Environmental organisation Greenpeace is demanding newly-elected President Cyril Ramaphosa takes urgent action on energy policy in South Africa.
Ramaphosa delivered his maiden State of the Nation Address (SONA) on Friday, highlighting economic growth and combating corruption.
“While President Ramaphosa made a compelling attempt to start a new chapter in [Friday’s] SONA address, by failing to declare that nuclear will not go ahead, or provide direction on the country’s energy pathway through the finalisation of the Integrated Resource Plan, he has created more uncertainty in energy policy,” said Mbong Akiy, Greenpeace Africa head of communication.
Ramaphosa sketched broad outlines for moving the economy forward through a focus on industries, such as mining and infrastructure.
“Mining is another area that has massive unrealised potential for growth and job creation,” said Ramaphosa, referring to the industry as a “sunrise industry”.
“If the president is serious about job creation, he would ensure that the barriers to renewable energy are removed immediately, instead of declaring that the mining industry – which is in terminal decline – is a ‘sunrise industry’,” said Akiy.
The Democratic Alliance indicated its opposition to a new nuclear power station.
“Be strong, President Ramaphosa. Reject the nuclear deal and put your weight behind the neglected renewables project so we can move forward into an era of clean, affordable energy,” DA leader Mmusi Maimane said as members of Parliament debated the SONA.
Greenpeace argued that energy generator Eskom needed to focus on renewable energy as part of a shift to climate-friendly policies.
“The electricity sector is indeed in dire need of certainty and accountability. South Africans deserve clarity on what will be done to ensure that rational, climate-friendly and low-cost energy decisions are taken. It is only the Integrated Resource Plan that can provide that much-needed certainty,” said Akiy.
In his SONA, Ramaphosa hinted that strong action was coming to restore the credibility of Eskom.
“The recent action we have taken at Eskom to strengthen governance, root out corruption and restore its financial position is just the beginning.
“Government will take further measures to ensure that all state-owned companies fulfil their economic and developmental mandates.”
Eskom largely relies on coal for energy generation, with 13 coal-fired plants producing 34 952 megawatts (MW). The nuclear-powered Koeberg plant produces 1 830MW.
Two hydro pump storage schemes and two hydro-electric plants have a combined capacity of 2 000MW.
The company has invested in two wind farms and said that the Klipheuwel system had a capacity of 3MW, while the Sere Windfarm in Vredendal in the Western Cape had a capacity of 100MW.
Akiy demanded that the government develop and implement a plan to ensure greater focus on renewable energy.
“Greenpeace calls for consistency and for the president to ensure that a new Integrated Resource Plan – which takes climate change and the country’s strained water resources into account – is released as soon as possible.”
In a move sure to be celebrated by opponents of fossil fuel-based energy, the World Bank has just made a huge announcement at the One Planet summit called by French President Emmanuel Macron. The bank, which provides loans to developing countries to foster economic growth, announced on December 12 that it will no longer offer financial support for oil and gas exploration after 2019.
During the summit, the bank released a statement saying it “will no longer finance upstream oil and gas,” citing a need to change in a “rapidly changing world.” In 2015, the bank previously vowed to have 28% of its portfolio dedicated to climate action by 2020. The bank’s latest statement on fossil fuel financing suggests that it is on course to achieve that goal.
This is yet another blow to the fossil fuel energy industry, and a seemingly significant win for environmental advocates. The economics surrounding the energy sector are increasingly making it more attractive for entities to switch to renewable energy. Across the world, it has become cheaper to build new renewable energy installations than to operate and maintain existing coal power plants.
The World Bank’s plan does lay out a caveat for “exceptional circumstances,” saying that they will consider “…financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”
The Paris agreement is a major factor in the decision. The One Earth summit was planned on the two-year anniversary of the historic agreement, which was looking uncertain after the President of the United States, one of the major financial and influential member nations, decided to withdraw. Even so, the agreement looks to be thriving, even in the US, which may reach the goals laid out in Paris against all odds.
South Africa College High School (SACS) in Cape Town has made a commitment to clean energy by installing a solar system at its Rosedale Boarding House. The solar system was installed by Energy Partners Home Solutions, part of the PSG group of companies.
