The United Nations Environment Programme (UNEP) recently released a report from its headquarters in the Kenyan capital of Nairobi, saying that the government through the implementation of a wise policy will open energy markets to private investors. This is the key to stimulate Africa's huge renewable energy potential.
The report, "investing in renewable energy in developing countries: in sub-Saharan private investment in power and resistance," the report gives an overview of the resistance encountered in Africa to promote the implementation of sustainable energy solutions, such as power generation costs, higher grid access difficulties, and put forward recommendations on how to overcome these difficulties.
According to 2011 statistics from the U.S. Energy Information Administration, the 48 sub-Saharan African countries (excluding South Africa, the same below) have total generating capacity of 30,000 megawatts, equivalent to the country's power generation capacity in Argentina. This is for a number of reasons, especially because of power plant aging and lack of maintenance, 30,000 MW of generating capacity because about a quarter of these plants do not work. Therefore, the power penetration of the countries in Sub-Saharan Africa is only 24%, the lowest in the world. In rural areas the situation is worse, the power penetration is only 8%. In this region more than 85 percent of the population is also largely dependent on the tree branches, hay and other biomass sources.
The report pointed out that to meet the growing demand for electricity to support economic development in Sub-Saharan Africa each year requires 7000 megawatts of new generating capacity. To this end, they have the annual need to mobilize capital investment of $ 410 million, equivalent to the countries GDP (gross domestic product) plus an additional6.4%. Because of limited funds these countries' fields of energy are mainly used for maintenance and operation of the existing electricity infrastructure and thus support for long-term projects to solve the shortfall of electricity supply do not have good chances to succeed. There is no doubt that investment in electricity currently has a huge funding gap, to solve this problem, mobilizing private capital and investment are key. Due to investment in large infrastructure projects in the region, traditionally the government and private capital investment in the field of energy in the region has become increasingly active.
The report says, unless they make a stronger commitment to take effective policy measures to reverse these trends, otherwise by 2030, half of the residents still living in sub-Saharan will be without electricity. The reliance on traditional fuels for domestic life energy inproportion to the population of the world shows the world's highest level. This will seriously hamper the realization of their Millennium Development Goals.
The report pointed out that the African continent has rich, untapped renewable energy, which can provide most of the required electricity. Places such as Cape Verde, Kenya, Madagascar, Sudan, Chad and other countries have a particularly impressive potential. According to a study by the African Development Bank, the wind energy potential of Mauritania is almost four times the annual energy required, while Sudan's wind energy potential to meet 90% of its annual energy needed. This provided an opportunity to enhance local energy security and the establishment of regional markets.
If we consider the indirect negative impacts of fossil fuel, renewable energy is much more competitive. Some African countries, including Kenya, Senegal, have the need to spend more than half of export earnings to import energy. If these countries can be scaled up to develop their own domestic renewable energy they can not only improve national energy security, but also reduce public health risks caused by fossil fuel extraction, processing and combustion, including the widespread use of traditional African family stoves which cause the inhalation of smoke, indoor smoke emissions per year cause 1.9 million deaths worldwide; stoves produce "black carbon" which is also an important factor in causing climate change.
The report notes that developing countries can cross the traditional energy model, making a direct transition to clean energy, which can effectively promote economic and social development. United Nations Secretary General and UNEP Executive Director Achim Steiner said: "The African continent has a wealth of renewable energy, if public policy is implemented, then the people of Africa will have new development of the future, millions of people's way of life and quality of life will be improved. "
UNEP's report shows that in sub-Saharan the barriers to investment in renewable energy are mainly these three: cost, structure and risk.
The report pointed out that there is a high cost of lower renewable energy generation, policy incentives can play an important role. In Kenya, the Government in 2008 took a tariff policy to promote renewable energy generation across the country. This policy is expected to bring 1,300 megawatts of additional generating capacity which is about two times as much as Kenya's current generating capaity.
In Uganda, the establishment of specialized management systems and institutions for the Clean Development Mechanisms, in order to succeed in promoting the field of renewable energy and investment activities. In 2008, Uganda this has been completed and has a generating capacity of 550 MW, 315 MW in hydroelectric. In 2010, Uganda 300 megawatts of renewable energy projects are applying for the Clean Development Mechanism, including new fields of biomass power generation.
The report pointed out that in the rural areas of Sub-Saharan Africa, only 2% to 5% of households can be connected to the grid. Therefore, as opposed to the expansion of the existing power grid, the use of small wind energy, bio-energy such as solar home systems as access to electricity, and is very cost-saving.
The report argues that the second major obstacle is the structural defects in the energy market in sub-Saharan Africa, for example, corporate monopolies make new inventions in the field of energy difficult to enter the market grid. To this end, the Government should reform the energy sector, to develop a higher level of decentralized management policy so that it is easier to enter; to encourage third party and private independent power producers to enter the field of renewable energy market, encouraging their contribution to the development of required special professional skills.
The third factor that hinders renewable energy development exists in many countries in sub-Saharan Africa. These are risk issues, including political risk, regulatory risk and commercial risk. The report notes that these risks are more complex, but through the use of existing risk mitigation tools, these risks and their impact can be effectively reduced.
