energy policy global report

7/31/2019 Energy Policy Global Report

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RENEWABLE ENERGY DEVELOPMENT IN AFRICA-CHALLENGES,

OPPORTUNITIES, WAY FORWARD

Mr. Babu RAM

Chief Power Engineer

South Africa Regional Office

African Development Bank

PART I

INTRODUCTION

Across the board, it is now accepted that climate change is no longer a fabrication.

Climate change is a globally occurring phenomenon caused by man-made greenhouse

gases (GHG), including carbon dioxide. Besides serious global ramifications, climate

change poses a special challenge to sustainable economic development and poverty

reduction in developing countries in general, and in Sub-Saharan Africa in particular.

Sub-Saharan Africa (SSA) has the worlds lowest electricity access rate at 26%, with a

rural electricity access rate of only 8%. Eighty five percent of the people in Sub-Saharan

Africa rely on biomass for energy. In a quest for modern energy, 70% of household

income is spent on energy (diesel, kerosene, charcoal); 0.4 million hectare forests are

cleared each year in Africa. The Sub-Saharan Africa largely depends on biomass and its

products (Charcoal), however; the production of charcoal is inefficient. The use of fuel

wood is inefficient as well. Exposure to indoor pollution is globally responsible for over

1 million premature deaths and a substantial portion of these deaths occur in sub-Saharan

Africa. The above numbers indicate a huge energy infrastructure gap and an urgent fix.

Deforestation in Africa is a cause of concern for every nation since the forests in Africa

serve as sinks for absorption of the CO2 produced across the world. Climate Change

offers opportunities for Africa to become a leader in the utilization of renewable energy,

in particular hydro, wind, solar, biomass, geothermal, etc for meeting energy

requirements and reducing deforestation. Like other nations, African nations have an

energy need that is met by the utilization of fossil fuels like coal, natural gas, and

Uranium. However, this paper calls for the development of Renewable Energy (RE)

resources for the reasons stated above. The renewable energy resources development and

use can significantly contribute to enhancing electricity and energy accessibility in


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Africa. However, the potential of renewable energy sources remains largely untapped as

of date.

Overall, unexploited potential of renewable energy resources can be traced back to

national energy policies. The energy policies mainly concentrate on the conventionalelectricity sector. Conventional electricity is subsidized, while the support for renewablesources remains on the fringes. The resources allocated for renewable energy are meager.Furthermore, renewable energy strategies including the vision, institutions andimplementation plans are not well articulated in numerous countries. The benefits of REin the face of climate change are not well recognized in the energy policies. In addition,there is a disconnect between national energy policies and the national communication tothe United Nations Framework Convention on Climate Change (UNFCC) with respect torenewable energy in a number of African countries.

Therefore, this Paper is about reviewing public policies with respect to renewable energy

and climate change, identifying the disconnects that exist at the country level, presentingthe potential of renewable energy development amid constraints and suggesting wayforward to exploit the renewable energy resources for increasing electricity and energyaccess rate in Africa.

The paper is divided into six parts: Part I, already covered, is introductory in nature. PartII presents the renewable energy resources of Africa. Part III reviews the public policiesincluding the existing energy policies and the national communications of selectedcountries to the UNFCC. The objective of the review is to assess if these policies areleading to exploitation of RE resources; and if these policies are able to eliminate energypoverty in Africa. Right policies, right institutions and human resource capacities are

important for Africa to harness renewable energy resources. Part IV presents theharnessing of renewable energy resources to bridge the existing energy infrastructure gap.Part V presents a way forward for scaling up the utilization of renewable energyresources in Africa. The conclusions and recommendations are presented in part VI.

PART II - RENEWABLE ENERGY RESOURCES IN AFRICA

The potential and status of development of renewable energy resources are described

below:

Hydropower

Technically, exploitable hydropower potential of the African continent is estimated at1,852 TWH/year (11% of the worlds total potential). About 93% of this potential

remains unexploited. This is the least cost option for meeting demand, as shown by

several hydropower projects in Ethiopia, Tanzania, Democratic Republic of Congo

(DRC) and Cameroon. The Congo River in DRC is the most significant renewable energy

resource of Africa with potential to contribute to economic renaissance of the continent


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(Appendix 1, Figure 1). It is well recognized that the development of hydropower is very

critical to improving access to electricity in Africa, improving energy security and

reliability of energy supplies, and reduction of environment damages from the use of

traditional fuels that have far-reaching effects on poor peoples health and livelihoods.

