A summary of energy opportunities and issues identified at the African Utilities Week & Clean Energy Conference 12 – 14 May 2015. Africa is open for business but is it switched on?
A shortage of reliable and widely distributed energy was identified as a key stumbling block to Africa benefiting from its abundant human and material assets. This thread connected examples, small to large scale, of how unreliable energy stifled opportunities. Subsistence farmers cannot up their production without irrigating their crops and refrigeration to preserve the harvest. At the large scale, the export of energy by multinational oil and gas companies to rich overseas markets happens at the expense of expanding African oil and gas markets. Speaking for ESKOM Zethembe Khoza explained: “Six of the world’s top energy producers call Africa home, but most of the energy is exported. Take Nigeria as an example. 90% of Nigerian crude oil is exported while Nigeria has to buy back 70% of its refined oil. The country has 4 refineries operating below capacity. Nigeria could save $2billion per year by operating their refineries at capacity and exporting surplus to their neighbours. Africa needs its political leaders to develop a climate conducive to regional trade and technology …. The African Development Bank estimates that $3 trillion is needed to electrify Africa and that ONLY 3% of revenue from African oil and gas would be required to pay for this. It is time for a new deal for Africa. “
With power comes progress and Africa has abundant renewable energy. Electricity from geothermal sources for countries along the Great Rift Valley as well as hydroelectricity schemes including the Grand Inga (DRC) and the Ethiopian Renaissance Dams could provide `baseload’ electricity for vast regions – if national governments can agree to work together. There are a rapidly growing number of solar and wind `farms’ being built throughout Africa, e.g. Lake Turkana Windfarm. Wind, PV and CSP (Concentrated Solar Power) production in South Africa has already demonstrated a good financial return on the investment of clean energy.
To tap into the opportunities that renewables provide, a restructuring of electricity services is required, not just technically, but socio-politically within and beyond national borders. Is Africa up to this? Victor Kgomoeswana, articulate and informed TV business news anchor and author of Africa is open for business put these cards on the table. Quoting Kwame Nkrumah: “I am not African because I was born in Africa but because Africa was born in me,” he challenged everyone to proceed in the interests of all so that Africa may enjoy the rewards of its vast potential. His next statement, “Bribery is an equation! “ raised quizzical eyebrows until he explained. “Whether bribe giver or bribe taker, both sides of the equation are equally guilty of corruption.” Bribery at every level has to stop so that service delivery best practice can take place.
A number of speakers reminded us that Africa has an underprovided electricity service with maintenance backlogs and too many inefficient and politicised utility service providers. While large power generation serves industry and urban centres its reach does not usually extend to remote areas. Owing to the terrain and distances involved, grid tied electricity is not a cost effective way of providing remote communities with electricity. Micro grids powered with local renewables including combinations of small hydro, solar, wind and biofuels with or without batteries or back-up generators are some of the projects being implemented.
Brazil’s Light for All programme provided exciting case studies for implementing large scale electrification with very significant benefits for rural communities. From 2003 to 2015 over 3,200000 million families were provided with at least a basic electricity service. A post electrification study revealed that over two hundred thousand women subsequently initiated an economic activity to supplement their livelihood. A similar number started or resumed higher education studies. Lighting at night improved security. 10 million electrical appliances were purchased by people living in newly electrified areas. The uptake of modern appliances including fridges, stoves, washing machines and computers added to the quality of people’s lives in many ways – and drew rural people into the market economy. An unexpected outcome was a dramatic slowdown in the migration of people to cities! (speaker notes: Hugo Lamin of Brazilian Electricity Regulation Services)
Mamadou Biteye of the Rockefeller Foundation reported similar findings. “The Smart Power rollout of decentralised mini smart grids in India significantly improved the lives of 1 million people in just 3 years. “
Energy from renewable sources was acknowledged as the future. A transition to more renewable electricity sources is even easier now that the cost of electricity from renewables is already at parity with many fossil fuelled power plants. However, speakers including representatives from ESKOM, Namibian Electricity Control Board, DNV GL an IPP and Dr Komla Folly of UCT Dept. of Electrical Engineering all raised issues regarding how best to integrate renewables with traditional base load power and with existing electricity networks. Many African countries are fortunate to have hydroelectricity. However, wind and PV, while quick and cost effective to install, are the technologies that many utilities regard as problematic to integrate into their networks. The reasons include balancing baseload power during fluctuations in wind and solar and how to fund new or upgrades to transmission lines and substations to bring the power to where it is needed. Installing smart grids, localising generation and unbundling big inefficient utilities were some of the solutions discussed.
