Simposio Internazionale Economia Solidale e Sviluppo ... · Pontificia Accademia delle Scienze Città del Vaticano 29 Novembre 2013 Simposio Internazionale Economia Solidale e Sviluppo

Pontificia Accademia delle Scienze Città del Vaticano 29 Novembre 2013

Simposio Internazionale

Economia Solidale eSviluppo Sostenibile

per l’ Africa

Renewable Energy and Poverty Reduction in Africa

Belay Begashaw (PHD)

Director, Columbia Global Centers for Africa and MDG Center for East and Southern Africa

Presentation Outline

1. Overview of Energy and Development

2. Potential for Renewable Energy in Africa: prospect for green energy

3. Why Africa lags behind in Energy Development

4. MVP Case Study: SharedSolar System

5. Way forward for Energy Development in Africa

Overview of Energy and Development Globally there is direct correlation between per capita energy consumption (kg of oil equivalent) and per capita GDP (PPP), i.e. DCs have high energy consumption compared with LDCs.

According to World Bank (2012), the following the energy situation in LDCs:

Over 1.2 billion people - 20% of the world's population - are still without access to electricity worldwide, almost all of whom live in developing countries. This includes about 550 million in Africa, and over 400 million in India.

The number of people without access to energy in sub-Saharan Africa is projected to rise to 90 to 100 million in 2030. Without access to energy service, the poor will be deprived of the most basic of human rights and of economic opportunities to improve their standard of living.

About 2.8 billion people use solid fuels—wood, charcoal, coal and dung—for cooking and heating. Every year fumes and smoke from open cooking fires kill approximately 1.5 million people mostly women and children, from emphysema and other respiratory diseases.

GDP (PPP) per capita (World Bank (2011)

World Energy Consumption (kg of oil equivalent)

Energy gap and development indicators: High correlation!

Source: International Energy Agency (2003)

Energy Gap: Percentage of people without access to electricity

Renewable energy (green energy) has the potential to fill the gap and contribute to growth and socio-economic development in Africa

Share of population without electricity access in rural and urban areas (WHO/UNDP, 2009)

Source: WHO/UNDP (2009)

Renewable Energy Options Among the renewable energy options that are currently in wide use in some regions and are now ready for large scale introduction in many areas of the developing world:

Biogas for decentralized cooking and electricity Small Hydro Power for local electricity Small Wind Power for water pumping and local electricity Solar Energy for local electricity (e.g. shared solar systems) Solar Collectors for water and space heating Ethanol and Biodiesel for agriculture and transportation Large Hydro Power for grid electricity Large Wind Power for grid electricity Geothermal Energy for heat and grid electricity

Source: Renewable Energy Network @ http://www.worldwatch.org/system/files/ren21-1.pdf

Potential for Renewable Energy in Africa

Hydro-power potential i.e. 13% of the world, but only 4.3% of feasible potential of 1,750,000 GWh/year is exploited

Solar energy – the continent has abundant solar irradiation 5-7KWh/m2 all year round

High wind power potential, but only 1% exploited

Geothermal potential of 9,000 MW in the Rift Valley – East Africa (only <2% exploited)

Biomass account for 30-80% of energy use

Source: UNECA (2006) @ http://sustainabledevelopment.un.org/content/documents/ecaRIM_bp.pdf

Challenges for Renewable Energy Development in Africa

High investment cost, e.g., the high solar energy potential is limited by the expensive components leading to high unit cost per KWh of USD 0.20 - 0.25 (20 - 25 cents)*, compared with alternatives:

• USD 0.04 - 0.06 (4 - 6 cents)* for coal-fired electricity,

• USD 0.05 - 0.07 (5 -7 cents) for power produced by burning natural gas, and

• USD 0.06 - 0.09 (6 - 9 cents)* for biomass power plants.

Technology – low energy production efficiency (e.g. 25-35% for solar)*

Enabling environment – policy and institutional framework that promote private investment, long-term economic development, micro-enterprise, innovations, and people-centred (local needs and capacity)

* source: http://rael.berkeley.edu/sites/default/files/old-site-files/2006/Kammen-SciAm-Renewables-9-06.pdf

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2007 2008 2009 2010 2011 2012

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World Bank Financing by Energy Type (World Bank (2013)

Renewable Energy

New Thermal Generation

Other Energy

Transmission & Distribution

Upstream Oil, Gas, Coal

Renewable energy is attracting more investment due to its environmental sustainability with World Bank funding increasing from 22% (2007) to 44% (2012)

Investments Trend in Renewable Energy

MVP Case Study

Shared Solar System for Rural Electrification

Pay-As-You-Go Electricity for rural settings

MVP SharedSolar System Currently 16 systems in Uganda and Mali operating since 2011 serving over 300 HHs

100m or 300 ft

Before Installation of Shared Solar System

100m or 300 ft

After Installation of Shared Solar System

100m or 300 ft Convertibility to National Grid – same installation will be used

SharedSolar System is a mini-grid serving 20 HHs/business units

ShareSolar System is a Turn key Three-in-One Unit that combines power generation (solar panels), transmission and distribution

Community participation during Installation

Pre-paid payment system through Mobile phones

3.06 USD/kWh Day 3.83 USD/ kWh Night

1.15 USD/kWh Day 3.06 USD/kWh Night

Cost variations (Day and Night) and reduction due to repayment of investment cost

3.06 USD/kWh Day 3.83 USD/ kWh Night

1.15 USD/kWh Day 3.06 USD/kWh Night

1.15 USD/kWh Day 1.92USD/kWh Night

Cost variations and reduction due to repayment of investment cost

Impacts of SharedSolar Systems

• Business Development –Electricity spurs economic growth

• Lighting – reading and business

• Communication – charging of mobile phones

• Increased Energy Demand –Incentive for grid to arrive

Improved education standard Students able to study and do homework after school

Business diversification and extend time New women business enterprise and tailoring at night

WHY Shared Solar System? • Scalable rural solution for off-grid settlements –

can connect to future grid

• Divisibility – can start small

• Pay-as-you-go system – pre-paid mode of payment

• Removes barrier of upfront cost to customer

• Reduce overhead costs by centralizing power source

• Incremental demand growth – evidence-based adoption rate

• Energy audit – computerized metering system

Way Forward: Key Messages Affordable energy services are among the

essential ingredients of economic development, including eradication of extreme poverty.

Africa (especially SSA) lag far behind in expanding access to modern energy services to accelerate achievement of the MDGs.

More 1.2 billion additional people will need access to electricity and 1.9 billion people will need access to modern fuels by 2015 if the goal of halving the proportion of people living in poverty (MDG 1) is to be met (WHO/UNDP, 2009).

Way Forward: Key Messages

Out of 140 developing countries, 68 countries have established targets for access to electricity, but only 17 countries for access to modern fuels and 5 countries for access to mechanical power.

In SSA, electricity access would rise from 27% at present to 64% in 2015 if MDG-related electricity targets are to be met (WHO/UNDP, 2009).

There is notable failure to act in provision of energy services, especially in terms of a set of options (renewable energy) for establishing carbon trading – reduction in greenhouse gases emission (causing global warming).

Access to energy must be environmentally and socially sustainable – hence prospect for renewable energy and increasing adoption and investments – especially solar and wind power.