Barry van Selm, Deputy Headmaster at SACS explains that installing a solar system at the school was an easy choice. “SACS has become very aware of its carbon footprint, so a renewable energy option was important to us. In the past five years we have also seen huge increases in electricity tariffs so we needed to find a sustainable way of bringing those costs down.”
According to Cala van der Westhuizen, Head of Marketing and Sales at Energy Partners Home Solutions, schools like SACS, with boarding houses and plenty of activity over weekends and holidays, are the perfect place to install solar systems as these types of properties consume most of their energy during the day’s peak solar hours, and can therefore maximise the financial benefits of a renewable energy solution.
He says that the Energy Partners team achieved some interesting results while still working within the parameters that were set by SACS as well as regulatory requirements.
Van der Westhuizen explains that the Energy Partners’ team started off with an in-depth analysis into the requirements of the boarding house. “This involved taking the generation capacity that regulations would permit the team to install, into consideration.”
“According to our findings, we could install a 25 kilowatt inverter at the boarding house, which is the maximum size allowed under NRS regulations for the specific infrastructure of the site. With the actual solar array we had a bit more leeway, so we installed 30.88kWp of multicrystalline solar panels.”
This enables the system to produce at the converter’s maximum level for as long as possible during peak hours and also produce excess power that the school will be able to possibly sell back to the City of Cape Town, says van der Westhuizen.
Van Selm says that as part of the system, the school received a tracking tool that allows them to monitor the system in real time. “Being able to track the system’s energy production is very interesting and allows us to see the results. Our first electrical bill has not arrived yet, but based on what we have seen from the monitoring tool, our use of electricity from the grid has been cut by about one third which amounts to a saving of around R75 000 at the current electricity tariffs.”
“We are very excited about the results we have seen so far and looking forward to reducing our carbon footprint and electricity bills even further in the near future,” Van Selm concludes.
About Energy Partners Home Solutions
Energy Partners Home Solutions (EPHS) offer clients holistic and innovative home energy solution guaranteed to realise significant savings on a household’s energy bills. In 2016, the organisation launched its ground breaking new product, the ICON Home Energy Hub. The first solar inverter and battery combination developed specifically for the South African residential market.
The ICON forms part of a full home energy solution, including Solar PV, Batteries, Heat Pumps and LED lights. By combining these technologies, Energy Partners (EPHS) is able to provide significantly better savings and financial returns than other solutions: a family sized home could save up to 70% of their electricity bill and earn more than 16% return on their investment – twice what a standard PV-only solution would provide. For more information visit: www.poweryourself.co.za
The Nordic countries Denmark, Finland, Norway and Sweden hosted the Nordic Energy Days conference from September 13 through 14 at The Innovation Hub in Pretoria. The countries have over the last 10 years collaborated amongst themselves to develop an innovative energy mix focused on effective system integration, grid stability and sustainable energy solutions.
The Nordic countries outlined their experience and the function of their energy mix, with Finland’s Deputy Minister of Economic Affairs and Employment Petri Peltonen stating:
“We have very advanced electricity and energy systems and our grids have been connected for decades. The Nord Pool has now been in operation since the 1990s and it is the world’s largest exchange for electricity …. We are trying to increase the share and production of renewable energy from various sources, Finland being focused on bio-based sources and our colleagues in hydro, wind and others …. The South African government objectives are also ambitious regarding renewable energy in particular and I think our mission is really to first of all open up our experiences, lessons learned, the positive and at the same time also connect the best of our resources, companies, agencies, research organisations with our South African counterparts during the Nordic Energy Days.”
Ambassador of Sweden to South Africa Cecilia Julin added:
“The Nordic cooperation is really strong and I think that’s what we want to share with South Africa as well … because we get inspired by SADC to show possibilities to work in the Southern African Power Pool. We can share experiences from Nord Pool and how we can work together.”
Day one of the conference was focused on opportunities for the Southern African Power Pool (SAPP) teaming up with the Nordic countries. Norwegian Deputy Minister Ingvil Smines Tybring-Gjedde stated that embracing the diversification of energy sources will minimise the effects of global warming, whilst significantly enhancing the share of energy between countries within the SADC region as it has done for the Nordic countries.
