The mobile phone revolution brought the ability to instantly communicate, trade and bank straight into the hands of millions of people in Africa who previously had little access to communication technology.
Giving people access to mobile phones was achieved largely without governments having to invest in expensive, and increasingly irrelevant, infrastructure such as phone lines. This helped to keep the cost of using these services down and at a level even low-income earners could afford.
Experts in the renewable energy field believe that a similar scenario could play out in the African energy sector.
More than half-a-billion people in Africa still have no access to electricity or insufficient access. In SA, 13% of the population, or about 7.8-million people, are not connected to the grid. Experts believe the rollout of mini grids — capable of providing renewable energy to small towns and rural communities — offer an opportunity for Africa to leapfrog from no electricity to cheap, renewable energy without having to build expensive, utility-scale energy generation and transmission infrastructure.
Speaking during a panel discussion at the Africa Energy Indaba in Cape Town, Bruce Anderson from 247Solar, a US-based energy company specialising in concentrated solar power installations, said strong parallels exist between bringing electricity generation to parts of Africa that do not have sufficient access to power and what happened with telecommunication on the continent. Having access to affordable electricity could have an even more profound effect on economic growth in Africa than access to mobile phones had, he said.
“But for economic growth you need electricity all the time, not just during the day.” This, said Anderson, was one of the shortcomings of having access to electricity only through a small, off-grid, renewable source, with no connection to baseload supply.
New technologies were now emerging that could help bridge this supply gap, said Greg Nichollas of SA-based energy company Lesedi Nuclear Services.
Typically, he said, access to baseload supply from a utility such as Eskom would be needed to ensure this, but new innovations such as concentrated solar power, that can store electricity more easily for night-time use, and small modular nuclear reactors with generation capacity of about 300MW, had the potential to provide enough baseload energy to ensure security of supply for towns and even small cities.
However, alongside these opportunities there were challenges to overcome and missed opportunities that had to be avoided.
Nichollas said that the energy sector was “going through a revolution at the moment”, but countries such as SA had to make sure that the regulatory requirements were in place to facilitate this.
“Mini grids can be a facilitator for economic growth, but for investors to step in government will first have to put in place regulations to facilitate an incentive, rather than obstruct this type of development,” he said.
New electricity regulations that were being proposed in SA would obstruct rather than encourage investment in independent power generation, Nichollas said.
In SA, new regulations were suggesting changes be made to the electricity tariff structure whereby any customer who had some self-generation capacity, from solar generation for example, would pay “huge accessibility charges just to have access to the grid when they need it”.
This was a hindrance to investment in mini grids, he said. Nichollas was referring to electricity pricing principles that were approved by the National Energy Regulator of SA (Nersa) last year which indicated that the cost of variable load supply (such as peak demand and grid-based backup for those who generate their own electricity) could be five to ten times more expensive than the baseload tariff.
Nichollas said the requirement of localisation was also a hindrance to investors in off-grid renewable energy projects since mass production and economies of scale were such that Africa would never be able to compete on a stand-alone basis with large manufacturing sectors elsewhere.
One of the intentions of SA’s Renewable Energy Independent Power Producer Programme was to promote not just independent and renewable power generation but also local manufacturing of the equipment used to generate this power, such as solar panels and wind turbines. Those who have invested in the “large amount” of solar and wind projects in SA seemed to have “found a way to negotiate their way out of the localisation requirement”, he said.
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