International Business Festival 2018




Contributed by DWF Law
25 April 2018

Exciting innovations are transforming the global energy sector. But will Africa bypass traditional energy infrastructure and head straight for off-grid renewables?

Many commentators have described modern Africa as the 'leapfrog' continent.

For years, there has been growing excitement about Africa's potential to sidestep some of the high-cost technological 'intermediate stages' across a number of sectors.

The African 'mobile revolution', which eliminated the need for expensive fixed telecom lines and moved the continent directly into the mobile-enabled world, is credited with creating this belief.

In a similar vein, many commentators now believe that Africa is primed for a new energy revolution, bypassing decades of energy infrastructure expenditure and creating a renewable, off-grid energy system.A mini-grid in Sidonge, KenyaThroughout the past decade, there have been substantial advancements in renewable and off-grid energy technology. These have not only dramatically reduced cost but increased the availability of 'plug and play' energy solutions that could benefit the disconnected rural communities in Africa, in a way not previously possible.

For these and many more reasons, there is a growing belief that Africa may be able to 'leapfrog' not just one era of electrical generation but two, skipping an absolute reliance on fossil fuels and - in a number of locations - the very need for a formal electricity grid.

International Energy Agency executive director Fatih Birol has claimed: "When it comes to Africa, I think we will see something for the first time; namely, Africa will bring electricity to people by mainly using renewable energy and natural gas."

Current estimates are that more than 600 million people in Africa are without a source of electricity, intermittent or otherwise. To some commentators, this lack of continuous energy supply costs Africa 2-4% GDP growth per year. Even in the major cities, large businesses are often reliant on expensive back-up generators during blackouts.Workmen install a home solar system

Africa has proven to be an adopter of a number of innovative systems and projects, cultivating a growing belief in the continent's ability to 'leapfrog' to renewable energy and off-grid systems.

Take, for example, the 1,322MW Ingula pumped-storage hydro scheme in operation in South Africa. When the Grand Renaissance Dam, currently under construction in Ethiopia, is completed it will more than quadruple the country's current electricity-generating capacity to about 8,700MW.

Perhaps the biggest innovation has arisen in the approach to infrastructure finance - developing unconventional means of either generating the initial capital expenditure, or absorbing some of the initial cost to the consumer.

Companies such as TRINE (a Swedish crowd-funding initiative) have brought affordable finance to off-grid solar energy companies that distribute solar home systems to be paid in monthly instalments.

M-Kopa has created "pay-as-you-go" payment models for rooftop solar PV – linked to the consumer’s mobile phone network to allow for easy, affordable off-grid electricity. This system has electrified more than 600,000 homes, with an average revenue per user of only $15 per month.

These large scale projects, combined with economical and geographical advantages in the continent, such as; cost of land, climate and a number of pre-existing non-powered dams that can be retro-fitted with hydroelectric capability, demonstrate that Africa has potential to create a sustainable renewable energy system, reducing reliance on current fossil fuel sources and the detrimental effect of intermittency.

While renewable and off-grid sources have the potential to bring electricity to a cross-section of Africa, there is a need to expand power generation across the continent in the most reliable, efficient and cost-effective manner.

Due to availability and cost, natural gas is likely to feature heavily in Africa's energy mix. However, Africa has a huge opportunity to scale up natural gas production, in conjunction with adopting a range of renewable energy sources, curbing global emissions and establishing itself as an adopter of new energy-generating methods in a way inconceivable only a few years ago.

Words: Andrew Clough. Images: TRINE

* Renewables in Africa: A Market Opportunity - Knowledge Hub, June 14. Around 625 million people across the continent of Africa live outside the reach of tradition power grids. Discover the enormous business opportunity that bringing renewable energy to these people presents. Brought to the Festival by DWF Law.

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