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African countries are facing renewed calls to work together on a
"green deal" to unlock the continent's huge renewable energy
resources and promote economic development.
With years of limited investment amid political instability and
high commercial risks, wind and solar power expansion in Africa has
been lagging behind other regions.
In its Renewable Energy Market Analysis:
Africa and its Regions report published last week, the
International Renewable Energy Agency (IRENA) suggests African
leaders should join up to develop a policy framework to improve the
investment climate.
"A 'green deal' tailored to the African context could provide
the institutional and programmatic framework needed to mobilize
resources and policy action at the appropriate scale," the report
said.
"It would combine the objectives of achieving climate goals,
fostering economic development and jobs creation, and guaranteeing
social equity and welfare for society as a whole," according to the
IRENA, a 167-member intergovernmental organization established to
promote renewable energy.
The idea is inspired by the EU's Green Deal, a set of
policy initiatives that aim at achieving net-zero emissions by 2050
and creating new jobs during the energy transition for the trade
bloc.
In the High-Level EU-Africa Green
Investment Forum hosted by the European Investment Bank in
April, European Commission (EC) President Ursula von der Leyen said
African countries should work on a similar policy package "for a
stronger and more prosperous Africa." The EC plans to announce some
investment initiatives focused on renewables in the EU-Africa
Business Forum due to take place 14-18 February.
For an African green deal to work, IRENA Director-General
Francesco La Camera said in a virtual IRENA ministerial meeting 14
January that African nations should seek to create an "overarching
holistic framework" rather than "pick and choose policies
selectively."
"Regional coordination can foster synergies among various
countries and raise the prospect for success," La Camera said.
According to the IRENA report, which was jointly developed with
the African Development Bank (ADB), such a deal should cover
financial incentives for low-carbon projects, structural reforms of
the power sector, and industrial policies that promote local
manufacturing of renewable energy equipment.
"Policymakers must mobilize public and private investments in
new or upgraded energy infrastructure (power grids, district
heating and cooling networks, electric charging stations) and
foster innovation," the report added.
Moreover, the framework could include continent-wide and
regional renewable energy targets while allowing each nation the
flexibility to have its own long-term decarbonization roadmaps.
Kevin Kanina Kariuki, vice-president for energy and climate at
the ADB, said in the same meeting: "No two countries are similar.…
One size does not fit all. Each will embark on energy transition
from different starting points based on its particular
circumstances."
Coordination projects
The African Union is currently developing a long-term plan for
continent-wide power systems. The IRENA and the International
Atomic Energy Agency are providing modeling tools in the planning
process.
In June, the African Union proposed the African Single Electricity
Market, which could eventually become one of the world's
largest power markets by serving more than 1.3 billion people.
According to the 55-member intergovernmental body, the market is
expected to integrate five regional networks, namely the West
African Power Pool, the Eastern Power Pool, the Central African
Power Pool, the Southern African Power Pool, and the Maghreb
Electricity Committee. It will begin trading in 2023 and be fully
operational in 2040.
Such a market could encourage individual countries to develop
renewable energy based on their natural resources, which would
result in lower electricity costs overall, according to
experts.
"We need to push for interconnection in Africa. Because every
country needs to invest where it has potential in terms of
renewable energy," Burkina Faso's Minister of Energy Bachir Ismaël
Ouédraogo said.
"Burkina Faso has the best solar [resources] of West Africa. We
need to heavily invest in solar, and make sure that we don't only
invest for the market of Burkina Faso, but [also] for the market of
West Africa," he added.
The official said his country is investing in 600 MW of solar
power for domestic demand and could expand the project to 1.5 GW to
serve the region.
"We would have benefited from the economies of scale … and the
whole region will benefit from a lower cost of the kilowatt-hour,"
Ouédraogo said.
Limited investment
Aside from large hydropower projects, the penetration of
renewables in Africa's power sector remains low as utilities
struggle to attract investors.
Of the 829 TWh of electricity generated in the continent in
2019, just 1.5% came from solar power and 1.2% from wind, according
to the IRENA report.
