Africa Renewal (United Nations)
Mary Kimani
4 November 2008
(Page 3 of 3)
To expand access for the poor, a change in approach is needed, Mr. Babu argues. "What are needed are smart subsidies, to facilitate connection to the grid and for those with lower levels of consumption." Most Africans, except the very poor, are willing to pay for electricity, he notes, since they already pay for candles, kerosene, firewood and other sources of power. Expanding access will thus mean reducing the costs of connection, while ensuring that the better off pay more for their electricity use. That would provide utilities with the resources to maintain their systems.
Small businesses are often willing to pay a little more than the current rate, if that would enable utilities to maintain power and avoid periodic blackouts, which can inflict serious losses on business activities. So instead of keeping electricity prices artificially low, Mr. Babu argues, governments would be better advised to use a tiered system of charges.
Kenya is already experimenting with such an approach. Poorer sectors of the community that consume less pay a lower rate than middle-income sectors that consume more. Industries and large businesses pay rates that increase steadily with their level of usage. These power revenues enable the government to subsidize grid connection fees.
In addition, the Kenyan government has opened the generation of electricity to private companies, which compete to sell power to the government-run transmission utility. That has increased the power supply and ended the blackouts that were common in the late 1990s. The government has also sold shares in its transmission company and main power producer, increasing public scrutiny and pressure for better performance.
In South Africa, the government supplies free basic electricity services to the poor in selected areas. Those not connected to the electricity grid, but who use alternative fuels, such as solar power, are granted about $6 a month to help defray the costs of maintaining and operating such systems. But these subsidies do not come cheap. They cost the government nearly $78 mn a year, raising questions about their sustainability.
Cleaner power for Africa's development
Sub-Saharan Africa's energy crisis comes at a time when the world is grappling with climate change. The region therefore needs to adopt solutions that move in the direction of cleaner energy. Currently, the bulk of Africa's electricity is produced from thermal stations, such as coal plants in Southern Africa and oil-fired generators in Nigeria and North Africa. Coal and oil generation contribute to carbon emissions, environmental degradation and global warming. "We need to look at these issues," says Mr. Ram Babu of the African Development Bank (ADB).
Africa exploits only 8 per cent of its potential for hydroelectric power, one of the cleanest forms of energy available. The Democratic Republic of the Congo alone has the third largest hydroelectric potential in the world, after China and Russia, but less than 6 per cent of its population has access to electricity.
Yet developing more hydropower will be of limited use in areas where climate change and increasing drought have reduced the flow of rivers and waterfalls. There are other options, according to the International Energy Agency, such as harnessing the natural gas now burned off as waste in Nigeria and the rest of the Gulf of Guinea, which could meet a substantial share of Africa's power needs.
Projects such as the Mmamabula coal project in Botswana are potentially large sources of carbon emissions, but CIC Energy, the company behind the project, intends to produce gas from coal, including methanol. "Methanol can be used as a cheaper and cleaner fuel substitute for small diesel-fired power plants in Africa," says a company statement. The plant will also look at ways of converting the heat produced during production into steam power.
In East Africa, geothermal energy (produced from volcanic heat) is a potential source of clean and reliable power. Kenya, the first African country to build a geothermal plant, is revamping the facility and adding wells to raise geothermal production to 25 per cent of the country's total current power output.
Alternative sources of power would be especially useful in areas where there is no electricity grid. But they are not cheap. A joint report by the UN Industrial Development Organization (UNIDO) and the UN Economic Commission for Africa (ECA) found that $4 bn would be needed annually to raise household access to electricity in sub-Saharan Africa to 35 per cent by 2015 through methods, such as solar power, that do not require connection to a grid.
Mr. Babu notes that the ADB is trying to raise funds to help countries research and install alternative forms of energy, including solar. But such alternatives will be insufficient on their own, argue UNIDO and ECA. They estimate that even if Africa could spend $4 bn annually until 2030, that would only achieve an overall household electrification rate of 47 per cent. Getting to self-sufficiency in power, with clean energy, says Mr. Babu, will require a combination of donor aid, private investment, greater regional integration and more reforms in the management of power utilities.
Read comments. Write your own.
Copyright © 2008 Africa Renewal. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
The same problems of poor governance that bedevil African countries spill over into the power sector. The power development, management and operations are now all subject to political patronage so that the people who run these organizations do so not because of their technical or managerial skills and aptitude but because they have political connections.
All politicians are interested in is getting their village(s) connected to the national grid, which is run by their counsins regardless of whether the cousins are qualified.
In that kind of environment it is not only hard to attract invest it is also impossible to invest resources effectively and efficiently. The Congo River is one source of power that is still has remain a pontential that is only referred in terms of future and not in the terms of needs of today. The power sector needs the same openess in its development and management as in the political arena. As for the losses in power - even in the USA the power loses amount to 67 % percent - this is a technical problem that power industry has still to overcome in terms of designing smart power grid. Fortunately it is gaining some traction especially in the light of concerns of global warming.
It is even hard to formulate a much needed future agenda on energy namely: renewables (solar, wind, geothermal, and biomass) and yes nuclear. Africa has the unranium and plotonium.
The corrupt and tyrantic governments have rendered Africa strved of energy and powerless.
The line loses can be overcome by building smart power grids, which are becoming ever possible with telecommunications and computer technologies that are becoming ever cheaper, IF the governance improves concomitantly that is.
I wish to commend the author for this important topic - Powering Up the Continent's Economies.
For the past decade or so many African policy makers, NEPAD, UNIDO etc and their World Bank advisors have promoted the concept of the grand African interconnection grid as the ultimate answer to Africa's chronic energy problems. Unfortunately the this idea though well intended is largely a fallacy and goes against current research in energy economics. The idea was initially anchored by a model from Purdue university. Apart from the fact that the model was from a wrong Western context, even the West are now systematically abandoning it. The most important point is that transportation of electric energy is extremely expensive. Delivery economics for electricity is very different from gas or water. Yes, it is important to extend the grid network everywhere to serve high quality loads like health, education and communication services. These are moderately sized loads and require moderate size infrastructure. But large industrial loads must always be constructed close to generation source to be sustainable. With inter-regional common markets evolving this should be easy to understand. Take Tete province in Mozambique for example. It's complete madness generating power from Cahora Bassa dam and taking it 1500 km to South Africa through a very costly network and losing hundreds of megawatts on the way. The only sensible thing would be to build an industrial base in the Zambezi basin itself. It would be cheap and require no maintenance on the grid. The concept of Southern African Power Pool sounds great but when you understand that even South Africa straggles to deliver adequate power from Johannesburg to Cape Town then you would begin to understand my point. Africa is only plaaning its industry now. So they have a chance to plan and locate it inthe right places.