The Nordic countries have shown a particular interest in working with the region by assisting in the facilitation of cross-border cooperation. The countries also indicated a desired involvement in ensuring energy security in Europe by developing a prolonged relationship with the African continent.
Special energy adviser to the South African presidency Silas Zimu said on this point:
“Let us learn from what the Nordic countries have done …. Public companies need to put measures into place.”
The second day of the conference highlighted the technical side of the energy sector focused on clean technology and grid technology. In a session on clean technology, DNV GL Africa’s business manager Robert O’Keefe talked on the decarbonisation of the energy system within the next 30 years due to increased efficiency in energy generation leading to a significant decrease in the overall demand of energy. He went on to state that the global use of fossil fuels to generate energy would decrease from 81% to 50% by 2050, which can be troubling for Southern Africa as a region profoundly endowed with coal as a source for power generation.
To effectively support the integration of clean energy into the SAPP it is vital for the region to develop a stable grid. Stig Uffe-Pederson, Deputy Director General of the Danish Energy Agency, highlighted the importance of these technologies, mentioning:
“This is also a story about making a green transition. This is about investing and setting long-term political projections and a stable framework that allows this transition. In that way, you are actually able to sustain economic growth while you reduce your energy emissions and while you also reduce your energy consumption.”
According to a new survey, international investors say Africa’s renewable energy industry is the most promising on the continent.
The survey which was conducted by a French research agency Havas Horizons, indicates that investors believe in the ability of Africa to become a world reference for renewable energy.
It further states that projects in this particular sector, which was long considered risky, now represent a high potential in realizing higher returns on investment .
Solar energy was highlighted as the most promising energy solution by the year 2020 and Africa is now entering a global trend of development of renewable energy at the expense of fossil fuels.
The fall in global commodity prices has not decreased investor confidence in the continent, the research says. Adding that investors are willing to keep and even increase their investments in Africa, with Ethiopia, Nigeria, Morocco, Ghana and Senegal, showing immense potential.
However, investors cited issues surrounding legal procedures and governance as some of the main setbacks.
Havas Horizons polled 55 banking and financial institutions between January 14 and February 29.
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Speaking about energy matrix in Africa, last week, Head of Power at Standard Bank, Rentia van Tonder said “Africa is uniquely placed to build a sustainable, renewable energy matrix with immense potential.” “However, how quickly, efficiently and at what cost does the continent builds this energy infrastructure will be influenced by sovereign wealth, governments commitment and capital markets,” she pointed out. The World Bank estimates that only 24% of people across sub-Saharan Africa have access to electricity.
Furthermore, limited, inefficient or expensive distribution networks ensure that the bulk of what little power is available is narrowly concentrated in a handful of countries and commercial centres. The rapid evolution of renewable energy generation and distribution technology provides sub-Saharan governments with a range of new sustainable energy alternatives, however base load electricity remains a key driver. “Scalable wind and solar projects are often smaller and more focused, requiring less capital and time to develop,” said Ms van Tonder. “Smaller renewable projects, while often generating less power, can nevertheless support growth in investment if focused on the most productive sectors of an economy through focused investment.” Renewable energy projects also have the advantage of costing less the longer they operate, depending on the specific technology, operation and maintenance agreements. This means that once they are paid off, through user-pay tariff structures that correctly reflect cost; they can be re-focused on supplying cheaper power to non-capital generating elements of the economy. “Creating the institutional infrastructure to attract global capital at affordable rates, and then manage it efficiently, remains important,” said Ms van Tonder.
“The development of local currency pools of liquidity and capital is essential, and in short, if Africa is to achieve power self-sufficiency, we need to move beyond having to rely on the US dollar to fund every major project.” While project finance is often raised in foreign currency, project revenues on the continent are generally denominated in local currency. Where the exchange rate between the currency of revenue and the currency of debt diverge, the cost of debt increases dramatically. This carries the risk of extending repayment periods – or defaulting entirely – with exponential cost implications over the long term.
