Africa needs to strengthen energy mix

Africa needs more off-grid and mini-grid systems, in addition to extending its current nation-wide electricity grids, if it is to supply all its people with affordable and reliable power. This is according to a report released this month by the Africa Progress Panel, a panel of ten individuals from private and public sector who advocate for equitable and sustainable development for Africa led by former Secretary-General of the United Nations and Nobel laureate Kofi Annan.

The report says that there is an urgent need for Africa to utilize as many energy sources as possible, given the increasing energy demand. Improving energy access is needful if Africa should achieve Agenda 2030, and two thirds of Africans still lack access to "affordable, reliable, sustainable and modern electricity." Governments need to realize the urgency with which they need more energy to achieve those goals, and how shortage of adequate power was stifling economic growth, job creation, agricultural transformation, and improvements in health and education, so says the report.

In addition to on-grid power sources, mini-grids and off-grids can help Africa tackle three of its eminent challenges:

  • providing citizens with affordable energy,
  • building energy infrastructure needed to drive growth and create jobs, and
  • reducing carbon emissions.

Although mini-grids and off-grids are already an important part of energy agenda in Ethiopia, Kenya, Morocco and South Africa, the report notes that more energy systems -- including energy innovations -- are needed to bridge the energy gap across the continent.

"We now need to see more of them deployed at far greater scale to bring power and light to Africans who still lack modern energy," said chair of Africa Progress Panel Kofi Annan.

Energy is the ‘golden thread’ connecting growth, equity and sustainability. Energy access is essential to ensure that all SDGs succeed. 

Traditional verses modern methods

Traditional methods of extending grids are no longer viable because they take too long and do not meet needs of the growing economies and societies according to this report, and to meet increasing energy demand by all, the energy mix will shift towards greater use of off-grid household systems and mini-grids.

That does not mean shunning on-grid (national grids) and other sources of energy to immediately turn to renewable since "the cost of transitioning to renewables may be prohibitively high in the short term."

"What we are advocating is that African governments harness every available energy option, so that no one is left behind," said Annan. "Each country needs to decide on the most cost-effective, technologically efficient energy mix that works best for its own needs."

Therefore, Africa also needs to improve and transform its national grids that are often unreliable, financially fragile and mismanaged. Lack of accountability and transparency in governing these grids is also a problem, leading to "electricity theft at staggering scale," energy corruption, and politics in power provision, says the report.

The peculiar nature of off-grid and mini-grids in terms of flexibility and adaptability makes them strategic for helping end energy poverty, especially in remotest areas of Africa.

Although off-grid was previously regarded as a means of lighting homes before one gets a national grid connection, there are signs that people will continue to invest in off-grid systems that are of long term use at home. Further, there is a lot of potential for off-grids considering how mobile technology has improved financial and social inclusion.

"Some of these home systems may in future connect to grids through buy-back schemes, enabling households to earn extra cash from the power they generate," said Annan. "Such arrangements are already working in Australia, some parts of Europe and the United States."

Currently, most of off-grid solutions are pico-systems -- single-light lanterns to small solar home-systems of 10W or less that can power multiple lights and a mobile-phone charger, according to the report. 

In addition, sale of pico-systems is concentrated in Kenya, Ethiopia and Tanzania, and their penetration all-over Africa is just 3 percent. The report shows that the demand for these systems has been improving, reaching 11.3 million units in Sub-Sahara Africa in 2015.

Mini grids are flexible and can provide power to remote areas with distributed populations where per capita electricity consumption is low, at much lower cost than grid extension.

They have the potential to offer permanent alternatives to connecting to national grids if more viable solutions for small, medium-sized enterprises and communities are born, according to the report.

Demand for mini-grids is also increasing according to the report. The International Energy Agency (IEA) estimates that 140 million people in Africa will gain access to electricity through mini-grids. This would require the installation of 4,000 to 8,000 mini-grids a year for the next 25 years, and that number far exceeds all current estimates of mini grid investments in Africa, says the report.

Policy

The report finds the need for governments to improve policy and regulation relating to use of mini-grids and off-grids. Africa will also need to continue engaging both public and private sectors to participate in the energy agenda.

African governments also need to look outside their borders for necessary energy collaborations with their neighbors, now that only eight percent of generated energy in the continent is traded across those borders. Integrated plans and policies will be needful across Africa for Africa to realize its full energy potential.

Although increasing energy access is an enormously task for the continent, it is also an opportunity for all -- entrepreneurs, investors, governments, non-governmental sectors and continent as whole -- to realize the needed social and economic transformation.

READ THE REPORT: LIGHTS, POWER, ACTION - ELECTRIFYING AFRICA 2017