7. Technology Transfer and Deployment
Technologies face a number of barriers to widespread deployment. Policies must be designed to overcome these. IRENA is working in a number of areas, such as:
- Independent technology cost and status information;
- Enhanced technology access through a renewable energy patent database;
- Work on standardisation, test procedures and best practices;
- Establishment and strengthening of technology centres that can support clusters and supply chains for technologies adjusted to local conditions; and
- Capacity building for technology transitions and information dissemination.
- As part of the Africa Scenarios and Strategies project, the equipment supply situation will be assessed, as will the main barriers for technology transfer in Africa. This includes the following topics:
- Analysis of the current renewable energy equipment supply situation in Africa for wind, solar PV, solar CSP, hydro, biomass combustion, biomass gasification, first and second generation biofu-els, industrial biofuels and solar water heaters;
- Evaluation of equipment supply and/or operation and maintenance as a potential barrier for building a manufacturing base and/or for using renewable energy equipment. Identification of the main issues (patents, technical expertise, capital, economies of scale, etc.);
- Identification of the potential, need and viability of building up renewable energy equipment supply industry in Africa, and its impact on equipment cost and access;
- Evaluation of current and projected import tar-iffs and non-commercial cost for establishing a renewable energy base in Africa; and
- Evaluation of the existence of renewable energy equipment quality standards and gaps.
While these activities will help governments develop their technology policy, this alone is not sufficient. Successful transition to renewable energy requires action on the part of governments and the donor community. Government ownership, energy roadmaps, scenarios and strategies, sizeable efficient investment funds, transparent decision-making processes - all play a role. But government action alone is not sufficient. A massive roll-out of renewable energy investments is only possible through private sector participation. The private sector requires a credible long-term policy framework and a credible outlook for revenues from investments with a life span of decades. In a high-risk environment, investments will be limited to the few projects with exceptionally high returns.
The levels of carbon funding that are discussed today are small compared to the levels of investment that are needed in Africa. The future of CDM is unclear. Government policies should not be based on this uncertain source of revenues. The technology mechanism that is being discussed under the UNFCCC is still under development and it is not clear whether it will have a signifi-cant impact. However, it is important to account for the fact that the CO2 challenge is here to stay and that high emitting assets may quickly lose value.
The access challenge has been widely studied. The World Bank concludes with regard to electricity that change of the policy framework is an imperative:
"In Sub-Saharan Africa, it is essential to overcome the current power sector performance problems for an electrification effort to be sustainable. The challenge could prove insurmountable if electricity prices remain below costs in favour of the few who have access to electricity. The power sector in sub-Saharan Africa is in the midst of a serious crisis, characterised by sub-optimal development of energy resources, high costs, under-pricing, and large inefficiencies in performance linked to governance constraints and a distorted set of incentives. In particular, under-pricing and regressive subsidies have become a serious impediment to providing electricity to rural areas and the urban poor. Also, technical and nontechnical losses are, on average, very high (30 to 35%). It is obvious that any effort to extend access will not be sustainable if there is no progress in addressing these sector-wide problems." (WB, 2010).
The World Bank also notes:
"Extending access is particularly challenging for low-income countries with low electrification rates. Once a country reaches a medium level of electrification and a certain income level—for example, 50% electrification and an average per capita income above USD 3,000 (valued at purchasing power parity)—it becomes easier to achieve universal access because there is an increasing critical mass of taxpayers and electricity consumers able to provide the funds needed to make electrifica-tion financially sustainable. The challenge is tougher in low-income countries where available resources and the numbers of consumers and taxpayers capable of contributing to subsidies tend to be limited. This situation is often aggravated by poorly performing utilities and regressive pricing policies subsidising those who can afford to pay cost-reflective tariffs and contributing to systematic deterioration of the operational and financial state of the power sector and its institutional capacity. The consequence is a perverse situation, in which higher-income consumers receive benefits they do not need (through subsidised rates and/or unbilled consumption), leaving few or no resources to expand access. However, outstanding cases of success among low income countries, clearly illustrate that it is possible to overcome these difficulties through sustained government commitment to a long-term approach with arrangements and procedures that maximise efficiency in the design and implementation of policies, strategies and programmes aimed at expanding access, combined with actions to improve the existing tariff systems and subsidisation schemes, as well as in the operational performance of utilities in charge of service provision." (WB, 2010).
Certain types of renewable energy can help to overcome some of these shortcomings of the policy environment. Especially small-scale solutions deserve attention in the African context because they can be implemented easier. Smaller projects can be financed locally and they can be introduced gradually. The transportation challenge for the equipment is reduced. While the risk of failure of individual systems is increased, their sheer number virtually precludes failure of the whole supply at once. Offgrid solutions and mini-grids avoid the need for transmission infrastructure. Of course these benefits must be weighted against cost and other aspects. But it is fair to say that consideration of renewables will significantly broaden the range of options available to any African decision-maker. Increasingly cost-effectiveness will also favour renewa-bles. And active technology deployment policies can help to broaden the application of renewables.