Given these risks, and costs, the attempts currently being made by legislators across the continent to deepen domestic capital markets should be encouraged and Pan-African multilateral forums would do well to consider how Asia and other emerging regions deepened local capital markets as a critical development enabler.
While developing a diverse matrix of traditional and renewable energy supply on the continent requires long-term institutional development, shorter- term challenges requiring immediate attention when considering energy projects on the continent include: Countering the effect of lower commodity prices and US dollar strength by; lending against ring-fenced security or cash, allowing pre-paid charges to reflect currency depreciation, seeking innovative non-US dollar denominated financing, or selling off operating assets.
Avoiding project cost and time creep by focusing on realistically-sized power projects determined by greatest developmental or earning returns. Countering environmental damage and cost while reducing project delivery time-frames by up-weighting renewables in the energy mix. Africa stands uniquely placed to develop a diverse and sustainable energy mix, in the shortest time.
The strategic use of renewables can also deliver this at the lowest costs and least environmental impact while building energy infrastructure with the longest shelf-life addressing the long term power needs for the continent. “Standard Bank’s deep experience in scoping, planning and raising capital for numerous IPPs and PPPs across the continent has positioned it to identify the key institutional attributes that drive the efficient and successful leverage of the global capital for the development of power infrastructure,” said Ms van Tonder.
The New Urban Agenda must reinforce three key city assets, says ICLEI secretary general Gino Van Begin: Ambitious leaders, skilled staff, and strong community and stakeholder engagement.
This is life in a sustainable city. You weave through other cyclists each morning on a seamless network of cycle tracks that bring you straight to work at a renewable-energy start-up. The air is fresh and light, filtered by native trees and shrubs that line the streets.
Your office is adjacent to a public park that replaced a once-vacant plot of land. It has a popular picnic area that is full of different languages and accents when the weather is dry and a rain garden to absorb excess water from storms. When leaving the office after dark, you can see bright constellations of stars in the sky.
Can you picture this happening in your city? Can you picture it in every city around the world?
For some, the notion of living in a sustainable city can feel vague and distant, a dream of the future. But others are already living in this city or are advancing quickly towards it.
For ICLEI, sustainability is indisputably the necessary path for all city life and operations. Sustainable cities reap the benefits of environmental, social and economic innovation, becoming better equipped to respond to pressing urban challenges, shifting demographic and economic trends, and environmental change. They are designed with people and planet in mind.
Cities, towns and regions across the world join ICLEI to push the boundaries of sustainability and multiply the positive impacts they have on the world. At ICLEI, we envision no less than a world of sustainable cities that go beyond zero waste, are free from fossil fuels, and drive continual innovation in order to protect and enhance life equitably and for all.
A sustainable city goes beyond zero waste to become a productive system, upending the idea that economic growth relies on resource extraction and depletion of finite energy and materials. This city makes the most of existing resources through reuse, sharing, and exchange rather than relying on a continuous path of production and consumption.
In this way, the city restores and enhances natural systems. It also decreases dependence on international resource chains while creating a thriving sharing economy that changes consumption patterns among residents. Imagine a city where organic waste feeds thriving green space and urban gardens and where residents share rather than buy electric cars.
A sustainable city is on the fast track to becoming free from fossil fuels, proving that such dependence is a relic of the past. These cities diversify and modernize mobility and transport, commit to 100 percent renewable energy, and divest from fossil fuels.
Together, these strategies shift the balance of power away from industry. They also open up space for residents and small businesses to decide upon, participate in, and even profit from new energy systems. This is a city where residents sell excess solar power to the grid and can choose to ride biofuel buses or cycle to work.
A sustainable city is also a hub of economic, social and environmental innovation. These innovations, driven by local governments and residents, have the potential to transform nearly every aspect of urban life and city operations.
Innovation in a sustainable city means building a local economy that is brimming with green jobs. That process is supported by skills development and training, encouraging entrepreneurship, and employing smart ways of collecting data and translating it into innovative policy and action.
An innovative city also maps vulnerabilities and risks with data generated by residents. And it provides incubator space for start-up businesses of all kinds.
A sustainable city is on the fast track to becoming free from fossil fuels, proving that such dependence is a relic of the past.
