Challenges and Opportunities

A successful sustainable energy strategy must build and massively scale up renewable energy and energy efficiency markets while addressing broader social and development objectives. Although this may take several decades, immediate actions are needed to set the ball rolling.

Success depends on developing the right mix of:

· regulatory, legal, and institutional frameworks;
· energy and related policies;
· public and private sector involvement; and
· financing mechanisms.

Many models are possible and there is no one package that can be universally applied. Certainly no obvious best practices have yet emerged. Indeed, as most of the relevant issues tend to be specific to country and local circumstances, a variety of instruments and supporting activities will be needed.

Despite all the advantages of alternative energy systems, they are still not exploited to the extent they could be, and suffer from a lack of genuine and sustained attention. To increase significantly their use in Sub-Saharan Africa, it is essential to re-think fundamentally the role of energy in the development context in most of the countries. At present, there are few operating frameworks for developing alternative energy systems that are appropriate to African social, economic, and political contexts. In addition, the multiplicity of decision-making centres results in dispersed projects that militate against the formulation of a coherent and focused policy on alternative energy development. In many poor regions, alternative energy sources are still regarded as mere experiments. And in the implementation of most projects only the technical aspects are considered truly important.

Sustainable energy involves a fundamental shift towards greater diversity, from conventional systems with relatively few actors and large supply-side structures, to systems with a multitude of small, scattered installations which are manufactured, distributed, marketed, and operated by a myriad of individuals or small firms. Getting from here to there is a big challenge, particularly for Africa, with its generally weak institutional and financial capacities. Meeting this challenge will require action to overcome several barriers:

· Fundamental restructuring of the institutional building blocks of energy markets, which were designed to promote and sustain energy systems that are based on conventional fuels. The priority is to construct new regulatory and legal frameworks that define the rules of the game in energy markets, rules which must help to advance social priorities such as poverty alleviation and rural development as well as the growth of sustainable energy enterprises and markets.

· Transitional support to help build sustainable alternative energy enterprises by tackling market failures and barriers, especially those associated with a lack of relevant information, financing, and incorrect energy pricing and taxation.

· Further development, adaptation, and standardisation of alternative energy technologies to improve applications to meet the varied demands of a wide range of African contexts.

· Facilitation of the growth of sustainable energy through programmes which promote linkages with broad development needs, including sectoral development projects, regional trade and cooperation, and capacity building at many levels.

Following an appreciation of the present energy situation in the region, the basic elements of these four required types of action (and the challenges and opportunities that they imply for development assistance efforts) are explored individually in the remainder of this chapter.