Energy

Power Up: Delivering renewable energy in Africa

May 12, 2016

Africa

May 12, 2016

Africa
Adam Green

Senior editor, EMEA

Adam is a senior editor for The Economist Intelligence Unit's thought leadership division in EMEA, focusing primarily on the Middle East and Africa. In this role, he has worked on in-depth research studies, surveys, multimedia documentaries and infographics on topics ranging from healthcare to personal finance. Previously, Adam was Deputy Editor of This is Africa, a bimonthly magazine published by the Financial Times. He also worked as Communications Officer for the International Growth Centre, a research institute based at the London School of Economics and funded by the UK Department for International Development. Adam holds a Masters in Development Studies from the School of Oriental and African Studies, with a grade of distinction, and an undergraduate degree in Philosophy and History and Philosophy of Science from the University of Leeds. His independent research and journalism has been published by the Middle East Institute.

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Following high-level declarations at the Sustainable Development Goals and the Paris Climate Conference in late 2015, there is a growing appetite for renewable energy in Africa. This is much-needed; the continent’s energy supplies are not meeting the needs and aspirations of its people. A better system will promote economic diversification, raise productivity, and improve the health and wellbeing of citizens. Africa requires between $60 and $90 billion annually to address its energy shortfall, roughly quadruple 2014 investment levels.

While fossil fuels, notably coal, oil and gas, continue to provide a significant quantity of energy - especially in South Africa - renewables need to play a greater role. Africa has plentiful resources, from geothermal power in Kenya and Ethiopia to hydropower in Zambia and the Democratic Republic of Congo. Solar and wind are especially promising, thanks to falling costs and resource abundance. From solar-powered hospitals in Lagos to wind farms in Lake Turkana, renewable energy is not just a pipe dream - it is a reality. Renewables can increase energy security, reduce energy import bills, and diversify and de-risk the energy mix. Through off-grid technologies, they can provide direct, affordable power to rural regions beyond the reach of the grid system.

But to harness renewables at scale, very significant infrastructure is needed: both core assets like wind and solar farms1 and transmission grids, as well as connective infrastructures, like roads to and from sites for transporting kit and manpower, or for bringing products, like solar-powered mobile phones, to market. This requires effective regulation, sufficient financing, appropriate technologies and smart business models. The ambitions are there.

The African Renewable Energy Initiative, led by institutions including the African Union and the United Nations Environment Programme, has set a goal of 300 GW of renewable energy capacity by 2030. But this requires a 680% increase in current deployment rates. According to IRENA’s latest data, the installed renewable power generation capacity in Sub-Saharan Africa currently stands slightly below 30 GW, roughly 25-30% of the installed power base, but this is dominated by large hydro, with other renewables collectively accounting for just 4-5% of power generation. Can the investment be achieved? Who are the current players and how is the market evolving? 

This report, combining country fieldwork and 28 expert interviews, looks at the current renewable power capacity on the continent, identifies the market leaders and looks at the key enablers and constraints. 

The Economist Intelligence Unit would like to thank the following experts for their time and insights:

Andrew Johnstone, chief executive officer, Climate Fund Managers

Dr. Tobias Bischof-Niemz, head of energy research at the Council for Scientific and Industrial Research (CSIR), South Africa

Alastair Campbell, managing director, Vantage GreenX

Benjamin Warren, global power and utilities corporate finance leader, EY

Dario Musso, senior transactor, infrastructure finance, Rand Merchant Bank, South Africa

Rentia R. Van Tonder, head, Power, Corporate and Investment Banking, Standard Bank

Reda El Chaar, executive chairman, Access Power MEA

Nico Tyabji, senior associate, Bloomberg New Energy Finance

Christophe Fleurence, vice-President, business development, Africa, EREN Renewable Energy

Timon Herzog, chief operating officer, Global Renewable Independent Power Supplier (GRIPS)

Georgios Pergamalis, head, business development, Africa and Middle East, Enel Green Power

Phylip Leferink, general manager, Lake Turkana Wind Power Ltd.

James White, senior manager, business development, SunEdison South Africa

Henning Wuester, director of knowledge, policy and finance, International Renewable Energy Agency

Alex Rugamba, director, energy, environment and climate change, African Development Bank

Damilola Ogunbiyi, general manager, Lagos State Electricity Board

Aubin Kalaidjian, founding partner, Greenwish Partners

Batchi Baldeh, head of power, Africa Finance Corporation

Abayomi Adebisi, Nigerian Federal Ministry of Power

Jorge Lopez Galera, Access Power engineer on-site, Soroti, Uganda

Dolf Gielen, director of the Innovation and Technology Center at IRENA

Michael Obale, agriculture graduate, Gulu University, Uganda

Nils de Baar, president for central europe, Vestas

Peter Nyeko, renewable energy developer, Mandulis Energy

Jasandra Nyker, CEO, Biothern l Sipho Phiri, executive chairman, Western Power

Owen Silavwe, managing director, Copperbelt Energy Corporation

Charles Mate, executive director of corporate affairs, IDC

Dr Elie Chachoua was the author of the report. Eleanor Whitehead, Will Pearson and Michael O’Hagan contributed reporting and fieldwork. Melanie Noronha developed data visualisations. Adam Green was the editor. This research was commissioned by IHS Towers, the largest provider of mobile towers in Europe, Africa and the Middle East, in support of Africa’s renewable energy goals. The Economist Intelligence Unit bears sole responsibility for the content of this report. The findings and views expressed in the report do not necessarily reflect the views of the sponsor.

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