At end-2020, solar accounted for 4.4% of Africa's total
installed capacity, or 10.4 GW. This compared with the full
technical potential of 7,900 GW, the IRENA said. Wind capacity
reached 6.48 GW, versus the full potential of 461 GW.
"While Africa is blessed with abundant renewable energy sources,
related investment flows in remain insignificant," Kariuki
said.
According to the IRENA report, renewable
investment—excluding large hydropower projects—amounted to
$60 billion in Africa between 2000 and 2020, or 2% of the global
total. Of the investment, $55 billion was recorded in
2010-2020.
For the 2010-2020 period, solar photovoltaics attracted $18
billion, onshore wind projects $17 billion, and solar thermal $9
billion.
While renewable projects in other regions tend to attract more
private investors, the IRENA found African projects are often
backed by public capital.
"In Africa … projects are not able to attract private capital
owing to political, legal and economic risks. Public authorities
can palliate those risks and mobilize private capital through
regulatory instruments, fiscal incentives, guarantees and market
development," the report said.
Taking large hydropower projects into account, public
commitments in renewable energy reached $55 billion in 2010-2019,
the IRENA said. Private investment in renewable projects owned by
independent power producers amounted to $35.1 billion in
2010-2020.
Recent news suggested public financiers continue to play a
leading role in Africa. In May, the International Finance
Corporation, a unit of the World Bank, inked its first
certified green loan in continent. Africa Finance Corporation said
in September that it planned to raise $2 billion over the coming
three years for direct investment in infrastructure projects to
counter climate change.
But Ditte Juul-Jørgensen, the EC's director general for energy,
warned that public finance alone is insufficient in promoting
low-carbon energy in Africa.
"One of our focus points is to bring private sector investments
[to Africa], including those from European companies operating in
the field of renewable energy," Juul-Jørgensen told the IRENA
meeting.
"But of course, these investments also require a good investment
climate, and a clear regulatory framework that's conducive and
attractive.… That would allow these private sector Investments to
take place in an open and competitive market," she added.
To improve the investment environment, Italian energy company
Eni's Chief Operating Officer of Energy Evolution Giuseppe Ricci
believes governments, international institutions, multilateral
banks, and the private sector need to work together on a policy
framework for Africa.
"[No] one subject could solve a problem that is so important.…
We need the collaboration," said Ricci, whose company has developed
power projects in Congo and Nigeria.
Nadja Haakansson, managing director for Africa at Siemens
Energy, a renewable technology provider spun off from German's
Siemens AG in 2020, suggested her company would look for business
opportunities in several sectors like solar, wind, and gas in the
continent.
"It's not going to be a single approach [in Africa].… A mix of
technologies and solutions will play an important role," Haakansson
said. "I think that there is huge potential in the African
continent when it comes to local manufacturing."
Just transition
While central and southern Africa is rich in cobalt, manganese,
and platinum that are necessary in manufacturing batteries, the
continent has yet to develop industrial clusters across the
renewable value chain.
The IRENA report said the renewables sector employs more than 12
million people worldwide today, of which less than 3% are in
Africa.
"Many African countries remain consumers rather than producers
of low-carbon technologies, limiting the creation of jobs and other
socio-economic benefits relating to construction, operations and
maintenance," the report said.
"Critical mineral producers need to leverage the energy
transition to move into higher value-added segments of the
renewable energy supply chains such as processing rather than
merely exporting valuable raw materials," it added.
If African countries pursue policies that can help limit global
warming to 1.5 degrees Celsius, the IRENA estimated their combined
economies would be 6.4% larger and employment opportunities could
increase by 3.5% up to 2050.
The IRENA, and some others in the ministerial meeting, also
called for African leaders to embark on a "just transition" that
would direct low-carbon electricity to large swaths of the
population.
Only 16% of the Sub-Saharan population had access to clean cooking energy and 46% to
electricity as of 2019, according to the IRENA.
"In an African context, the energy transition cannot simply be
about decarbonization alone," said Amani Abou-Zeid, commissioner
for infrastructure and energy of the African Union. "Importantly,
it must be linked to the need on bridging the energy access
depth."
Posted 17 January 2022 by Max Tingyao Lin, Principal Journalist, Climate and Sustainability