The net effect is that sustainable cities ultimately protect and enhance daily life for all residents.
It is not easy for cities to achieve this vision. It takes myriad small steps to achieve big goals. Yet cities are already making progress and committing to bold action.
The world is past the point of questioning whether sustainable urban development is essential. It is clear that we need sustainable cities, and we are increasingly aware of the figures that support this vision: Cities represent more than two-thirds of the global economy and 70 percent of global greenhouse-gas emissions. Over half the global population lives in cities, a figure that will rise to two-thirds by 2050.
We are quickly approaching the Habitat III conference in Quito, where nations will define the course of urbanization for the coming decades. Now is the time to ensure the New Urban Agenda — the conference’s outcome strategy — equips the world to create truly sustainable cities that meet our ambitious vision.
At ICLEI, we are well aware that cities have unique assets, with the potential to shift the trajectory of global development. The New Urban Agenda must therefore reinforce these assets to globalize the sustainable city and its concomitant benefits, with a particular focus on the following three areas.
Ambitious leaders: Sustainable cities have ambitious leaders who push the envelope of sustainability. They communicate a clear vision for their city and ensure that sustainability becomes the norm in daily life and discourse.
Curitiba, Brazil, stands out with a widely recognized tradition of sustainability and transport innovation brought about by visionary planning by Mayor Jaime Lerner in the 1960s. This legacy has continued under the leadership of Mayor Gustavo Fruet, who is advancing transport innovation as part of his own vision to continuously improve quality of life in the city.
The City of Seoul, South Korea, also is widely recognized as a pioneer in urban sustainability. Mayor Park Won Soon, who is also president of ICLEI, envisions a “new urbanization” that fights climate change, achieves energy self-reliance, and allows people and nature to coexist.
Under his leadership, Seoul is creating a thriving sharing city. It is also avoiding 10 million tonnes of greenhouse-gas emissions by 2020 through its “One Less Nuclear Power Plant” programme. The initiative sought to reduce energy consumption equivalent to one nuclear power plant — a goal that was reached before the project moved into a second phase.
Through the New Urban Agenda, nations must make room for ambitious leaders to be visible and engaged, advocating and shaping policies and mechanisms that enable cities to act on their ambitions.
Skilled staff: Sustainable cities can exist only with skilled government staff members who know precisely how to achieve the ambitions of city leaders. They understand the technical, natural and social systems that underlie everyday life in their cities, and can deliver interventions that will change the course of development.
Deborah Roberts of eThekwini municipality in Durban, South Africa, is one such example. As head of environmental planning and climate protection and Durban’s first chief resilience officer, she has invigorated biodiversity and community-based adaptation as a central part of urban planning. Ultimately, the aim is to bring together people and ecosystems in a way that creates jobs and alleviates poverty.
In 2011, Roberts helped rally more than 100 local governments around urban adaptation by bringing the Durban Adaptation Charter for local governments to the international climate talks that year. Most recently, in 2015, she was elected as co-chair of the Intergovernmental Panel on Climate Change (IPCC) Working Group II on Adaptation, as the first scientist with an urban practice background to take on this global role.
The New Urban Agenda must ensure that cities receive adequate funds to hire skilled staff and build their capacity to shape and carry out ambitious programmes and projects.
Strong community and stakeholder engagement: Civil society holds collective knowledge that is full of potential for outside-the-box thinking based on intimate knowledge of daily life in city neighbourhoods. Residents and community-based organizations are sources of ideas, data and feedback, and if leveraged properly, they can become powerful agents of change.
The City of Reykjavík, Iceland, has opened up unused urban space for residents to experiment with potential sustainable uses that support plans to liven public space, enhance creativity and engage residents in designing their own surroundings. Residents receive grants from the city to experiment temporarily with their space to spark discussions around more-permanent use.
At Habitat III, nations must encourage open processes for engaging members of civil society, and empower cities to respond to the demands, ideas and needs they present.
These are the key assets that differentiate cities and make them stand out from the crowd. When all three of these factors are strong, cities can transform themselves — and consequently the rest of the world. Now is the time to globalize the sustainable city and empower cities to lead this change.
