28 January 2016

Africa: Making Powering Africa a Reality

Blog

Nearly two decades into the 21st century, energy poverty continues to cripple Africa's social and economic development. More than half of the population lacks access to electricity, and businesses that could create jobs are hampered by frequent blackouts.

The good news is that governments and investors are committed to improving the situation–and have a better chance of doing so than ever before.

On Jan. 27-29, energy ministers, investors, and financiers convened in Washington, D.C. for their annual Powering Africa summit to discuss energy sector strategies for the continent. The question is, will they help Africa make the leap to the clean and affordable technologies of the 21st century?

The leap is possible. With the recent and rapid declines in the cost of wind and solar technologies, a new electricity system paradigm is emerging that's not only low carbon, but is also cost-effective. This paradigm is uniquely well suited to the African continent.

As we've shown in a recent study for the International Renewable Energy Agency, at least two-thirds of all countries in East and southern Africa have enough wind and solar power potential to meet their full projected 2030 electricity demand. Other studies have documented a similar potential for West Africa.

Several countries have already shifted their focus toward renewables. China installed the world's largest amount of wind and solar capacity in 2014, and they likely repeated the feat in 2015. India is targeting 100 gigawatts of solar photovoltaics by 2020. As African countries rapidly expand their electricity infrastructure to meet their economic and energy access goals, they would be remiss if they didn't consider renewable options.

The continent is already showing signs of progress. In South Africa, wind and solar power have become the lowest-cost options for new power generation projects. In the past few years, 1,800 megawatts of competitively-bid wind and solar projects have come online in South Africa. These projects have not only abated the country's energy crisis, but, due to their low cost, have also saved consumers a lot of money.

Historically, investors and developers have focused on conventional generation such as large hydro and coal. The African Union's Programme for Infrastructure Development in Africa (PIDA), for example, includes 13 large hydropower dams but no wind, solar, or geothermal projects. And while projects like the Inga dam in the Democratic Republic of the Congo seem to have the potential to meet a large portion of Africa's energy needs, past experience suggests that such a large investment carries significant risks to investors, the local population, and the environment.

Even though wind and solar are the new kids on the block, they're more likely to carry lower risks in geological, political, economic, and climatic terms. Unlike large hydro and coal, wind and solar projects can be deployed quickly. According to a recent study, wind and solar projects experience average cost overruns of less than 8 percent and 2 percent respectively, compared to average cost escalations of more than 71 percent for hydropower, 120 percent for nuclear power plants, and 13 percent for thermal power generators. That's a big deal for a cash-strapped continent.

Critics claim that African electrical grids can't handle high shares of variable, intermittent energy sources like wind and solar power. And it's true that wind and solar are inherently variable and geographically dispersed. In the past, energy planners have found it challenging to integrate high shares of wind and solar into their energy systems.

In recent years, however, countries including Denmark and Germany have pioneered strategies and planning tools to effectively manage these challenges. In 2014, Germany had nearly 28 percent renewable energy generation in its grid. Denmark gets 39 percent of its energy from wind power alone.

To make this new energy system a reality for Africa, planners need to start working now. They can address the challenges with an early expansion of grid infrastructure, and by adopting smart systems operations and energy market strategies. Furthermore, smart and informed siting of renewable energy projects can minimize the variability in generation–and, at the same time, minimize the social and environmental impacts of power projects.

Electricity infrastructure investments take time, but once they're made, they endure for decades. By learning from the experiences of the early adopters of renewable energy, timely and strategic planning can minimize future costs of and impacts to electricity infrastructure and, ultimately, to consumers.

For Africa to leapfrog to a new, cost-effective, and socially and environmentally sustainable electricity future, changes that require time, talent, and funding need to happen now. These conversations can begin at the Powering Africa summit, where decisions about critical investments could make this alternative future a reality.

Grace Wu and Ranjit Deshmukh are doctoral students in the Energy and Resources Group at the University of California at Berkeley. The views and opinions of the authors expressed herein do not necessarily state or reflect those of the Regents of the University of California. This was originally published by the World Policy Institute blog.

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