Energy in Africa Today

The severe problems that afflict the energy sector in most SSA countries are holding back rapid economic growth and its benefits. Throughout the region, power and fuel cut-offs are frequent, access to modern fuels and electricity is poor and unreliable, energy utilities are bankrupt, and infrastructure suffers from a chronic lack of investment. Per capita commercial energy use is less than 10% of European levels (less than 3% if South Africa is excluded) and has not grown since 1980 (see Figure 4).

"Sustainable energy involves a fundamental shift towards greater diversity, from conventional systems with relatively few actors and large supply-side structures, to new systems with a multitude of small, scattered installations which are manufactured, distributed, marketed, and operated by a myriad of individuals or small firms."

Yet the region is well endowed with diverse, under-exploited non-renewable and renewable energy resources. In 1997, proven oil reserves amounted to 9.3 billion tonnes and natural gas reserves to 9.9 trillion cubic metres, representing 6.7% and 6.8% of global reserves respectively (British Petroleum, 1998). Recent exploration along the west coast suggests an additional 2-3 billion tonnes of oil reserves. Proven coal deposits stand at 61.7 billion tonnes, almost 6% of the world’s reserves (British Petroleum, 1998). The region possesses 17% of the world’s untapped hydropower potential, a quantity sufficient to increase its electricity capacity fourfold. There are also significant uranium de-posits, many promising wind and geothermal sites, and an abundant solar resource. While traditional biomass is an increasingly scarce resource in many parts of the region, agricultural and forestry residues as well as dedicated crops offer a significant untapped renewable biomass resource.

Traditional biomass, mainly fuelwood and charcoal, is by far the most significant fuel in Sub-Saharan Africa. With the exception of South Africa, biomass accounts for over 70% of total primary energy consumption. These fuels are used mainly for cooking (with conversion rates of only 15-20%) and mostly by the poor, which explains their importance on the energy scene. The problems associated with fuelwood are often greatly exaggerated and based on extremely weak descriptive data. Nevertheless, there is no question that biomass energy supply and use in SSA is responsible for much eye and respiratory disease from cooking fires/stoves and, in some places, for deforestation or forest degradation, and for heavy time burdens for collecting the wood or heavy cash expenditures for buying it.

Figure 4. Sub-Saharan Africa Per Capita Gross Inland Energy Consumption

(1) Includes nuclear, hydro and wind, net imports of electricity and other energy sources

Source: (European Commission, 1997)

The Regional Context The 48 ACP countries of Sub-Saharan Africa differ greatly. National population varies from under 500,000 (Equatorial Guinea) to 119 million (Nigeria). Land area ranges from 450 km2 (Seychelles) to 2.5 million km2 (Sudan). Forest cover is less than 2% in some arid countries and over 50% in the humid zones. Per capita GNP was only US$80 in Mozambique in 1995, but over US$3,000 in Botswana, Gabon, Mauritius, and South Africa. While a few countries have seen their economies shrink by over 4% a year, a handful have been growing at over 6% (Lesotho, Mozambique, Sudan, and Uganda). Some countries are significant energy exporters, others import all their commercial fuels. Despite this enormous diversity, some broad generalisations are nevertheless valid. Sustainable energy strategies must be tailored precisely to the very different situations of each country, but some common demographic and economic features are central to their development: · Sub-Saharan Africa includes 30 of the 49 countries classified by the World Bank as low-income. Not surprisingly, the alleviation of poverty is a top policy priority for many governments and donor agencies. Sustainable energy applications that can stimulate economic activity and generate incomes, while improving access to health care, education, safe water, and sanitation, are urgently needed. · Africa is the most aid-dependent region in the world. In 1994 external aid equalled 16.3% of GNP, almost 10 times more than the second most aid-dependent region (Latin America and Caribbean, with 1.7%). External debt in 1995 averaged US$463 per person, 81% of regional GNP and 240% of export revenues. These high levels of aid dependence and indebtedness call for wise donor strategies, national investment choices and fiscal policies. · Population growth rates are the highest in the world: 2.8% annually in 1980–1995 and 2.6% projected for 1995–2010. The population of the continent is expected to more than double by 2025 to reach 1,270 million. Living standards can be improved only if energy services increase at a much faster rate than population growth. This presents a formidable challenge for the region, as well as an important opportunity for greater penetration of renewable energy and energy-efficient technologies. · Urban population growth rates are very high - well over 5% per year for the whole region. By 2025 half of all Sub-Saharan Africans may be city-dwellers, increasing the urban population from about 200 million today to around 630 million. Cities, towns, and peri-urban areas must be a principal focus of long-term economic development and the establishment of efficient infrastructure. · Today two-thirds of Africans live in rural areas, often in dispersed settlement patterns. Many countries are placing an increasing priority on promoting rural economic growth in order to improve living standards and stem migration to cities. In rural areas, there are huge unmet demands for modern fuels and electricity to meet basic needs and generate income. Fed up with waiting for the arrival of the electricity grid, millions of rural Africans are turning increasingly towards stand-alone alternatives such as diesel generators and PV systems. Mounting evidence from within the region suggests that there is an unexpectedly high capacity and willingness to pay for these alternatives, as noted in the section on Building Sustainable Energy Enterprises (p.27) and Box 5 (p.31). Democratisation, decentralisation, and market reform efforts initiated in the past decade have begun to yield more robust private sector activity in many countries. Africa’s annual GDP growth, which averaged 1.6% between 1980 and 1994, climbed to 2.8% in 1995 and 4.8% in 1996. Foreign direct investment is increasing rapidly, rising from US$1 billion in 1990 to US$5 billion in 1995. Active equity markets have emerged in many countries. The total value of these markets doubled between 1989 and 1996 and, outside of South Africa, increased nearly nine-fold, from US$5 billion to US$43 billion. At the same time, the World Bank has recently launched schemes to tackle the debt burden of the poorest countries in the region. These trends, together with encouraging national political and economic transformations, have inspired optimism and renewed hope that the problems outlined above can be tackled. The new, upbeat mood in the region, though far from universal, is very different from the conditions created by stagnating economies in the 1980s and early 1990s.