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The 25 young Africans participating in the first and only energy-themed institute offered through the Mandela Washington Fellowship are all committed to providing the energy needed to empower the continent.
Representing 19 countries, their work ranges from placing solar lanterns in humble huts to advising the leadership of South Africa’s national power utility.
Over the next six weeks, they will be at the University of California, Davis, to leverage the campus’s energy expertise and better equip themselves to tackle the enormous energy challenges on their continent.
“They’re super impressive,” says UC Davis professor, Kate Scow, of the department of land, air and water resources and the institute’s academic director. “Bringing these young leaders together in one place is amazing.”
The fellows are between 25-35 years old, and have already promoted innovation and accomplished positive change. They include:
- entrepreneurs promoting renewable energy and energy-efficient technologies;
- other innovators setting up solar kiosks for off-grid villages or providing solar-powered cold storage to smallholder farmers;
- the head of the Djiboutian Energy Management Agency, charged with implementing a law liberalising the electricity sector; and
- the founder of a coalition that advocates for transparency, accountability, local participation and environmental management in Tanzania’s oil and gas industry.
Clean energy activist
Of the two South Africans on the programme, Adele Boadzo is a clean energy activist and solar entrepreneur with over five years’ experience in Africa’s energy sector. She is passionate about delivering clean energy projects to electrify the continent and is currently a project manager at a South African solar PV company.
She is also the founder of Hope Rises Solar, an organisation that empowers women to distribute and install solar technologies to transform their communities.
Major impediment to Africa’s growth
Grant Harris of Davis, who helped launch the Young African Leaders Initiative, the flagship of President Obama’s Young African Leaders Initiative, for the White House, says the lack of access to energy is an enormous impediment to Africa’s growth and economic development. “Without electricity, you cannot study at night, refrigerate a vaccine or dependably run a factory or business.”
“Whether Africa’s young leaders receive the skills and opportunities they need is going to determine the future of the continent.”
Full academic programme
UC Davis is one of 36 universities hosting the summer programmes for about 1,000 fellows selected through a competitive process from among 40,000 applicants. At the Specialised Institute on Energy: Pathways to Zero-Net Energy, fellows will experience a living lab for energy efficiency at the university, ranked third in the world for sustainability by the GreenMetric World University Ranking.
A few of the academic sessions will focus on empowering women to help address energy needs. In one workshop, a gender adviser and policy team member from USAID will discuss how developments in the energy sector affect men, women and children differently.
While there, they will be staying in the university’s West Village – the largest planned zero-net energy project in the United States.
An East African Centre for Renewable Energy and Energy Efficiency, or EACREEE, has been launched at Makerere University in Uganda to address energy issues faced by the five East African Community nations of Burundi, Kenya, Rwanda, Tanzania and Uganda.
It joins the Global Network of Regional Sustainable Energy Centres, coordinated by the United Nations Industrial Development Organization or UNIDO.
“The centres respond to the urgent need for increased regional cooperation and capacities to mitigate existing barriers to renewable energy and energy efficiency investment, markets and industries,” UNIDO says.
EACREEE has been created by the East African Community or EAC states with support from the Austrian Development Agency, UNIDO and the Australian Agency for International Development, as part of global efforts to make Sustainable Energy for All a reality in 2030, as per the United Nations Sustainable Development Goals.
EACREEE’s work will contribute particularly to the cross-cutting areas of the goal on sustainable energy, and the goal on sustainable industrial development. It will work towards limiting average global surface temperature increases.
The centre is based in Makerere University’s college of engineering, design, art and technology, and operates through a network of national focal institutions among all East African states.
EACREEE’s main aim is to develop and implement a regional renewable energy policy framework for the EAC, and facilitate its implementation at national levels to ensure the availability of sufficient, reliable, cost-effective and environmentally friendly energy sources.
This will be achieved through innovative partnerships within the region and beyond that will tackle energy, climate and development challenges simultaneously.
What the centre will do
The centre was inspired by the success of the Economic Community of West African States’ ECOWAS Centre for Renewable Energy and Energy Efficiency, and responds to the different energy challenges East African countries are facing, including energy access, energy security and climate change mitigation.