Geothermal Energy

The potential of geothermal energy is stated to be 14,000 MW in East Africa Rift Valley.

The geothermal potential for selected African countries is; Kenya 3GW, Ethiopia more

than 1GW, Djibouti approximates 850 MW, Uganda 450MW and Tanzania 150MW. To

date, only 129 MW has been exploited in Kenya and 7 MW in Ethiopia. Kenya has

planned to produce 1260 MW using geothermal energy by 2018. Olkaria III (Kenya)-35

MW IPP has been commissioned and started selling power to Kenya Power & Light

Company (KPLC). There are different types of constraints to geothermal development:

some of them are generic, while others are specific to individual countries. The generic

constraints cover the exploratory risks related to drilling and field development, while thespecific constraints are related to financial risks, and country-related commercial and

institutional risks. Removal of these risks together with the reduction of implementation

costs would promote the adoption of geothermal energy in the region. There is need to

develop a regional program to facilitate the exploitation of the geothermal energy in the

Rift Valley.

Solar Energy

Africas solar energy potential is huge (Appendix 2, Figure 2) and equivalent to 90-100

million tons of oil per annum. The solar insolation in the West Africa varies from 3-4kWh/m2/day in Cotonou to 6.2 kWh/m2/day in Agadez (Niger). In North Africa, Morocco

receives an average of 4.7 to 5.6 kWh/m2/day. In the Southern Algeria, overall radiation

reaches average levels of 6.1 kWh/m2/day. In Southern Africa, the overall average

radiation varies 5-6 kWh/m2/day.

African nations have made notable progress in the use of solar photovoltaic power.Kenya, Ghana, Namibia, South Africa, Morocco, Tunisia, and Senegal have promotedsolar home systems but to high-income households.

With regard to potential for solar power production, it is estimated that with adequate

investment in the Concentrated Solar Power (CSP) technology, Africa can produceenough electricity to meet its own needs and export surplus electricity to Europe.


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Wind Energy

The wind energy potential is greatly located in the coastal areas. Tentatively, it is planned

to add about 8,500 MW by 2020 (Appendix 3, Figure 3). About 150 MW of wind power

has been installed in Africa (Egypt, Morocco, Tunisia, South Africa, and Cape Verde).

This is a very low penetration rate compared to other markets in the world. The lowcapacity of installed wind generation is not because the resource does not exist, but for

other reasons, including the fact that a number of countries do not have the appropriate

regulatory framework in place to encourage private investment in the development of

wind energy. This constitutes an important barrier impeding the development of wind

energy in Africa. The African Development Bank has prepared a pipeline of wind energy

projects corresponding to about 900 MW. The Bank is also promoting private investment

in the wind energy projects.

Cogeneration

The potential of cogeneration is attractive for industries which need to utilize it for

processing heat and power. These industries are sugar, rice mills, pulp & paper,

chemicals, and cement. Africa Energy Policy Research Network (AFREPREN) has

estimated the potential of cogeneration at about 732 MW in sugar industries in selected

African countries, namely Ethiopia, Kenya, Malawi, Sudan, Swaziland, Tanzania and

Uganda. Moreover, South Africa has also programmed to install 900 MW capacities.

Sizable startup costs and regulatory issues pose major barriers to the exploitation of

cogeneration. Some of the costs could be reduced by taking opportunities provided under

the CDM of Kyoto Protocol.

Biomass

The potential of biomass can be sub-divided into four categories (i) Agricultural waste

(ii) Animal waste (iii) Wood waste and (iv) Energy producing crops. The potential of the

first three items is 131,000 Tons of Oil Equivalent (TOE). Some studies show that the

potential of bio methane production is 6 million TOES. These biomass potentials need to

be exploited to generate electricity through a variety of technologies, such as biomass

gasifiers, cogeneration/combined heat and power, and biogas.

The energy producing crops are utilized for production of the combustible liquids (i)

ethanol from sugar cane, manioc or maize and (ii) methanol from wood by gasification

and gas synthesis. The bio fuel production is being explored in countries such as Ghana,

Mozambique, and Zambia. The possibility of producing bio fuel is great using pourghere

almonds a plant which grows in both equatorial and semi-arid zone and Jathropa. The

bio-fuel can be substituted for gas oil in specially adapted engines.


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In summary, it is noted that Africas renewable energy resources are considerable but

unevenly distributed. However, these resources have not been assessed and evaluated.