Efficiency improvements and/or smoke reduction, plus substitution by modern liquid fuels, are the main demand-side remedies to these problems. They are most appropriate and easily realised amongst urban and peri-urban populations and rural-based industries, where biomass fuels such as fuelwood and charcoal are usually purchased; saving energy therefore saves money, and alternative fuels are widely available. In rural areas these remedies, as well as supply-side strategies such as planting energy woodlots, are much more problematic because "energy" must be approached indirectly as just one aspect of complex land management and resource-use strategies. Successful interventions are therefore typically slow to diffuse and dependent upon strong grassroots institutions. Two of the main opportunities, control and management of forest resources by local communities, and improved cookstoves, are discussed further in the sections on Reforming Forest Ownership (p.27) and Technology Development and Standards (p.36).

"Traditional biomass, mainly fuelwood and charcoal, is by far the most significant fuel in Sub-Saharan Africa. With the exception of South Africa, biomass accounts for over 70% of total primary energy consumption."

Table 2.1 gives a breakdown of final energy consumption in the region and shows clearly how biomass, followed by oil (much of it for transport) and electricity, dominates energy consumption. The table also shows South Africa’s major impact on the region’s energy statistics.

Efficiency improvements and/or smoke reduction, plus substitution by modern liquid fuels, are the main demand-side remedies to these problems.

REGIONAL EXPERIENCE WITH SUSTAINABLE ENERGY

As this chapter is mainly concerned with increasing the role of renewable energy and energy efficiency in the region, it is worth briefly summarising the status of markets for these resources in SSA today.

The largest potential source of renewable energy in SSA is hydropower, which has already been widely developed as a large-scale grid-connected resource, but less than 10 GW of the estimated 200 GW potential has been exploited. Nearly all of the region’s major hydro facilities were built before 1980, and only 2.4% of the new hydro-capacity under construction in the developing world in 1998 was taking place in Africa (Vansant, 1988). Any further development of large dams in the region must address social and environmental impacts, and, in particular, the significant financial risks associated with geological uncertainties, long lead times, and uncertain regional politics.

Medium- to large-scale grid-connected power generation from other renewable resources, most notably wind and bio-mass, can be economically competitive under many conditions. There has been remarkably little development of such resources in SSA. Agricultural processing industries in several African countries have for many years used residues to generate steam and electricity for their own use, but low tariffs for grid supply (often below long-run marginal cost) have forced many to cease electricity production. The GEF-supported bagasse cogeneration project in Mauritius marks the first major attempt in the region (outside South Africa) to introduce modern cogeneration equipment and to sell significant amounts of biomass electricity back to the grid. Mini- and micro-hydro systems can also be economically feasible and have been installed in several countries, although many of the older facilities are currently in need of repair. In most of SSA, the laws that apply to the electricity sector have been a major obstacle to the wider use of these distributed resources for grid power. These laws need to be reformed to accommodate firm power-purchasing agreements that would enable cost-recovery and profit-making for independent power producers (IPPs) and other potential developers.

