Clean energy, climate change and poverty reduction: Part IV

Renewable Energy

Renewable Energy

In this forth article on the subject of clean energy, climate change and poverty reduction we continue with emerging trends and case studies as reported in the 2015 Africa Progress Report (“APR”). The story of Rwanda continues to inspire as the country continues to develop solutions. Starting from an extremely low base, Rwanda expanded electricity access by 160 per cent in just three years between 2008 and 2011. New plans to scale up both access and power-generation capacity were then developed. The following paragraph summarises some of the work that has been going on:
“Renewable technologies are transforming what is possible through decentralized provision. One example comes from a private initiative to extend Rwanda’s power into areas beyond the grid. Ignite Power, the first part of an ambitious plan aimed at achieving universal access to clean energy coverage, brings together the combined capabilities of many organizations, including Bloomberg New Energy Finance, the Milken Institute, a Rwandan government partner and several private actors. The first pillar is off-grid solar technology: a pre-paid system that can power four lights, a radio and television, and charge cell phones. The total cost for a household would start at just over US$1 per week under a “rent-to-own” model. In September 2014, Ignite Power signed an agreement to install the technology for 250,000 to 1 million households. Less than three months later a pilot phase of 1,008 units was completed. The company then gearing up to provide 750,000 units in the next two years to 2016. The project has lessons that are of wider application. First, it has demonstrated the potential for speedy delivery, going from vision to plan and deployment in less than two years. Second, the active participation of government has been critical to the success of the project. The Rwandan government has provided credit guarantees and, most importantly, a stable planning environment for private investors.”

We also take a look at Ethiopia that has been at work over the past few years to change the power outlook in the country, and to emerge as a net exporter to the region. The following paragraph paints the picture:

“As one of the world’s highest-growth economies, Ethiopia has seen demand for electricity rise sharply. Increased investment has expanded net electricity generation fivefold. Even so, power shortages continue to hold back economic growth and grid coverage is limited, with just 15-20 per cent of rural Ethiopians having access to electricity. Ethiopia’s Growth and Transformation Programme (2010-2015) and its successor (2015-2020) is changing this picture. The strategy aims at another fivefold increase in power generation, from 2,000 MW to 10,000 MW, with a doubling of grid connection from 2 million to 4 million households and 75 per cent of villages connected to the grid.

Large-scale public investments in hydropower have underpinned the strategy, including the Gilgel Gibe 3 dam and the Grand Ethiopian Renaissance Dam, a 6,000 MW hydropower project. The World Bank forecasts that Ethiopian electricity sales will rise from 4,000 MW in 2011 to 17,000 MW in 2020. By 2030, the aim is to export at least 5,000 MW, up from just 223 MW now. Total investment requirements are estimated at around US$2 billion annually, which is double current levels. The World Bank and the African Development Bank (AfDB) are financing a transmission line capable of transporting 2,000 MW of electricity from Ethiopia to Kenya.

Ethiopia is also investing heavily in non-hydro renewable development. New public-private partnerships are emerging. US-Icelandic company Reykjavik Geothermal has signed a US$4 billion agreement to build a 1,000 MW geothermal plant by the beginning of the next decade. One of the region’s largest wind-farm projects, the 120 MW Adama project, is under development through a US$290 million French investment. The emphasis on renewable energy will lead to the abatement of 250 carbon dioxide equivalent (“MtCO2e”) by 2030, which is a decrease in greenhouse gas emissions of up to 64 per cent compared with a business-as-usual mode”.

Many other African countries can certainly learn from this. These examples bring hope and clearly show that African can take a leadership role especially if Governments cooperate at a regional level. Ethiopia is not taking a business as usual approach. They are accelerating their programmes at rapid speed and have set ambitious targets.

We now illustrate another success story of Kenya in trying to reduce the cost of power through another off-grid initiative. The following paragraph summarises the initiative:

“Azuri Technologies in Kenya produces solar home systems that incorporate a pay-as-you-go controller. This is activated by a code which is obtained by purchasing a scratchcard and is then sent by SMS to Azuri. Customers pay an initial fee of about US$10 for the installation of the lighting system in their home, comprising a 2.5 watt peak capacity (Wp) solar PV module, a battery, two LED light bulbs and a USB socket for charging phones. They pay about US$1.50 for a weekly scratchcard, which is about half of the typical US$3 a week spent on kerosene for lighting. After 18 months, users can pay a fee of about US$5 to have the system permanently unlocked or they can upgrade to a larger system.
Following a pilot in 2011, Azuri began commercial sales in Kenya the following year and 2,400 systems had been installed by March 2013. By 2015, the system was expected to be available in 11 African countries. An impact study in 2014 found that the main use of the lighting provided by the solar home systems was for studying and that mobile phone charging was the second most important use of the systems.”

These initiatives can certainly be replicated across Africa. It will be interesting to know if the system is now available in 11 Africa countries was projected. Financing may be the main barrier. We continue with more case studies, emerging trends and recommendations in the next articles.