Multilateral and bilateral donors have funded few projects in selected countries, leading

to resource assessment but many more evaluations are needed to give the precise idea of

the potential of various renewable energy resources in the SSA.

PART III-REVIEW OF PUBLIC POLICIES

National Communications to the United Nations Framework Convention on ClimateChange (UNFCC)

The non-Annex 1 African countries to the Kyoto Protocol that have submitted initial

national communications to UNFCC (http://unfcc.int/national_reports/items/1408.php)

are given below:

Algeria, Botswana, Burkina Faso, Cape Verde, Chad, Cameroon, Cote dIvoire, Egypt,

Ethiopia, Kenya, Lesotho, Mauritius, Mauritania, Madagascar, Morocco, Mozambique,Malawi, Niger, Nigeria, Democratic Republic of Congo, Rwanda, Senegal, Seychelles,

Sao Tome Principe, Sudan, Swaziland, Tanzania, Tunisia, Uganda, Zambia and

Zimbabwe.

Of the above, Botswana, Congo, Ethiopia, Madagascar, Morocco, Sierra Leone, and

South Africa have updated and submitted their mitigation strategies to the Climate

Change Secretariat following the Copenhagen Summit

http://unfcc.int/home/items/5265.php).

The National Communications to the UNFCC describe the sectors, the policies andmeasures that are important for reducing greenhouse gases as well as adapting to negative

effects of the Climate Change by 2020. This paper concentrates on the energy sector. All

the national communications underscore the importance of the energy sector; in

particular, its huge potential to reduce greenhouse gases as the sector is well positioned to

conveniently deploy zero carbon and/or low carbon technologies. While the depth of

measures varies from one party to another, all the mitigation measures are coincident on

the following themes that need to be addressed while taking actions to limit greenhouse

gases.

Cooking Energy

Fuel wood, charcoal and agriculture waste consumption constitute about 85% of energy

use in Sub-Saharan Africa except for South Africa whose consumption of fuel wood is

limited to about 15% of the national energy consumption. It is recognized that both the

fuel wood and charcoal stoves are inefficient. Moreover, the charcoal kilns are also
http://unfcc.int/national_reports/items/1408.phphttp://unfcc.int/national_reports/items/1408.phphttp://unfcc.int/national_reports/items/1408.phphttp://unfcc.int/home/items/5265.phphttp://unfcc.int/home/items/5265.phphttp://unfcc.int/home/items/5265.phphttp://unfcc.int/national_reports/items/1408.php


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inefficient. Funding is required to expand the programs of efficient cooking stoves for

both charcoal and fuel wood.

Moreover, charcoal business-production and sale is in the hands of small and medium

enterprises under the private sector. The charcoal business is largely unregulated.

Without public policy to set efficiency standards and regulatory measures, the privatesector cannot be motivated to invest in the measures to raise efficiency of charcoal kilns.

The governments need to take actions in respect to the above. At the same time, the

financing agencies need to open a line of credit to lend to private entrepreneurs for

investment in the improved charcoal kilns.

To substitute charcoal and fuel wood, some countries have significantly achieved the

penetration of electricity and butane in semi-urban and urban areas. Others have

expressed desirability to promote wider use of LPG/butane/kerosene/alternative fuels and

solar cookers in the rural areas to avoid deforestation. This suggests that the fossil fuels

are still required to reduce deforestation until alternative fuels and devices becomeavailable. Still others have suggested undertaking forestation programs/social forestry in

the rural areas. All of the above are necessary in every country of Sub-Saharan Africa.

Energy Conservation in Household, Industry and Transport sectors

A number of countries have expressed intentions for improving efficiency of end users

(lighting, cooling and refrigeration) of the household, industrial and transport sectors but

only few (Algeria, Tunisia, Morocco and South Africa) have established targets to the

above effect. Furthermore, in regard to the industrial sector, most of the countries have

proposed to improve the efficiency of boilers, and to substitute the use of fuel oil withnatural gas/coal/biomass. Most of the countries in Maghreb (North Africa) have proposed

mandatory energy audits, and technology upgrades for industrial sector.

For electricity generation, proposals have been made to utilize natural gas in place of

petroleum products. Similarly, utilization of hydropower has been recommended to

reduce greenhouse gases by others. The countries like Rwanda and Tanzania have also

considered the regional integration to reduce greenhouse gases.