EACREEE will act as a regional think-tank as well as strengthening ongoing national activities in the areas of policy and capacity development, knowledge management, awareness raising, and investment in and business promotion of renewable energy and energy efficiency.
It will contribute towards improved access to modern, affordable and reliable energy services, energy security and mitigation of negative externalities of energy systems – such as pollution – by creating an enabling environment for renewable energy, and energy efficiency markets and investments.
“The centre will promote all appropriate and sustainable renewable energy and energy efficiency technologies, promote small-scale and medium-scale hydro power projects, and bio-fuel projects and liquid petroleum gas cooking projects,” said Professor Henry Alinaitwe, principal of the college of engineering, design, art and technology at Makerere.
EACREEE will support and execute renewable energy and energy efficiency projects that cover one or more EAC countries, focusing primarily on activities with regional impact or national projects that demonstrate high potential for scaling-up or regional replication.
“Adequate renewable energy is key towards promoting industrialisation and subsequently achieving middle-income status by 2020,” said Jesca Eriyo, EAC deputy secretary general, at the centre’s launch earlier this month.
Philippe Scholtes, managing director at UNIDO, emphasised the importance of inclusive and sustainable industrial development, and the roles of sustainable energy and private-public partnerships. “The global network of regional sustainable energy centres assists development partners in an effective and efficient way,” said Scholtes.
The Global Network of Regional Sustainable Energy Centres platform offers an umbrella for South-South activities, according to UNIDO. There is a common understanding that some ‘soft barriers’ to renewable energy and energy efficiency can be tackled more effectively and at lower cost through regional approaches.
The expanding post-2015 South-South and triangular partnership comprises various centres in Sub-Saharan Africa, North Africa, the Caribbean, the Pacific and other regions, and they enjoy high-level support from energy ministers.
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Africa is uniquely placed to build a sustainable, renewable energy matrix with immense potential, says Rentia van Tonder, head of power at Standard Bank. “However, how quickly, efficiently and at what cost the continent builds this energy infrastructure will be influenced by sovereign wealth, governments’ commitments and capital markets,” she points out.
The World Bank estimates that only 24 percent of people across sub-Saharan Africa have access to electricity. Furthermore, limited, inefficient or expensive distribution networks ensure that the bulk of what little power is available is narrowly concentrated in a handful of countries and commercial centres.
The rapid evolution of renewable energy generation and distribution technology provides sub-Saharan governments with a range of new sustainable energy alternatives. However, base-load electricity remains a key driver.
“Scalable wind and solar projects are often smaller and more focused, requiring less capital and time to develop,” says Van Tonder. “Smaller renewable projects, while often generating less power, can nevertheless support growth in investment if focused on the most productive sectors of an economy through focused investment.”
Renewable energy projects also have the advantage of costing less the longer they operate, depending on the specific technology and operation and maintenance agreements. This means once they are paid off – through user-pay tariff structures that correctly reflect cost – they can be re-focused on supplying cheaper power to non-capital generating elements of the economy.
“Creating the institutional infrastructure to attract global capital at affordable rates and then manage it efficiently remains important,” says Van Tonder. “The development of local currency pools of liquidity and capital is essential. In short, if Africa is to achieve power self-sufficiency, we need to move beyond having to rely on the US dollar to fund every major project.”
While project finance is often raised in foreign currency, project revenues on the continent are generally denominated in local currency. Where the exchange rate between the currency of revenue and the currency of debt diverge, the cost of debt increases dramatically. This carries the risk of extending repayment periods – or defaulting entirely – with exponential cost implications over the long term.
Given these risks and costs, the attempts currently being made by legislators across the continent to deepen domestic capital markets should be encouraged and Pan-African multilateral forums would do well to consider how Asia and other emerging regions deepened local capital markets as a critical development enabler.
Africa stands uniquely placed to develop a diverse and sustainable energy mix, in the shortest time. The strategic use of renewables can also deliver this at the lowest costs and least environmental impact, while building energy infrastructure with the longest shelf-life addressing the long term power needs for the continent.
Earn valuable CPD credits