One of the main economic constraints in Africa is the alarming lack of access to energy services and the significant lack of the application of renewable energy resources on a continent that has seemingly limitless potential to do so.
About 31% of the sub-Saharan African population has access to electricity.
Statistics South Africa reports that only 14% of rural communities in the country have access to electricity. With limited energy-efficiency, installed generation capacity and weak or non-existent policies and regulations, energy on the African continent has become a critical issue that needs to be addressed urgently.
Even though Africa contributes less than 4% of the worldwide greenhouse gas emissions, the continent’s economic situation causes it to be the worst affected in terms of food security, water supply, biodiversity and other climate-related sectors.
At the dawn of the new millennium, the South African Department of Energy (DoE) announced its intent to provide free basic services to indigent households. Various services, such as electricity, were identified as basic services. The programme aims to provide sufficient energy to each low-income household to meet the basic standards of living, which amounts to 50kW/h per month per household. However, many households still do not have access to an electricity grid, which means that they need to be provided with alternative energy sources.
On 30 January, the DoE briefed the Energy Portfolio Committee on the ongoing programme and identified various challenges that have been decelerating the progress of the programme. Despite common issues related to corruption and using the funds allocated for the programme for other purposes, the DoE also mentioned that many households could not be identified due to a lack of sufficient registration. The department described a lack of monitoring and communication as crucial factors in the inability to meet its targets. Another culprit in the blame-game is of course the country’s ageing infrastructure.
According to a recent article by the energy network Engerati, despite these challenges, investors continue to flock to Africa’s shores for its abundant supply of renewable energy resources.
Industry experts say that South Africa is currently the world’s most attractive renewable energy market.
According to the Bloomberg New Energy Finance research group, 2012 saw a total investment of R55 billion towards renewable energy on the continent. Additionally, South Africa had the biggest annual clean energy investment growth rate in the world in 2012, overtaking China, Japan, South Korea and a host of other economies. The country has committed to cutting its carbon emissions rate by 42% before 2025 and it has a great need for more electricity.
However impressive this growth, the reality remains that Africa will need approximately R940 billion to close the energy gap by 2030. Thus the real issue is the cost of infrastructure development and accessibility to capital, according to Norman Ndaba from Ernst & Young.
The country’s energy minister recently announced approval of $5,4 billion for 28 wind, solar and geothermal projects that will add 1,4 gigawatts (GW) of new renewables capacity to the grid by the end of 2013.
Various policy opportunities exist in terms of the way in which African societies produce, distribute and consume energy. Policies can be put in place that will allow the achievement of energy security goals in a sustainable and less carbon-intensive manner. African renewable energy resources have the potential to make a large and vital contribution to the global energy sector in its efforts to fight climate change.
Facts and figures
• There are five main forms of renewable energy: solar, wind, water, biofuel and geothermal energy.
• An amount of $4,5-billion: The worth of renewable energy projects approved by South Africa in 2012.
• A total of 45 countries globally get 60% of their electricity from renewable sources.
• A total of 13 countries globally get 95% of their electricity from renewable sources.
• Power generation from hydro, wind, solar and other resources will exceed that of gas, and will be twice that of nuclear by 2016, says the International Energy Agency (IEA).
• About 1,5 billion people in developing countries have no access to electricity.
• About 89% of people in rural sub-Saharan Africa live without electricity.
• About 46% of people in urban sub-Saharan Africa live without electricity.
• A total of 35% of South Africa’s liquid fuel is sourced from coal through Sasol.
• A total of 100% of South Africa’s natural gas production is converted into liquid fuels.
• About 11,2 million tons: the total annual demand for fuel wood in South Africa.
The Engerati analysis states that renewable energy technology has the potential to alleviate many of the problems that Africans face on a daily basis. As with most developing markets, there will always be challenges. However, Africa’s saving grace is its plentiful renewable resources which investors are scrambling to get their hands on.
Full thanks and acknowledgement are given to info.gov.za, the National Energy Regulator of South Africa (Nersa) and Engerati for the information given to write this article.