Utilization of New and Renewable Energy Resources for Energy Access

Notably, Algeria, Cape Verde, Egypt, Mali, Morocco, Nigeria, Tunisia, and South Africahave considered the application of Renewable Energy, in particular solar and wind

energy, to produce electricity to meet national electricity demand. While Algeria, Egypt,

Morocco, and Tunisia focused on reducing the consumption of fossil fuels, others

envisaged the utilization of renewable energy for increasing the electricity access rates of

the population. Geothermal energy utilization is limited to Kenya though the potential


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exists in all countries of the Eastern Rift Valley. Still others have recognized the

application of renewable energy (solar photovoltaic and wind) for water lifting, and

lighting. The countries like Tanzania, Ethiopia, and Kenya have proposed to utilize

biogas for cooking, lighting in rural areas. Numerous countries are keen to exploit the

potential of small hydropower, land fill gas, etc. Most of the East African countries have

considered the cogeneration to mitigate greenhouse gases.

The National Communications do not lay as much thrust as is required on increasing

investment for improving energy access in Sub-Saharan Africa.

Review of National Energy Policies

Review of national energy policies helps us in understanding the national priorities and

the review will guide the countries having less successful policies in updating their

policies to facilitate investment in the sector. The highest common priorities are: (i)

increasing investment (ii) increasing energy access rate (iii) promoting sustainable energysupply options (Renewable energy and energy efficiency) and (iv) capacity building.

Without increasing investment, the energy infrastructure gap cannot be minimized.

However, the energy policies in many Sub-Saharan African countries do not contain

strategies for facilitating investment in the renewable energy resources. The strategies

need to address the investor perceived risks: The investors need a long-term off-take

guarantee (PPA), predictable price and open access to the grid, all of which together with

the Feed-in-Tariff policy go a long way to address risks. The Feed-in-Tariffs are quite

popular to facilitate investment in the new and renewable energy projects; over 60

countries worldwide have introduced such instruments for various renewable energytechnologies. Of the above countries only five, namely Algeria, Kenya, Mauritius,

Uganda, and South Africa are situated in Africa. These countries provide investors a

predictable price, guaranteed off-take arrangements and arrangement for interfacing with

the grid for different Renewable energy technologies. As a result, the investment is

increasing in Renewable Energy Technologies in these countries. Investment in

harnessing the renewable energy resources is lacking in other Sub-Saharan African

countries. Thus, the penetration of the renewable energy technologies in other Sub-

Saharan countries is blocked by the lack of appropriate public policies and regulatory

instruments to promote investment in the Renewable Energy Technologies and not by the

technical considerations. Thus, there exist the energy policy gaps. What is needed now isnew and composite energy policy consisting of renewable energy policy and elements of

national communication to UNFCC to steer investment to develop renewable energy

resources in order to enhance energy access for people in Sub-Saharan Africa.


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South Africa, installation of 1 million solar water heaters has been planned by 2013.

Expected market expansions over the next 15 years is estimated at more than 150 MWp

(15,000 schools, 1,700 clinic and up to 2 million households). However, the factor

limiting the adoption of the solar technology is the high upfront investment cost required.

Developing a manufacturing hub for the Southern Africa Region will reduce the cost and

alleviate barriers arising out of high upfront costs.

As to the production of solar thermal power, Botswana is to prepare a feasibility study of200 MW solar power plants based on the parabolic trough technology. Eskom hasplanned to produce 100 MW solar electricity using Central Tower/Receiver technology atUpington. The project is expected to be funded by the CTF and the MDBs.

The piloting of micro/mini hydro has been successful in Zambia and Tanzania with theassistance of development partners and involvement of local communities. Theseschemes transferred know-how and knowledge to local communities with regard tooperation and maintenance of technology.

Moreover, the waste-to-energy projects are being conceived in Mauritius, Seychelles, andSouth Africa. 20 MW incineration plant in Mauritius is expected to be developed by anIndependent Power Producer.

East Africa

The Renewable Energy resources of the Eastern Africa region are known in terms of

geothermal energy, cogeneration, wind, small hydro, and solar energy. Renewable

Energy development has been at low level. Kenya is the leader in exploiting the

geothermal energy. Geothermal production capacity stands to 128 MW and its further

expansion is being supported by bilateral donors. The geothermal energy potentials of

Ethiopia (>100MW), Uganda (450MW), Djibouti (300-800MW) are yet to be exploited.

