Africa needs more investment in renewable energy to solve its electricity deficit

Over 600 million people of Sub-Saharan Africa’s 1.2 billion population presently do not have access to electricity. And recent trends reveal about six percent of sub-Saharan Africans will still lack access to energy by 2020. Most countries in the continent rely on fossil fuels as sources of energy to power their economy. But these forms of energy utilize limited resources that will ultimately deplete, hence driving up the cost of energy. These sources of energy also use up earths’ natural resources and contribute to climate change and environmental pollution. There is, therefore, need to seek alternate, renewable sources of energy.

The epileptic state of energy in most parts of the continent has stunted the growth of domestic companies and discouraged international investment and foreign firms from setting up manufacturing plants in Africa, opined Professor Mthuli Ncube, Managing Director and Head of Quantum Global Research Lab (Switzerland), part of Quantum Global Group. About 60% of the population in Africa has no access to electricity. And power outages are estimated to cost Africa between 1 and 2% of GDP. “Power deficits are the continent’s biggest infrastructure challenge: per capita power generation is less than half the rest of the developing world,” Ncube said.

“Not only does electricity access need to be increased, but supply has also become less stable, with regular outages reported in at least 30 countries.”

In order to drive growth and development in Africa, there is need to foster an environment where companies can enter energy generation, transmission and distribution markets, climb the value chain, and build the investment partnerships. A McKinsey report revealed that power consumption rates in Africa are far below that of other emerging markets. Average electricity consumption in sub-Saharan Africa, excluding South Africa, is only about 150 kilowatt-hours per capita, a fraction of consumption rates in Brazil, India and South Africa.

To meet skyrocketing demand for energy that is projected to triple by 2030, African countries may have to triple their energy output. It is, therefore important to invest in other renewable technologies to help diversify the continent’s energy sources. Research carried out by Berkley laboratory of the U.S department of Energy revealed that alternative energy such as wind and solar can be economical with its environmentally competitive options, which can contribute significantly to the rising demand of energy in Africa since it is home to vast resources of renewable energy, including geothermal, wind, hydro and solar energy. These energy potential can be harnessed fully, as modern, renewable energy accounts for less than 2% of the sub-Saharan energy mix.

Africa can achieve a higher quality of life when empowered with alternative energy. These could allow the continent to depend on high-carbon fuels. And if African nations can position themselves as technological leaders, they could influence global markets and clean energy technologies too. It is an excellent opportunity for commerce to thrive and reduce the continent-wide poverty rate.

The significance of alternative energy sources can never be overemphasized considering its public health benefits. For instance, the air and water pollution emitted by coal and natural gas plants is linked to breathing problems, neurological damage, heart attacks, and cancer. Replacing fossil fuels with alternative energy has been found to reduce premature mortality, lost workdays, and overall healthcare costs. In addition, wind and solar energy require essentially no water to operate and thus do not pollute water resources or strain supply by competing with agriculture, drinking water systems, or other important water needs.

For a continent that intends to hold up its head or, even better, take a place of pride among other continents of the world in development, urbanization, industrialization, innovation and growth, it is important that African countries make use of alternative energy sources to catalyze national development, economic advancement and global recognition. Access to energy guarantees more economic opportunities as new businesses can be established, existing companies can grow and jobs can be created.

Various renewable energy projects have been launched in the continent over the past couple of years. Africa’s renewable projects have attracted investments from across the globe. In 2017, the International Finance Corporation (IFC) invested a sum of $200 million through The Africa Renewable Energy Fund (AREF) in renewable energy projects across sub-Saharan Africa excluding South Africa.

Another notable project is ACF-Access Power innovative $7 million financial support program designed to provide local power project developers and originators with project development support, technical experience, expertise and funding required to bring their renewable energy projects to life. There is also The Sustainable Energy Fund for Africa (SEFA), which is a multi-donor trust fund administered by the African Development Bank – anchored in a commitment of $60 million by the Governments of Denmark and the United States to support small and medium scale Renewable Energy (RE) and Energy Efficiency (EE) projects in Africa

Although these projects are significant, more of their nature is needed if the African continent will meet its energy demands. African governments and their partners should harness every available option to be cost-effective and technologically efficient. Various stakeholders need to seize the opportunity to re-imagine their energy futures and meet the needs of the continents growing economies and societies.