Following the recently concluded World Economic Forum on Africa, in beautiful Kigali, Rwanda, I can’t help but share my thoughts on the ‘Towards a New Energy Future Session’.
Watching the live stream from Nairobi, I had several “AHA!” moments, which left me inspired and optimistic about Africa’s energy future.
In the next 35 years, power demand will grow four-fold in Africa due to an increasing population and rapid urbanization. Africa will need 292 000 MW’s of additional capacity over the next 25 years. To many this may seem to be a massive challenge for Africa, I see an opportunity.
African can take the traditional route and follow what many western and more developed countries have done, or it can leap-frog this journey entirely and develop a smart energy system. The choice is ours to make.
So, how can Africa harness this opportunity?
One of the ways Africa can harness this opportunity is through employing a vibrant energy mix which has a strong foundation of traditional fuels (oil, coal and gas) and is complimented with new renewable energy capacity in both on grid and off grid applications. Jubril Adewale Tinubu, CEO of Oando Energy, iterated that Africa still has 600 years’ worth of gas, 100 years’ worth of oil and over 400 years’ worth of coal. Given the abundant resource we have in Africa and the systems in place currently, fossils may not disappear from our energy mix for many years, however if used smartly and efficiently, we can come up with sustainable long term solutions to meet our growing energy demand especially in nonresidential applications. As one audience member put it very eloquently during the forum, Africa has about “1 billion years” worth of solar so why not use it.
With renewable energy technology improving and achieving grid parity with traditional fuel sources, Africans will have more choice than ever before on which fuel sources to employ. Previously, this choice has been driven by cost factors, however with the playing field being leveled; solar energy will soon be cheaper than oil or coal energy. Africa can then leapfrog the fossil fuel route and opt for a more sustainable energy option.
Access to energy is also a key factor to consider in ensuring a smart energy mix. Given that the grid is under developed especially in rural areas in Africa, we need a more portable and flexible solutions to our energy mix. Mobile phones have demonstrated that Africans can advance traditional technologies (i.e. landline phones) and go straight to new modern technologies (i.e. cellphones & smartphones). Experts predict that this will be the same for energy. Instead of spending billions developing complex grid systems in uncharted rural areas, Africans will adopt renewable energy and bypass the need for a grid. Further, with mobile phone technologies accessible to most, Africans will be able to purchase, meter and monitor their energy sources at their fingertips.
In order to fully transform Africa’s energy mix, capital is needed. Power production is now being seen as a business opportunity and this attracts capital to this sector. If governments and private sector start to work together to fund various sustainable energy projects, we will begin to see a transformation occur in the energy mix. In terms of returns on capital, various benefits can be found such as; reduced health risks due to lower Kerosene use, more enterprise in the SME space as they are able to stay open longer into the night, students have more access to technology i.e. computers and the internet.
In Kenya, programs like Mkopa are paving the way in the smart energy space, creating access to renewable energy which is affordable. Mkopa sells home solar systems in Kenya, Tanzania, and Uganda. Customers pay a deposit of 3,500 KES (approx $35), take the system home then pay 50 KES (approx $0.50) a day for a period of one year, to own the solar system. Daily payments are made through M-PESA, a mobile phone based money system. Mkopa is definitely leading the way in smart energy.
Jasandra Nyker, CEO of BioTherm Energy, stated that it is important to manage expectations in African communities and ensure that these communities understand this new energy revolution works. I fully agree with this sentiment. It is imperative that the African consumer see this as a benefit and support this transformation in the energy mix in order for the solutions to be successful in the long-term.
Finally, the discussions on the WEF on a New Energy Future were robust and definitely inspiring. I look forward to seeing Africa overtake conventional energy sources for a smart energy mix across the board.