Jumpstarting Africa's Economy with Clean Energy

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Sustainable Energy

Jumpstarting Africa's Economy with Clean Energy

Jenny Bussey Vaughan for Mercy Corps

In their quest to bring affordable energy to all Africans, global leaders are upending traditional methods of energy production and infusing Africa’s economy with a jolt of electricity.

The United Nations and African Union recently launched a $5 billion initiative to expand renewable energy capacity in Africa and achieve universal energy access by 2030.

The Africa Renewable Energy Initiative will mobilize an initial $5 billion, with the goal of developing at least 10 gigawatts of new renewable energy production by 2020 and at least 300 gigawatts by 2030.

The initiative will channel billions of dollars into off-grid energy generators and green mini grids – sets of solar panels that can deliver electricity to small villages and underserved urban neighborhoods.

Mini- and off-grid systems can be deployed much faster than centralized grids and at a fraction of the cost, bringing a reliable and affordable stream of electricity to even the most remote villages. To achieve universal energy access by 2030, investors must divert nearly 60 percent of new energy financing to off-grid and mini-grid energy infrastructure, according to estimates by The International Energy Agency.

Unlike large, centralized power plants, off-grid and mini-grid energy production can adapt to the changing energy needs of its customers, who have the option to purchase new energy generating modules as their businesses grow and their wallets fatten.

Universal access to energy has long hampered economic growth in sub-Saharan Africa, where 634 million of the region’s 974 million people lack access to electricity.

By relying on bottom-up solutions and medium-sized enterprises, the energy initiative can bypass corrupt officials and eliminate costly – and in Africa, often ineffective – investments in large-scale power plants.

Nigeria, Africa’s largest economy and most populous nation, invested more than $20 billion since 1999 to overhaul its power sector but has little to show for it. Its power generating capacity has remained stagnant, producing six gigawatts of energy for a population of 170 million – a meager amount when compared with the United States’ power generating capacity of 1,000 gigawatts for 320 million people. Some 90 million Nigerians rely on wood, charcoal, or straw for their energy needs.

Even many connected to the grid cannot depend on a reliable supply of electricity. Frequent blackouts from aging energy infrastructure – and the constant specter of fuel shortages – disrupt daily life, significantly reduce economic productivity, and generate wasteful spending on backup generators.

Africa’s current energy system also threatens public health by producing significant indoor and outdoor air pollution. Up to 94 percent of Nigeria’s population is exposed to unsafe levels of air pollution, according to the World Health Organization. Pollution from indoor fuel stoves and diesel generators contributed to up to 600,000 deaths in Africa in 2012, according to a recent article in Quartz.

A decentralized, renewable energy system could reduce these dangers, but the energy initiative faces a number of obstacles - foremost among them, regulatory issues. Archaic regulations in many African countries have created energy-production monopolies and could impede private investment in off-grid and mini-grid energy production. To address this issue, President Barack Obama’s $7 billion Power Africa Initiative requires that countries increase privatization as a condition for financing.

If all the pieces come together in time, Africa could achieve universal energy access, mitigate global climate change, and experience rapid and equitable economic growth.

“Countries like Ethiopia, Kenya, Rwanda and South Africa are emerging as front-runners in the global transition to low carbon energy,” said Kofi Annan, former Secretary-General of the United Nations and chairman of the Africa Progress Panel. “Africa is well positioned to expand the power generation needed to drive growth, deliver energy for all and play a leadership role in the crucial climate change negotiations.”

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