Monday, December 12, 2011

Promoting Sustainable Energy Access for Africa

Energy access and climate change resilience are intrinsically related. Access to electricity is essential to fulfill basic household needs such as lighting, cooling, heating and access to drinking water and sanitation services. It is also critical to improved productivity, competitiveness and employment, which leads to expanded job opportunities and economic growth. Climate change poses a major development challenge for Africa threatening food and energy security through higher temperatures, extreme events, and changes in rainfall. Energy access is vital for Africa’s development, its achievement of the MDGs, and its resilience to climate shocks and global economic shocks. Climate resilience approaches to energy access development is important for Africa.

Addressing climate resilience is also an opportunity for Africa to leapfrog towards more sustainable energy technologies. For growth to be sustainable, African countries need to build energy systems that are resilient to climate variations. Climate variability is hardly a new factor in the region’s history, but with global warming, Africa’s vulnerability is deepening, making it the most exposed region in the world to the impacts of climate change. To increase countries’ resilience, adaptation and mitigation strategies have to be simultaneously implemented. Adaptation measures can help to reduce the vulnerability of electricity systems to climate change by building capacity, improving information for decision making and integrating climate risks into management and operation decisions. Setting the continent on a sustainable energy production and consumption path is critical to Africa’s development vision while contributing to the global challenge of mitigating GHG emissions. A diversified, greener energy portfolio can boost service reliability and support energy security while lowering the impact on the environment.

Global Context

International community is keen to give renewed attention to Africa’s challenges. The UN General Assembly has designated 2012 as the International Year of Sustainable Energy Access for All. Energy access will be a major theme in the lead-up to Rio+20. In June, the high-level Ministerial Meeting on Energy and Green Industry adopted the “30-30-30” goals. The goals outline a set of three objectives to achieve by 2030: universal energy access, a 40 percent increase in energy efficiency, and a 30 percent share for renewable energy.

New funds have been pledged to further the green growth and associated development objectives of developing countries. In Cancun in December 2010, the Conference of Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC) recorded Copenhagen Accord pledges for $30 billion
over three years, expecting to fast-start funding for Africa, least-developed countries, and small island developing states. An additional $100 billion a year was also announced for developing countries by 2020. The African Energy Ministers Conference came at a critical juncture in the wake of these COP pledges and in the lead-up to the December 2011 COP17 in Durban, South Africa. Specifically, the Transitional Committee for the design of the Green Climate Fund (GCF) is currently defining the scope, scale, and areas of prioritization for the intended scale-up of long-term financing for developing countries. Initiatives conceived at the Conference could become points of reference for the GCF or for other climate-related financing initiatives in future.
The African Energy Ministers Conference was an important milestone on the road to Durban. The upcoming COP17 to be held in Durban offers a unique opportunity to highlight Africa’s energy challenges and gain global support to a transformational agenda that will help secure Africa’s energy future in a sustainable manner. The twoday Africa Energy Ministers Conference in Johannesburg facilitated dialogue to reach consensus on the priorities for supporting Africa’s energy development agenda in a resilient manner. Africa’s leaders were presented with an opportunity to share experiences and discuss low carbon strategies to scale up energy access in the continent; investments and concerted actions required to foster regional trade; and climate finance options for Africa’s energy investment priorities.

Africa’s Energy Challenges

Energy access rates are unacceptably low in Africa, affecting human and social development. Only 42 percent of Africans have power in their homes. In Sub-Saharan Africa, the electricity access rate declines to 31 percent, the lowest rate in the world and half the rate of the next lowest region, South Asia. In all, 585 million people in Sub-Saharan Africa are excluded from electricity service, accounting for 40 percent of the worldwide un-served population. Scarcity of power and low access affects the delivery of social service and the quality of life. Without electricity, clinics cannot safely store vaccines, food goes wasted at home and in shops, and children cannot study at night. Lack of electricity exacerbates poverty as it precludes home-based productive activities that are a primary source of livelihoods and local economic development in the poorest countries. For other household energy needs, about 80 percent of people rely on traditional use of solid biomass, far more than in any other region of the world.

Deforestation can be a serious consequence of concentrated biomass use, especially in the outskirts of urban areas. And indoor air pollution resulting from incomplete combustion of solid fuels in traditional stoves is a leading cause of premature mortality and illnesses. Deficient power infrastructure is hindering long-term economic growth in the African continent. The entire installed generation capacity of the continent is 124 gigawatts (GW), of which 94 GW is divided between North African countries and South Africa. The rest of the Sub-Saharan region relies on an installed capacity of only 30 GW, about the same as Norway, a country with less than one percent of Sub-Saharan Africa’s population. In addition, as much as one-quarter of it is now unavailable due to age and poor maintenance. The small scale of most national power systems and the widespread reliance on expensive oil-based generation have made the cost of producing power in Sub-Saharan Africa exceptionally high. More than 30 countries have experienced power shortages over the last few years, which mean substantial losses in foregone sales and damaged equipment. The economic costs of power outages, including the costs of running backup generators and of forgone production, typically range between 1 and 4 percent of GDP. Overall, deficient power infrastructure is weakening the competitiveness of Africa’s firms, holding back economic growth.