The potentials of cogeneration of electricity and process steam remain to be exploited in

Kenya (430 MW), Ethiopia (450MW), Sudan (750 MW) and Tanzania (300MW). With

appropriate feed-in policy and tariff, and credit extension to entrepreneurs, the

cogeneration potentials can be exploited at relatively low investment costs. Kenya is

building 300 MW wind farm in Lake Turkana. KenGen is to secure another 14 sites for

wind energy production. Ethiopia is developing the 120 MW Ashegoda wind energy

project, which is estimated to produce about 400 to 450 GWh per annum. Hydropower is

available in all countries except Djibouti. The micro/mini/small hydro projects in the EastAfrica region need to be developed to increase electricity access rate in rural areas. A

cluster approach and community involvement will reduce production costs. Furthermore,

IPPs are implementing mini hydro schemes in Uganda, thanks to the smart subsidy being

offered to producers on a competitive basis. The solar radiations of about5 kWh/m2/day

are recorded in most countries. The application of solar energy is limited to pilot scale for


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electric lighting, and water heating except for Kenya where 220,000 solar home systems

have been installed without the government subsidy. The knowledge base to exploit solar

thermal power needs to be developed. The institutional structures to handle renewable

energy are weak in order to support the utility scale renewable energy projects in view of

Climate Change. In general, there is lack of sustainable incentives and feed-in policies

except for Uganda and Kenya, which have established the feed-in-tariffs for selective

technologies.

West Africa

The Renewable Energy resources of the Western Africa region include large hydropower,

small hydro, biomass/biogas/bio fuel, wind energy, and solar energy. The electricity

supply in Ghana comes from hydro power; government is developing 400 MW Bui

hydroelectric power plants. Similarly, the development of massive hydropower potential

of Nigeria needs to be encouraged for national use in the context of mitigating

greenhouse gases. The micro/mini hydropower potential of Togo and Benin isrespectively 224 MW and 34 MW, which could be developed for electrification of rural

areas through public-private partnerships as noted in the case of Uganda.

The energy balances indicate prominent use of biomass including fuel wood and charcoal

by rural population and low income urban households. Despite an oil exporting country,

fuel wood is widely used in Nigeria in both rural and urban areas for cooking and

heating. The overall impact is that the country witnesses a high rate of deforestation. In

Ghana, 80% of charcoal production is through using fuel wood from the ecologically

fragile transitional zone between the rain forest and northern Savanna. Besides increasing

efficiency of charcoal making, the government of Senegal has made serious efforts tosubstitute biomass and charcoal with LPG/butane. The consumption of LPG has been

growing, despite the withdrawal of subsidy. The problem in biomass and charcoal use

can be solved by (i) increasing the use of alternative fuels and devices such as

LPG/butane and (ii) reforming the renewable energy and biomass sector.

Ghana is using the biogas technology for cooking, direct lighting, small power generation

and bio-sanitation. Cogeneration of steam and power has been utilized in Oil Palm

industries. The production of bio-diesel from Jatropha plant has been pursued in Ghana to

reduce consumption of diesel and field tested in Ghana. Multi Purpose Energy Platform

based on bio diesel could be promoted to help rural folks in flour milling, oil seedpressing, etc.

In general, the wind energy utilization is found favorable on the coast line of the West

African states. A private investor is expected to install a 50 MW wind energy park in

Ghana.


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A list of prospective utility scale renewable energy projects totaling 8500 MW in Africa

is given in Appendix IV. High up-front costs of the renewable energy systems can be

reduced by concessionary resources. Concessionary financial resources are needed to

implement both generation and associated transmission projects (Ram Babu 1995 &

2007).

PART V-WAY FORWARD FOR SCALING UP THE UTILISATION OF

RENEWABLE ENERGY RESOURCES IN AFRICA

Energy for Cooking and Lighting Homesteads

Energy for cooking food and lighting homesteads remains the essential requirement. The

SSA predominantly uses biomass (70%) for cooking except for South Africa which

consumes only 15%. The predominant use of fuel wood is one of the causes of the

deforestation and the resulting deforestation has been reducing the carbon sinks which

Africa offers to the World. With regard to lighting, about 75% of the households do nothave electricity access and those with electricity access use inefficient lighting bulbs. To

tackle the problem of cooking energy, Niger and Ethiopia have prepared strategies for

supplying cooking energy at household level including the extension of efficient cooking

stoves, efficient charcoal kilns and charcoal burning stoves. LPG/Kerosene to substitute

fuel wood has also been proposed. Limited availability of funds impedes the

implementation of rural energy supply initiatives in SSA. The international community

needs to recognize this problem in the context of the Climate Change and revisit their

priorities and commitments to enhance their contribution of financial resources to solve

the problem of the supply of energy for cooking, lighting, etc in rural Sub-Saharan

Africa.