Table 2.1: Final Energy Consumption in Sub-Saharan Africa

		Coal	Oil	Gas	Electricity	Total ‘Modern’	Biomass	Total Overall
Mtoe
	SS Africa	19.2	42.0	1.5	17.3	80.0	184.8	264.8
	SS Africa less RSA	2.3	25.5	0.9	5.0	33.7	175.2	208.9
Percent
	SS Africa	7.3	15.9	0.6	6.5	30.2	69.8	100
	SS Africa less RSA	1.1	12.2	0.4	2.4	16.1	83.9	100

RSA: Republic of South Africa

Note: Transport accounts for >50% of final oil consumption. Biomass includes small amounts of modern conversion and use.

Source: (IEA, 1997)

Smaller-scale, off-grid applications of renewably generated electricity have been widely demonstrated in SSA. In some areas private markets are well developed. Solar PV systems for homes and small commercial applications have become commonplace in many countries, and local entrepreneurs are involved in all stages of system design, installation, and maintenance.

Approximately 100,000 small-scale solar PV systems have been installed in Kenya, South Africa, and Zimbabwe alone, the result of a variety of private sector and government-led initiatives. These include a recently completed GEF-sponsored programme in Zimbabwe and private-sector driven activities in Kenya, where PV solar home sales were well over 8,000 in 1997 and the PV market has grown 25% annually for the past six years (Hankins, 1998). A recent estimate places the potential market for solar PV systems in SSA at 400-1500 MWp, over one hundred times current levels (Karekezi and Otiti, 1995).

Experience with small-scale, off-grid wind turbines and biomass-based generators (such as gasifiers) has been limited to a few pilot-scale activities, but these technologies may offer greater economic potential than PV for larger and more power-intensive applications than home systems.

"Approximately 100,000 small-scale solar PV systems have been installed in Kenya, South Africa, and Zimbabwe alone - the result of a variety of private sector and government-led initiatives."

Ethanol production from local biomass to reduce oil imports was developed in the Kenya, Malawi, and Zimbabwe sugarcane industries in the 1970s. Today, Malawi still blends ethanol in petrol at rates of up to 20%, but persistent low oil prices and periodic droughts have weakened the region’s ethanol industries. Mali, Zimbabwe, and other countries are currently exploring the use of multi-purpose, lower-input biomass feedstocks such as jatropha for the production of diesel substitutes.

Several other, smaller scale, non-electric renewable energy options are available in many African countries. The dissemination of biogas digesters for cooking and heating fuel has been fairly widespread in Burundi, Kenya, Tanzania, and Uganda (Karekezi and Otiti, 1995). These activities have been most successful with large farmers, farm cooperatives, and rural institutions such as schools and hospitals, where the host is likely to have access to a dedicated feedstock supply, in-house maintenance capability, and state financial resources. Viable solar water heating industries have developed small commercial niches in a number of countries, including Botswana, Kenya, and Zimbabwe (Karekezi and Otiti, 1995). Locally manufactured mechanical windpumps have been widespread for over half a century in many Southern and East African countries, where they are used primarily by large commercial farmers.

Efforts to improve the efficiency of modern energy use have generally received far less funding and attention in SSA than in other developing regions. The few development assistance- and government-supported activities have included demand-side management (DSM) studies, some information campaigns, and a handful of capacity-building and implementation activities. The most significant of the latter, including the long-standing SADC Energy Management Programme, have tended to target low-cost and housekeeping industrial measures through audit and training programmes for industry managers and technicians. This is perhaps not surprising, given the relatively small and dispersed markets for promoting investment in new, higher efficiency equipment. Some examples of national efforts to implement efficiency standards do exist. Energy standards for commercial buildings have been adopted in The Ivory Coast. In South Africa, where about 70% of the region’s modern fuels are consumed, studies have established the benefits of policies and programmes for appliance labelling and standards and for improving the thermal efficiency of new housing projects. Such efforts have yet to be implemented on a large scale. The relative absence of systematic policies that support investment in energy-efficient infrastructure commits the region to a more costly and less sustainable development path than is necessary.