bank.

Renewable energy has costs but also benefits

Phillip Hauser, Vice President of GDF Suez Energy Latin America, told IPS that geothermal power is a good option for countries in Africa with that potential, but it comes with risks.

“It is very site-dependent. There can be geothermal projects that are relatively cost efficient and there are others that are relatively expensive. It is a bit like the oil and gas industry. You have to find the resource and you have to develop the resource. Sometimes you might drill and you don’t find anything – that is lost investment,” Hauser told IPS.

Steiner admitted that like any other investment, renewable energy has some limitations, including the need for upfront initial capital and the cost of technology, but he said that countries with good renewable energy policies would attract the necessary private investments.

“We are moving in a direction where Africa will not have to live in a global fuel market in which one day you have to pay 120 dollars for a barrel of crude oil, then the next day you get it at 80 dollars and before you know it, it is doubled,” he said.

“So if you are in Africa and decide to exploit your wind, solar and geothermal resources, you will get yourself freedom from the global energy markets, and you will connect the majority of your people without waiting for thirty years until the power lines cross every corner of the country,”Steiner added.

A recent assessment by the International Renewable Energy Agency (IRENA) of Africa’s renewable energy future found that solar and wind power potential existed in at least 21 countries, and biomass power potential in at least 14 countries.

The agency, which supports countries in their transition to a sustainable energy future, has yet to provide a list of countries with geothermal power potential but almost all the countries around the Great Rift Valley in south-eastern Africa – Uganda, Ethiopia, Kenya and Tanzania among others – have already identified geothermal sites, with Kenya being the first to use a geothermal site to add power to its grid.

Adnan Amin, Director-General of the International Renewable Energy Agency (IRENA). Credit: Wambi Michael/IPS

IRENA Director-General Adnan Z. Amin told IPS that the agency’s studies shows that not only can renewable energy meet the world’s rising demand, but it can do so more cheaply, while contributing to limiting global warming to under 2 degrees Celsius – the widely-cited tipping point in the climate change debate.

He said the good news in Africa is that apart from the resources that exist, there is a growing body of knowledge across African expert institutions that would help the continent to exploit its virgin renewable energy potential.

What is needed now, he explained, is for countries in Africa to develop the economic case for those resources supported by targeted government policies to help developers and financiers get projects off the ground.

The IRENA assessment found that in 2010, African countries imported 18 billion dollars’ worth of oil – more than the entire amount they received in foreign aid – while oil subsidies in Africa cost an estimated 50 billion dollars every year.

New financing models for renewable energy

According to Amin, renewable energy technologies are now the most economical solution for off-grid and mini-grid electrification in remote areas, as well as for grid extension in some cases of centralised grid supply.

He argued that rapid technological progress, combined with falling costs, a better understanding of financial risk and a growing appreciation of wider benefits mean that renewable energy would increasingly be the solution to Africa’s energy problem.

In this context, Africa could take on new financing models that “de-risk” investments in order to lower the cost of capital, which has historically been a major barrier to investment in renewable energy, and one such model would include encouragement for green bonds.

“Green bonds are the recent innovation for renewable energy investments,” said Amin. “Last year we reached about 14 billion dollars, this year there is an estimate of about 40 billion, and next year there is an estimate of about 100 billion dollars in green finance through green bonds. Why doesn’t Africa take advantage of those?” he asked.

During the conference in Lima, activist groups have been urging an end to dependence on fossil fuel- and nuclear-powered energy systems, calling for investment and policies geared toward building clean, sustainable, community-based energy solutions.

“We urgently need to decrease our energy consumption and push for a just transition to community-controlled renewable energy if we are to avoid devastating climate change,” said Susann Scherbarth, a climate justice and energy campaigner with Friends of the Earth Europe.

Godwin Ojo, Executive Director of Friends of the Earth Nigeria, told IPS that “we urgently need a transition to clean energy in developing countries and one of the best incentives is globally funded feed-in tariffs for renewable energy.”

He said policies that support feed-in tariffs and decentralized power sources should be embraced by both the most- and the least-developed nations.

Backed by a new discussion paper on a ‘global renewable energy support programme’ from the What Next Forum, activists called for decentralised energy systems – including small-scale wind, solar, biomass mini-grids communities that are not necessarily connected to a national electricity transmission grid.

(Edited by Phil Harris)