The conventional mix of renewable energy technologies being adopted in Sub-Saharan Africa is limited in energy sufficiency and affordability due to the additional cost of energy storage. Large-scale low-carbon sources, writes Oluleke O. Babayomi, are a lower-cost option for economic growth without compromising environmental sustainability.
According to the International Energy Agency (IEA), the three important guiding principles for the clean energy transition are: energy security, affordability, and sustainable economic growth.
Sub-Saharan Africa’s (SSA) energy security is hampered by insufficiency and unaffordability. The existing electrical grid capacity is unable to meet current commercial demand and the high user-end-cost of renewable mini-grids threatens the competitive production of goods and services in the region.
Forcing a clean energy transition on SSA without ensuring the availability of sufficient energy for sustainable economic growth at an affordable price will likely result in a non-sustainable cycle that perpetuates foreign aid interventions reducing the region’s resilience in the face of climate change.
The trend in clean energy is towards decentralisation. The idea is to generate energy as close as possible to the end users. This has the advantages of lower power losses resulting from long-distance transmission and lower capital cost compared to large-scale centralised generators and mass infrastructure. However, since they lack economies of scale because of a lack of demand, decentralised systems in SSA generate higher electricity prices for users than the main power grid. This is a significant concern since growing economies need affordable energy to support the competitive production of goods and services. Economic growth is positively correlated with both affordable energy prices and high energy consumption for productivity.
Most clean transition policies in SSA rely on intermittent renewable sources such as wind and solar. A key shortcoming of these sources is the need for separate energy storage infrastructure to fill the gaps when the wind is not blowing, and the sun is not shining. Usable solar radiation is only available for about eight hours a day. As a result, energy storage to provide electricity for the other 16 hours can account for a 60 per cent (or more) increase in the capital cost of standalone solar installations in SSA.
As a result, grid-scale energy production, though it is more capital-intensive upfront, has a greater potential to produce cheaper energy for end-users. And the uncompetitive price of energy storage makes relying on intermittent energy sources unsustainable for energy-intensive economic activities.
Dispatchable low-carbon power sources such as hydro, geothermal, and nuclear can meet demand as required, at any time of the day. SSA has abundant hydro and geothermal potential. East Africa’s Rift Valley has about 15 gigawatts of untapped geothermal energy which is two times East Africa’s peak generation capacity in 2022. More than 90 per cent of Africa’s hydropower remains unexploited. If these industries are developed, they can provide ample energy to meet the increasing demand of the fast-growing economies and provide green specialised jobs for the region’s young population.
The maturity of these technologies is also important. Mature technologies require less frequent upgrades and upskilling of workers to operate them. Hydropower and geothermal energy have been in use in SSA for decades. The region has developed a strong skilled workforce over this time. The long-term experience of these local skilled workers has empowered them to locally innovate solutions to challenges that have arisen from deploying the technology in the region.
In contrast, solar and wind technologies are relatively new industries and are still in the phases of rapid development. The cost of solar systems has fallen by 50 per cent in the past decade owing to improved conversion efficiency and lower hardware cost. This rate of development renders recently purchased equipment obsolete within a short time. Countries that do not innovate and produce these technologies are burdened with high capital cost of frequent upgrades and rely on the producer economies for skilled personnel for the operation and maintenance of equipment.
Including dispatchable low-carbon energy in energy models can result in prices falling 50 per cent—with identical levels of reduction in carbon emissions as using only solar and wind energy. Dispatchable sources are not prone to seasonal variations and so also increase the reliability of the energy system. Hydro, geothermal, and bioenergy are also less prone to geopolitical volatility than renewable sources that require a significant amount of imported sophisticated semiconductor electronics, like solar and wind energy.
Like all sources of energy, these dispatchable sources have their shortcomings too. Hydropower is sensitive to climate change and droughts, geothermal energy requires significant financial investments, and nuclear energy has challenges with waste disposal. Also, renewable sources are not evenly distributed across the countries in SSA. Despite their limitations, low-carbon energy sources offer a win-win approach for SSA’s economic growth under the clean transition—a lower-cost solution to tackle the perennial challenge of energy insufficiency.
This blog is based on the recent publication “Affordable clean energy transition in developing countries: Pathways and technologies”.