The missing pieces in Africa’s power puzzle

From the construction of the 10th largest hydroelectric dam in the world in Ethiopia to solar houses in Senegal, many African countries are working to improve access to energy for businesses and consumers. But while some have made great strides in providing electricity over the past decade, 600 million Africans remain not connected to the network.

Supply problems persist due to obsolete or non-existent infrastructure. The resulting power outages increase the cost of doing business, stifling investments in manufacturing and other industries. And, because their utilities are already in debt, governments are tempted to tax start-ups that might otherwise provide off-grid alternatives – hampering the adoption of new technologies in rural areas.

“While sub-Saharan Africa is the poorest region in the world, it has some of the highest electricity costs,” says Philippe Benoit, associate principal researcher at the Center on Global Energy Policy at Columbia University SIPA. “Often people pay for electricity from the grid as well as a back-up generator in order to have [several] hours of reliable power. “

Access to electricity varies widely across the continent. In Morocco, around 99% of the population has access to electricity, while in the Central African Republic, this figure is as low as 3%, according to the International Energy Agency. Retail prices also vary: the cost of a megawatt hour of electricity is $ 490 in Liberia, but $ 46 in Zambia, according to data company Statista.

Part of that variation is due to governance, says Benoit, who has worked on power projects in the Democratic Republic of Congo and Ethiopia.

Fifteen years ago, the two countries, which have significant hydroelectric potential, had similar access rates: 7% of the population of the DRC with access to electricity and Ethiopia 12%. Today Ethiopia has reached 47 percent, while the DRC has climbed to 9 percent, says the IEA.

“Government matters,” says Benoit.

$ 5 billion

Value of annual electricity transmission and distribution losses in sub-Saharan Africa

One of the main challenges in expanding access to electricity in sub-Saharan Africa is poor transmission and distribution infrastructure. A study by the Ghana Institute of Management and Public Administration published in November 2020 showed that losses in electricity transmission and distribution – when energy escapes from low-voltage distribution lines in the form of heat, for example – in Sub-Saharan Africa amounted to $ 5 billion per year. . South Africa accounted for $ 1.5 billion.

Hydroelectric dam: Inga 1 and 2 power stations on the Congo River, Democratic Republic of the Congo © Getty Images

Zainab Usman, Africa Program Director at the Carnegie Endowment for International Peace, points to a “fixation” on investing in power generation infrastructure, while leaving transmission and distribution unanswered: “We need to invest much more in power generation infrastructure. systems that can actually handle the surge ahead.

Ethiopia’s $ 4 billion Grand Renaissance Dam – under construction on the Blue Nile by Ethiopia without agreement from downstream countries Egypt and Sudan – will generate a forecast of 6,450 MW of hydropower .

Construction of the $ 4 billion Ethiopian Renaissance Grand Dam on the Blue Nile
Construction of Ethiopia’s $ 4 billion Great Renaissance Dam on the Blue Nile © AFP via Getty Images

The Ethiopian government has said some of the electricity will be sold to other countries, including Sudan, but the two governments are expected to build a transmission line between the dam and the Sudanese capital Khartoum, according to the program. African Union for Infrastructure and Development. With a length of more than 400 km, the AU estimates that the construction of the line would cost 1.8 billion dollars.

Installation of solar panels in Rwanda
Energy on the roofs: installation of solar panels in progress in Rwanda © Alamy

Usman says that multilateral development agencies can help countries by studying the feasibility of the transmission capacity of a proposed project and, in some cases, by funding it. But national governments also need to ensure that their systems are able to handle higher electrical load and the inevitable fluctuations in power supply.

Mini-grids are a technological solution to low electrification rates in rural areas. Modern versions are powered by an energy source – usually solar panels – combined with battery storage and a local distribution system. Rwanda, for example, has made great improvements in electrification rates using mini-grids.

In 2015, only 20% of the population had access to electricity; at the end of 2018, it was 51% – and solar mini-grids were responsible for a third of that growth.

According to Faith Chege, portfolio coordinator for East Africa at the Energy and Environment Partnership Trust Fund, which supports clean energy projects, the main obstacle to more mini-grid projects and solar houses is unpredictable regulation in most sub-Saharan countries.

“For example, in Kenya the tax administration could decide. . . they have to get taxes somewhere, ”she said. “So they increase taxes on solar house companies [where standalone photovoltaic systems cost-effectively supply power to a single house], which makes it a difficult environment to start a business.

Another challenge is the lack of coordination between the private and public sectors. Mini-grid companies may establish a service in an area without grid access only to find out soon after that the government is setting up transmission lines through a program supported by the World Bank.

More stories from this report

The Africa Minigrid Developers Association, an industry group, has been pushing for multilateral organizations such as the World Bank to give mini-grid developers the same subsidies as utilities because they are cheaper, Chege says.

“During Covid-19, they also showed that they understood the customer much better than the public service,” she adds.

Inequalities remain, however. Kenya now gets more than half of its electricity from geothermal energy and even has a surplus. The government is trying to stimulate demand for electric vehicles to absorb the excess supply, Chege says. But, for many other African countries, surplus electricity is still a distant goal.

Previous Cubs 7, Padres 2: Everyone digs the long ball
Next Unravel unlisted assets