• Environmental Law and Regulation Society

The renewable energy transition in Africa: potential, politics, and challenges

By Catherine Cheung


Background

Renewable energy infrastructures and its capacity in Africa is currently lagging behind most of

the world, with only 3% of Africa’s generated electricity coming from solar and wind, compared to 7% in other regions of the world (1).


Many believe Africa has massive potential to become a powerhouse in renewable energy while simultaneously leading to economic growth and sustainable development. Increasing reliable and sustainable energy networks is also an effective method of creating affordable electricity. This would allow half the population of the continent, more than 600 million people, who currently live without electricity, access to it, bringing more out of poverty.



Why Africa has massive potential to become a leader in renewable energy

Firstly, the falling global costs of generating electricity with most renewable energy sources

could contribute to a more affordable and prominent green transition for Africa. Significantly, a

sharp drop of 77% has been observed for costs of Solar photovoltaic sources from 2010 to 2018. With the continent’s geography, solar power capacity is almost unlimited; hydro, wind, and energy sources are abundant as well (2).


Secondly, scientific advances through research in renewable energy may prove significant. For example, the development of carbon capture and storage, which captures CO2 directly from pollution sources and sequester it from entering the atmosphere. Estimates suggest that this will become increasingly prominent to reduce emissions, although it may be a slow progress due to lack of industrial testing and thus, reliability. Energy storage, on the other hand, has advanced considerably, solving most supply fluctuation problems (3).


Thirdly, both governments and private-owned organisations on the international stage have

shown growing interest in investing in Africa's renewable energy infrastructure projects. China is the largest investor in the power sector in sub-saharan Africa, investing over USD 30 billion in Africa’s energy sources from 2000 to 2016. The IEA’s analysis shows that around 56% of these projects used sources of renewable energy (4).



Current situation

Many countries in Africa are starting to embrace renewable energy and are scaling-up

preparations through support policies, investment promotion and regional collaboration. For example, Morocco has begun delivering significant amounts of clean energy since 2016 by

building the largest concentrated solar park in the world, which continues to expand. Botswana and Namibia also have plans to jointly develop infrastructure for solar energy. However, this growth is not consistent throughout the continent (5).


The growth of renewables in South Africa was almost at a total halt after changes in its government policies. Their first renewable energy auction in 2011 gained international attention, leading to a 600% expansion of their renewable energy capacity. But, no auctions have been held since 2014, with renewable capacity growth having declined since its peak in 2016 (6). Additionally, the state-owned energy utility, Eskom, relies heavily on aging coal-fired power stations to produce electricity. This, coupled with government failures and corruption has been said to decrease international investment. There has also been fear that transitions to renewable energy would lead to job losses in the coal and mining sector. However, the case study of Orsted, a Denmark energy utility, demonstrates that a functional business model and clear communication with stakeholders throughout the transition can prevent job losses. Orsted generated around 85% of electricity from fossil fuels in 2008. By 2019, it became the world’s largest offshore wind power generator, with 86% of its total electricity capacity coming from renewables (7).



Challenges

Significant challenges and barriers hinder the renewable transition in the continent.


1. Financing costs

There are higher costs of capital due to perceived larger risks of investments in African markets which are generally still developing and emerging. For renewable energy sources such as wind and solar power, which require most costs upfront, this is a huge barrier. This contrasts with gas and coal generation, where fuel costs play a bigger role (8).


2. Inadequate infrastructure and grids

There is inadequate electricity transmission and distribution grids, making integrating the output of wind and solar plants more challenging. Additionally, road infrastructure is lacking in some areas. This means some sites are difficult to access, especially in rainy seasons. Thus, finding accessible and appropriate sites close to transmission capacity may be a challenge (9).


3. Electricity market rules

The design of electricity market rules which focused on supporting monopoly incumbents, namely Eskom who runs the fossil and hydro generation, will need major modification. As variable wind and solar sources require different rules, the creation of a robust framework to system planning and operations may take time (10).


4. Politics & Corruption

The widespread corruption in Africa has been identified in various cases. There have been reports on bribery being used to ensure lucrative fossil fuel contracts are renewed; this completely undermines the progress of renewable energy. Developers and operators may become the victim of bid-ridding, with government corruption driving out certain bids for a pre-preferred provider due to personal incentives, or attempting to extract brides from them in exchange for granting favorable renewables contracts and licenses.


In 2017, a failed renewable project in Sub-Saharan Africa arising from corruption at the award process was decisive in its ultimate failure. Although this suggests that these projects are approved and “protected”, corruption starting early on in projects is difficult to curb later on (11).



Conclusion

Despite Africa’s energy potential mainly being untapped, progress has been seen in some

countries. It is expected to be a slow growth, however, as projections suggest that fossil fuels

and traditional biomass (eg. wood, charcoal) will play an even bigger role in power generation in 2050; until appropriate infrastructure is set in place (12). Governments will need to undergo a change including forward-looking leadership, realistic planning, and proactive management in order to drive the transition and attract investment. This is crucial as there is already an existing widespread lack of access to electricity. Current and planned efforts to provide access to modern energy services barely outplace population growth, which is expected to double by 2050. The challenges of meeting electricity demand and creating sustainable networks to decarbonising Africa continue to be a high priority. But to achieve their goals, action is expected to be required at a larger scale and at a quicker pace.



(1) https://www.brookings.edu/blog/africa-in-focus/2021/05/05/figures-of-the-week-africas-renewable-energy-potential/

(2) https://www.afdb.org/en/news-and-events/why-africa-is-the-next-renewables-powerhouse-18822/ (3) https://www.brookings.edu/blog/africa-in-focus/2021/05/05/figures-of-the-week-africas-renewable-energy-potential/ (4) https://www.sciencedirect.com/science/article/pii/S0305750X20304939 (5) https://www.afdb.org/en/news-and-events/why-africa-is-the-next-renewables-powerhouse-18822 (6) https://energymonitor.ai/tech/renewables/politics-are-hindering-renewables-in-southern-africa (7) https://www.iisd.org/articles/eskom-key-changing-south-africa-energy-mix (8) Ibid 6 (9) Ibid 6 (10) Ibid 6 (11) https://www.kroll.com/en/insights/publications/compliance-risk/green-rush-to-renewables-perfect-climate-for-corruption (12) https://www.brookings.edu/blog/africa-in-focus/2021/05/05/figures-of-the-week-africas-renewable-energy-potential/

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