Africa needs to scale up energy infrastructure to strengthen energy security and climate resilience. Using 2005 as a baseline, the World Bank estimated that Sub-Saharan Africa needs to add 7 GW of new generation capacity each year through 2015 to meet suppressed demand, keep pace with projected economic growth, and support the rollout of further electrification. Nearly 31 GW of generation projects have been planned for the next 5–7 years in Sub-Saharan Africa. Although not sufficient to fully bridge the region’s energy deficit, this capacity addition is critical progress. Once completed, the additions will double the overall installed capacity of the Sub-Saharan region (excluding South Africa). However, less than 16 GW of additional capacity are currently in pipeline; an additional 15 GW should therefore be prepared, financed and implemented as soon as possible.

A substantial effort in electrification scale-up is needed to reach universal access in the foreseeable future. Expanding access to energy is a social imperative for Africa. Efforts to promote energy access ought to take into consideration rapid urbanization and population growth in Africa. By 2030, nearly half of Africans will be living in urban areas, with the urban population exceeding rural population by 100 million by 2035. At present rates of electrification, only 45 percent of Africans will have electricity in their homes by 2015 and less than 60 percent by 2030. In 2030, 654 million Africans will still lack electricity service, accounting for half of the world’s un-served population. Reaching the goal of universal electricity access by 2030, as put forward by the Advisory Group on Energy and Climate Change set up by the United Nations Secretary-General, would require that 150 million people are added to electricity service by 2015 and 512 million by 2030, including 460 million in Sub-Saharan Africa alone. Cleaner energy solutions will help leapfrog African countries to a more climate-resilient future.

Achieving universal electricity access requires diversified approaches. The scale and nature of the electricity access gap and the locations involved mean that electricity will need to be provided through both centralized and decentralized energy technologies and systems, including grid, mini-grid, and off-grid solutions. Grid extension is often the least-cost option in areas with high population densities, while mini-grid and offgrid solutions are more efficient options to bring electricity into sparsely populated peri-urban and rural areas. Renewable energy technologies are ideally suited to mini-grid and off-grid applications and can help significantly scale up electrification in Africa without major harm to the environment and contribute to greater climate resilience. Facilitating the spread of low-cost and sustainable lighting solutions is critical to meeting basic needs.

Until the energy access gap is closed, millions of people can be taken out of the dark through the wide deployment of off-grid lighting solutions. Today, climate-friendly solar and other lighting products offer a valid alternative to the expensive, inefficient, and polluting lighting sources such as candlelight or kerosene lamps on which a large part of Africa’s population still relies. Access to sustainable cooking and heating solutions is paramount to address the health and environmental threats caused by the use of traditional biomass. The transition to modern fuels should be facilitated using tailored approaches that take into account local constraints such as fuel availability, affordability and existence of distribution channels. Where affordability issues prevail, government interventions should focus on promoting more efficient and sustainable supply of biomass. Equally important is to improve the efficiency at which people burn biomass by facilitating the development and commercialization of improved cook stoves and the accompanying sustainable business models to deliver and service them.

Africa’s Energy Opportunities

Renewable energy can help bridge Africa’s energy deficit and further enhance climate resilience, reconciling several development imperatives. The development of renewable energy sources as part of a diversified portfolio can reduce vulnerability to supply disruptions and market volatility while allowing for a greener energy mix.

Africa’s abundant conventional sources will remain a prominent part of the energy mix. Currently, thermal generation based on fossil fuels dominates energy supply in Africa. This is a result of the relative abundance of conventional energy sources. However, natural gas can serve as a bridge to a more sustainable energy supply and is already playing a critical role in the primary energy portfolios of many developing countries.
Africa’s enormous energy potential can be effectively and sustainably unlocked through the development of regional power trade. Regional power trade is key to Africa’s energy future, as resources tend to be heavily concentrated and most countries have energy systems that are simply too small to efficiently produce power.

Deeping regional power trade will allow for the development of the needed scale and significantly lower power costs, which in turn will spur productivity and competitiveness. Further, trade will put Africa on a less carbon intensive path by allowing the diversification of the energy portfolio at the power pool level. Regional power trade would allow hydropower to provide as much as 48 percent of the continent’s energy needs, displacing as much as 20,000 MW of thermal power in the process and saving 70 million metric tons of carbon dioxide emissions annually.

Minister Conference Proceedings Report Road to Durban: Promoting Sustainable Energy Access for Africa. Johannesburg, South Africa.September 15th - 16th, 2011