Utilization of Renewable Energy Resources

The national polices and strategies should be refined/updated/prepared with respect to the

following. The suggestions made below could be expanded by taking into consideration

local conditions:

(i) Removing the Energy Policy Gaps and Constraints: The Renewable EnergyPolicy gaps as mentioned above lead to the undesirable outcome, that is, little

or negligible investment in the development of renewable energy resources.

The countries have a prominent role to play in order to close the policy gaps.

MDBs should assist the countries in this regard.

(ii) The institutional arrangements including the regulatory frameworks in supportof renewable energy are required to facilitate the utility scale renewableenergy projects. The institutional arrangements should cover the market rules,model PPA, grid codes, technical standards, interconnection permits, etc.


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Generally, there has been lack of sustainable incentive/ subsidy andpredictable feed-in policies to encourage uptake of grid connected renewableenergy systems. In Sub-Saharan African, only few countries have establishedthe Renewable Energy Feed-in Tariffs to promote the grid connected systems.Furthermore, such challenges as off-taking arrangements and grid codes

including the technical interconnection requirements and standards for privaterenewable energy projects need to be addressed. Independent System Operatorand market rules are needed to provide the open access to transmission systemfor private sponsors on non-discriminatory basis.

(iii) Lack of capacity is a generic constraint to the development of renewableenergy across Sub-Saharan Africa: it is required for all types of projectssponsors. Capacity building is needed for financial institutions to let sponsorsavail soft credits; and it is as well needed for government officials so that theyare able to assess technological choices, formulate incentives, and negotiatethe terms of sale and purchase of renewable energy with private sponsors.

(iv) Geothermal and Solar Homes (Kenya) and Cogeneration (Mauritius), wind(Egypt, Morocco, Tunisia and Cape Verde) are success stories. Lack of

Information System prevents the dissemination of best practices between

agents and entities in a country and among the countries. For each region, the

information system should be established for exchanging information about

renewable energy potentials, penetration of technologies, success stories,

renewable energy experts and enterprises, which will assist in the

development of renewable energy in the countries.

(v) Manufacture of RE Equipment: Inadequate local manufacturing capacity is anobstacle for RET penetration. There are numerous sellers in Africa for

vending RE equipment and devices. Manufacturing capacity is negligible to

produce PV modules or its components, wind turbines, wind generators,

components of the concentrating solar power, etc. For example: a wind

equipment manufacturer produces only 600-800 Watt wind turbine; with

respect to PV, only a couple of components are manufactured in South Africa.

The Solar Water Heaters though manufactured in a number of countries are

expensive. As a result, most of the RE equipment are imported from China,

Korea, Europe, etc.

(vi) Because of limited capacity of individual nation states, manufacturingfacilities for wind, solar and other equipment should be established on a

regional basis as hubs for production and supply of RE equipment and


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devices. Leading manufactures should be motivated to establish facilities in

the SSA.

(vii) Due to abundance of renewable energy resources, Africa offers vast marketsfor the RETS. There is need to have rational policies to develop the market.

The leading manufacturers of RE equipment and devices should help developthis market in Africa. Development of the RE market can prove to be a win-

win situation for nations and manufacturers.

(viii) Regional Program for Exploiting the Geothermal: The potentials of theseresources exist in numerous countries. For example, geothermal which is

found in Kenya, Uganda, Tanzania in the East African countries and in

Zambia and Mozambique in Southern Africa can be developed through a

regional program. But the policy gaps need to be removed by the concerned

nations themselves.

(ix) Sub-Saharan Africa Solar Plan should be prepared similar to theMediterranean Solar Plan.

(x) Madagascar, Ghana, Tanzania, Mozambique, and Zambia are pursuing theproduction of biodiesel from Jathropa plant. The experiences gained by these

countries should be shared with others. A homogeneous public policy is

needed to guide the production of bio-fuels in the SSA.

(xi) Rationalizing Tariff, introducing peak load pricing (World Bank TechnicalPaper No.240), and removing fossil fuel subsidies will go a long way in

promoting the RET on the continent.

(xii) Mobilizing Concessionary resources to finance investment to implement therenewable energy projects in Africa (Ram Babu, 2006).

