Energy
Market for renewable energy expected to boom in Africa

afrol.com, 9 February  -  At a time when energy questions figure prominently on many national agendas, renewable energy markets are set to take off. So concludes a new report on renewable energy, which also pinpoints a growing market for renewable energy in the developing world, especially Africa. African countries "are ideally suited to renewable energy applications," says Mohamed T. El-Ashry, Chairman of the Global Environment Facility (GEF).

On a worldwide scale, two billion people - a third of the population - live without the benefit of electricity or other modern energies. Additionally, nearly half a billion people have limited or unreliable access. Rural Africa is the zone less electrified in the world.

Electrification by conventional means has been both expensive and slow. "As far as [conventional] energy development is concerned then, many rural zones seem doomed," says Youba Sokona of the Dakar-based ENDA Energy Programme. Rural Africa "is characterised by a heavy dependency on biomass, little use of 'modern' energy forms and low energy consumption," he continues. 

- Because of this heavy dependency on biomass, rural populations are obliged to chunk at their forest resources and agricultural residue. In some zones, this is at the cost of soil fertility, says Youba Sokona. An external energy supply is needed, and the most credible alternative for rural Africa is found in the local, decentralised development of renewable energy. 

According to the report "Renewable Energy: GEF Partners with Business for a Better World" developing nations will need as much as 5 million megawatts of new electrical generating capacity in the next 40 years and there are abundant local sources of renewable energy (solar, wind, hydro, geothermal, and biomass). The also will reduce dependence on more distant and polluting sources. "The opportunities for countries and for business are enormous," says El-Ashry. 

Several African countries already have started on the development of renewable energy, promising both less dependence on external supply and rural electrification. One recent example is the Comoros, which is low on foreign exchange and faces difficulties each time oil prices are high. The alternative is locally abundant solar energy.

The government of the Comoros fostered the local market for solar equipment with assistance from the UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP). The program helped the government identify an international consortium of companies, which was granted a three-year grace period for taxes and duties, during which it could freely import equipment and had the right to export earnings free of taxes. 

The Comoros government pledged that it would grant the firm contracts for all public projects dealing with solar energy during the period. It also initiated a public awareness campaign to promote solar energy use in off-grid regions. The consortium credits ESMAP with its decision to enter the Comoros market. A similar project is under way in Swaziland. 

In Sahelian Burkina Faso, solar energy has been singled out as the only real alternative to costly conventional energies for rural societies. Solar home systems with individual photovoltaic cells are seen as flexible, technically reliable, long lasting, and environmentally friendly. 

In 1988 the Spanish solar energy company Atersa launched a project to electrify 125 rural villages in Burkina Faso. Financed by the Spanish Development Fund, the project installed solar systems for lighting for streets and lighting, refrigeration, televisions, and/or radios in schools, health dispensaries, and social centres. Atersa adapted its approach to climatic, social, cultural, and educational conditions in the villages. Its engineers used similar components in all systems to ease installation and replacement. Systems were selected for easy maintenance, for example, gel batteries requiring no water refills.

Morocco has invested more in wind energy. A 50-megawatt wind farm in Koudia el Baida, Morocco, is one of a few wind projects in developing countries to be constructed on largely commercial terms. A consortium of three firms, including Électricité de France (EDF), is constructing and operating the farm, financed through a number of commercial and development banks. Ownership of the wind farm will be ceded to the Moroccan national electricity utility, Office National de l'Électricité (ONE), at the start of operations.

In Mauritania and Senegal wind energy has been developed on a small scale, adapted to local, rural conditions. The non-governmental organisation Alizes started constructing wind pumps in Mauritania, and is now supplying water of high purity to more than 10 000 people in the two countries. Manufacturing has turned local, by a firm from Saint Louis, northern Senegal.

Other ongoing renewable energy projects in Africa include private solar home systems in Zimbabwe, bagasse power development in Mauritius and solar hot water heating manufacturing and installing in Tunisia. Most African countries, however, have introduced renewable energies at a smaller or larger scale. The most successful projects are usually combined with microfinancing to increase affordability and expand local markets. Local interest in general is reported as high.

In addition to the great social potential renewable energies have in Africa and the developing world at large, the investment in these energies is seen as the only long-term reliable energy source. The GEF report therefore also cites the International Energy Agency prediction that supplies of fossil fuels will begin to decline as population growth and economic development increase energy demands. 

Its release follows by just two weeks the announcement in Beijing by the Intergovernmental Panel on Climate Change that there is new and stronger evidence that greenhouse gases, primarily from the burning of fossil fuels, are changing the global climate, and that most of the warming observed over the last 50 years is attributable to human activities.

In its first decade, GEF approved US$ 580 million in grants for 51 renewable energy projects in 30 developing and transition countries. With co-financing and other resources from governments, bilateral and multilateral development agencies, and the private sector, total project costs have exceeded US$ 3 billion. GEF investments help to remove barriers and reduce long-term technology costs, sharing some of the risks of expanding renewable energy markets. 

Source: Based on GEF, ENDA and afrol archives

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