How to pay off loans for investment in electricity was one of the key themes at the African Utilities Week & Clean Energy Conference. Most speakers commented that electricity could not be a free service, but that payment needed to go hand in hand with a reliable service. This is a catch 22 for many countries that don’t yet offer a reliable supply. While business is prepared to pay for reliable electricity, in some situations cost reflective tariffs are high, and are unaffordable to poorer communities. A below cost of supply tariff for economically vulnerable consumers or a limited amount of Free Basic Electricity as offered in South Africa is part of the solution. Affordable basic electricity has significant economic benefits in terms of improved health, education, home industry etc. but does not directly benefit the electricity utility. Balancing costs and returns is exacerbated by increasing energy costs and ongoing high levels of electricity theft.
Globally electricity theft ranks 3rd after car and bank card theft. In some countries electricity theft is number 1. Until they took drastic action to address electricity losses in 2008/9, ZESCO (Zambian Electricity Supply Corporation) was suffering a 25% deficit between produced and paid for electricity, mostly from stolen electricity. While households generally account for the highest numbers of electricity defaulters, commercial and industrial organisations by far account for the most kWhs of electricity stolen. The same is true for stolen electricity in South Africa although Soweto may be on track to disprove this. A delegate from Mozambique explained that many consumers do not understand electricity services and that electrification needs to go hand in hand with processes to include and educate the communities involved. This was identified by a number of speakers as a significant factor in high levels of theft and especially vandalism.
A roll out of tamper proof smart meters, especially in urban areas, was identified as one of the solutions. Controversial because they are costly, smart metering is being marketed as an electricity management system rather than an electricity metering tool. Because they don’t just measure consumption but can also reduce the available supply to a consumer, their implementation requires a high level of consumer understanding and co-operation. When the network is under pressure smart meters can respond by reducing a consumer’s electricity supply to a basic level at peak times, thereby avoiding the need for load shedding. Smart meters can also reduce or switch off feed -in from rooftop PV if the collective supply from PV exceeds user demand. A number of smart meter pilot projects have been initiated including one by City Power in Jo’burg, so watch that space.
The future of energy looks increasingly technological rather than fuel based. Electro -technical companies showcased at the AUW are developing a range of technologies that convert energy from the sun, wind and water, can regulate consumption based on time of use and also encourage consumer efficiency through awareness of consumption patterns. It is true that storage technologies such as smart grids, batteries, CSP, hydro etc. are likely to improve and will provide some flexibility. Essentially however, renewable energy technology is guiding us more and more to work and play in rhythm with the Earth’s natural energy cycles. If the almost 70% of people on the African continent who are not yet served with electricity can switch on to renewable smartly managed electricity then they will have a truly sustainable energy future.
In conclusion the African Utilities Week & Clean Energy Conference provides an exciting opportunity for utility service providers and industry to meet to discuss energy solutions, to learn from case studies and to identify matches between energy needs and appropriate technology. The focus was clearly on technology and financing. However, the sharing of experiences, primarily from Africa but including Brazil and India and the involvement of government officials and NGO agencies goes some way toward representing the people perspective in the energy needs of Africa. (Note that the AUW conference focussed on both water and energy but this article only addresses the energy sessions.)
Kim Kruyshaar 18 May 2015