Financing of the Investment to Develop and Utilize Renewable Energy

The initial upfront cost of the RE equipment and technologies can be reduced by taking

advantage of the Clean Development Mechanism which facilitates clean energy

development/renewable energy technologies in developing countries. CDM allows

Annex I countries to develop projects in non-Annex I countries, which are signatory to

the Kyoto Protocol. The CDM project results in reduction of greenhouse gases. While

countries like China, India and Brazil have been able to benefit from CDM, Africas

share is only about 2.69% of the total approved CDM projects. Morocco, Tunisia, Egypt,

Algeria, and South Africa are trying to take advantage of CDM Window. As noted by the

Clean Energy Investment Framework of the African Development Bank (2008), several


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constraints prevent African countries from utilizing opportunities offered by Carbon

Market. The ethos of CDM needs to be spread out as much as possible across the length

and breadth of the continent. Donors should consider providing the technical assistance to

assist nations in preparing a climate change policy and in developing bankable projects.

Furthermore, UNFCC needs to simplify the certification procedures to make them more

user-friendly to African countries. Large hydro power projects need to be included in the

CDM. Furthermore, uncertainty with respect to the CDM in the period beyond 2012

should be removed.

Clean Technology Fund (CTF)

The Clean Technology Fund assists the countries which are ODA eligible and have anactive country program, prepare and implement development programs and strategieswith low carbon objectives. Such countries should have national strategies, such as forrenewable energy, energy efficiency, energy security, climate change, or sectordevelopment. Government, in collaboration with the MDBs, takes the lead incoordinating the preparation of the investment across sectors, as well as with bilateral andmultilateral agencies at the country level during the joint mission. CTF provides grantsand/or concessionary loans to renewable energy projects/programs for scaled-updevelopment of the resources. Due to not having the right policies and strategies forrenewable energy sector, many countries in Sub-Saharan Africa do not become eligiblefor CTF resources. The World Bank and the African Development Bank are assisting anumber of countries to prepare business plans to reduce greenhouse gases. Thesecountries are Morocco, Tunisia, Egypt, South Africa and Nigeria. The Clean TechnologyFunds Concessionary Financial support combined with the Feed-in-policies reduces thepayback period of the renewable energy projects by 50%.

Public-Private Partnerships

According to conventional wisdom, governments need to spearhead power sector

reforms through consulting users, employees, legislators on the reform objectives, and

soliciting their opinions and advice on reducing subsidies to fossil fuels, providing level

play field to private investors to develop renewable energy resources, and providing

predictable price and market for renewable energy generators. The public-private

partnership leads to private investment to develop renewable energy resources.

To assist the Independent Power Production, the Feed-in-Tariffs and the law granting theOpen Access to transmission system is needed. The other instrument is the Renewable

Energy Portfolio including the incentives such as the Production Tax Credit, given to

producers according to renewable electricity produced annually. Furthermore, to reduce

the price of renewable electricity, the government needs to preset mandatory targets to

produce energy from renewable energy sources over a given period. Global Energy


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Network Institute (2004) reports, when combined with appropriate grid feed-in-laws, the

above policies increase the cost competitiveness and share of renewable energy sources.

Argued by Favian et al (2005), support to renewable energy is justified since it assists the

countries in achieving the Millennium Development Goals.

Furthermore, Ram (2006) highlighted that innovating financial model and structures arerequired to reduce capital costs of IPP projects and the electricity price at customer end.

These include, among others, a Suppliers credit to an entrepreneur underwritten by a

local commercial bank and zero interest funding from overseas investors which are given

right to undertake Carbon Trading in the overseas market, in return for zero interest rate

funding. The public sector has a definite role in instituting reforms to promote investment

in the renewable energy sector.

Assisting Consumers to Acquire RETS

Experience suggests that the better-off households capable of mobilizing large moniescould easily become the consumers of RETS. The penetration of the Solar Water Heaters

and Solar PV is the case in point. Local communities and cooperatives which manage to

mobilize some funds could become customers for owning and operating RETS. However,

subsidies are required in support of renewable energy technologies. Effective and smart

subsidies are desirable. A successful example is Nepals Biogas Support Program, which

supports a biogas subsidy according to the size of the plant and remoteness of the region.

The program is recognized for its cost-effective design.

((www.nepalbiogas.org/biogas_designing.htm))

Nepals experience in managing and operating the mini/micro hydro and biogas units is

also worth considering for replicating in Sub-Saharan Africa. Nepals success is linked to

subsidies and easy credits made available to beneficiaries to construct and build biogas

plants to use gas for cooking to replace the use of fuel wood and for lighting. The Sub-

Saharan Africa should consider establishing energy special banking facilities or dedicated

structures within existing institutions to support funding of RET.

