Lack of access to modern energy in much of sub-Saharan Africa is one of the main contributors to the region’s failure to develop; yet dozens of growing energy industries offer the private sector uncountable opportunities for investment far beyond what was once thought as just oil, gas, coal and electricity.
Energy offers opportunities for increased education, better health care, job creation and enterprise development in both rural and urban areas. Only with coordinated efforts by the public sector in conjunction with civil society can policy makers on national and regional levels ensure this situation is reversed.
Roughly 80 percent of sub- Saharan Africa is relying upon traditional biomass resources for energy albeit development is hindered through deforestation, desertification, poor health from smoke inhalation and poor use of human resources resulting from fuel wood collection.
The majority of sub-Saharan African countries are net petroleum importers draining on precious foreign exchange reserves: thus environmental degradation and the inability to capture economic benefits to support their own development.
But investment opportunities range from small-scale household and village-level activities to major national and regional power supply and distribution services. For every entrepreneur there is an appropriate size of energy investment that results not only in profits but also in rippling affects that support the surrounding communities to participate in further investment activities.
What is the way forward?
Infrastructure
Institutions such as the Southern African Power Pool (SAPP), West African Power Pool (WAPP) and East African Power Pool (EAPP) have been created over the past decade to ensure these three regions will be able to supply, monitor and transmit sufficient electricity resources as to make them fit for further investment and development.
Programmes like the EU-ACP Energy Facility have supported projects in regional energy infrastructure but there is much more that needs to be done. Even when projects are underway, Africa’s private sector has been left out of much of the engineering, construction and implementation of projects with the sector dominated by multinational firms and cutting Africa out of value added projects in their home countries.
Technology Transfer & Energy Efficiency
From energy production to distribution and use, new technologies are being developed on a daily basis. Countries like the US and China along with regions like the European Union are plowing billions into research and development (R&D) in the energy sector, yet this R&D gap is growing even more across Africa.
Despite a lack of R&D, African companies are developing technologies that use even more appropriate applications for Africa than those developed in the West, from using local and lower cost materials to technologies that are tailored to Africa’s diverse climates and needs. Yet many of these new technologies are being developed, the funds to bring them to market are limited, in part inhibited by the private sector’s desire to either introduce Western and Asian technologies or by the lack of appetite for risk to test new technologies in home markets.
In the meantime, simple and cost-effective technologies and applications can be undertaken to reduce the burden on already under supplied energy markets. Though Africa hasn’t been as successful as it had hoped in accessing carbon funds through the UN’s CDM programme, those projects that have been successful were predominantly in the area of energy efficiency.
Renewable Energy
Nigeria, Angola,Uganda and South Africa have access to fossil fuels that they need, yet for those who must rely on imports, energy insecurity is made worse through unstable commodity and currency markets. But natural resources in Africa offer opportunities to diversify their national energy mixes and increase rural and urban access to modern energy.
Biofuels is viewed as the solution. But they are more than just the chance for a country to reduce its petroleum imports by 5 percent , 10 percent or even 20 percent for exporters to export even more as their own needs fall. Biofuels aren’t just for cars, but for industrial use as well as smaller applications like household use or electricity generation.
Hydropower has long been a source of green energy in Africa, and countries like Mauritius are relying more on co-generation while Kenya and Ethiopia explore more geothermal.
But until recently, investment in wind energy and solar power in Africa had been limited because of the perceived lack of return from domestic energy sales combined with the high capital costs associated with the technologies. However, prices for PV panels and wind turbines are dropping as technologies become more advanced, allowing more opportunities for investment in Africa. African researchers are working on ways to better adapt those technologies to Africa using local resources and lower-cost materials to ensure that renewables are more attractive and more accessible in African markets.
Notwithstanding financial challenges many institutions are struggling to pick up with new technologies for small scale installation. Organizations like UNEP have developed their “Idea Lab for Clean Energy Finance” that includes capacity building for lending institutions and seed capital for companies looking to get into the renewable energy space. Other groups like Arc Finance are developing the growing “micro-finance for energy” sub sector to ensure that rural households and communities are able to tap into renewableS like biogas and solar.
Household Energy
Africa’s households are the most energy insecure and the most energy inefficient. The introduction of modern bioenergy into households provides the most “quick-wins” in terms of energy-related development: improved women and child health through the reduction or elimination of smoke in the household; reduction of deforestation as forest resources are used less or not at all as main sources of household energy; improvement in education levels as children and adults have better access to electricity for reading after sunset; opportunities for better jobs as the health and education levels of rural populations increase.
Household technologies that are affordable and practical are important. Some such technologies are ethanol stoves for cooking, ethanol lanterns for lighting, biodiesel engines for electricity production, biogas installations for both cooking fuel and electricity production, and solar water heaters. All of these new industries are proven and in need of market introduction, local manufacture, distribution, sales and training all in addition to production of the actual bioenergy to run them.
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