Part VI - CONCLUSIONS AND RECOMMENDATIONS

To conclude, the Renewable Energy resources development and use can significantly

contribute to enhancing electricity and energy accessibility in Sub-Saharan Africa. Whatis required is establishment of the right policies and strategies to attract investment fromall sources, in order to exploit these resources. Reviews of existing energy policiessuggest that the current policies in numerous countries are unable to accelerate thedevelopment of renewable energy resources and are not positioned to eliminate energypoverty and unlock the entrepreneurial capabilities of African people.


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The pre-requisite for scaled-up renewable energy program is to establish investor friendlypolicies which provide a leveled playing field for investors interested in the renewableenergy resources. This calls for phasing out of subsidies to fossil fuels and settingparameters to address the investor perceived risks such as predictable market and priceover the long-terms. The rationalization of electricity tariffs towards phasing out of fossil

fuel subsidies and introducing peak load pricing will assist in accelerating theexploitation of renewable energy resources. .

The Sub-Saharan Africa largely depends on biomass and its products (Charcoal).However, the production of charcoal is not efficient. The use of charcoal and fuel wood isnot efficient either. As a result, deforestation is rampant. Concerted actions are requiredto reform biomass sector. The international community should assist the countriesbecause such reforms will reduce deforestation and reduce climate change risks.

In view of the existing energy infrastructure gap, harnessing of renewable energy

resources to bridge the gap is presented. Estimates indicate that 8,500 MW worth

renewable energy projects could be developed in Africa in the Short-Term. In this regard,the funding mechanisms and instruments (for example-Clean Technology Fund)

reviewed above are important. Moreover, suggestions included in the Way Forward,

should be considered and converted into actionable strategies by the concerned countries,

donors, manufacturers and suppliers of renewable energy technologies, devices and

systems.

WORKS CITED

African Development Bank, December 2007, Come Rain or Shine-Integrating ClimateRisk Management into Operation, Working Paper No. 89.

African Development Bank, March 2008, Proposal for Clean Energy InvestmentFramework.

Global Energy Network Institute (GENI), Fall Quarter 2004, Enlightened PolicyAccelerate the renewable energy commercialization.

Intergovernmental Panel on Climate Change IV Assessment Report-Climate Change2007-Working Group II-Impact, Adaptation and Vulnerability, November 2007, Geneva,IPCC.

World Energy Council, June 2007, Energy and Climate Change Study Report.

Flavin C. and Aeck M., 2005, Energy for Development, REN 21 Network.

Panzu, V, 2006, Grand Inga Power Project, Power Point Presentation, RegionalElectricity Investment Conference, Windhoek, September 2006.


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Ram, Babu., 1995, Investigating Energy Transition and Strategies for Sustainable EnergySupply and Use in India with a Focus on Delhi and Calcutta, 16th World EnergyCongress, Tokyo.

Ram, Babu,2007, Africas Intra-regional, Inter-regional and Inter-continental ElectricityTrade-Techno-politico-economic Considerations and Future Prospect, 20th World EnergyCongress, Rome.

Ram Babu, 2006, Financing Investments in Liberalized Energy Markets, World EnergyCouncil Regional Seminar on Energy Market Reforms, 24-25 April, Algiers, Algeria.

REN21- Renewable Energy Maps

World Bank Technical Paper No. 240, 1994, Renewable Energy Technologies

Appendix 1:

Figure 1: The Congo River: A Renewable Energy Resource of Africa- with potential

to contributing to the Economic Renaissance of the African continent


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Appendix-2- Figure 2-Solar Map of Africa Appendix 3-Figure 3-Wind Energy Map

of Africa

Appendix 4: A List of Renewable Energy Projects in Africa (2010-2015)

Concentrating Solar Power Plants in Algeria, Botswana, and South Africa (800MW);

Small Hydropower projects in Sub-Saharan Africa (400-500 MW); Wind Energy Projects in Kenya, Morocco, Tunisia, Egypt, Cape Verde (900MW); Large Hydropower Projects (4000 MW) in Ethiopia, OMVG, Tanzania, Namibia,Zambia, Mozambique, and Cameroon Geothermal Energy Projects (300 MW) in Kenya and Djibouti Development of cogeneration utilizing bagasse from sugar factories as a fuel(2000 MW) in Algeria, Ethiopia, Kenya, Malawi, Sudan, Swaziland, Tanzaniaand Uganda and South Africa.

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