Solar development in Africa: Success and Challenges

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1 Solar development in Africa: Success and Challenges Benard Muok, PhD Director Centre for Research, Innovation and Technology Jaramogi Oginga Odinga University of Science and Technology

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3 Africa is undergoing unprecedented and sustained growth. By 2050, the continent will be home to at least 2 billion people twice as many as today with 40% living in rural areas. In 2010, about 590 million African people (57% of the population) had no access to electricity, and 700 million (68% of the population) were living without clean cooking facilities. If these current energy access trends continue, in 2030 there will still be 655 million people in Africa (42% of the population) without access to power, and 866 million (56% of the population) without clean cooking facilities, depriving the majority of the population of the opportunity to pursue a healthy and productive life.

4 Comparison of rural and urban electricity access in 2010 and 2030, if current trends continue

5 Africa s economies are growing currently at an average rate of 4% per year. Six of the world s ten fastest growing economies over the past decade were in sub-saharan Africa. If this growth is maintained, Africa s GDP should increase roughly threefold by 2030 and seven-fold by However, sustaining such growth will only be possible if fuelled by a much larger and better performing energy sector. Africans currently consume only one quarter of the global average energy per capita, using a mix of hydropower, fossil fuels and biomass mostly in traditional uses. As shown in Figure 2, providing full electricity access to all Africans would require only an additional 900 TWh over 20 years, an amount that corresponds to one year of current additional global power consumption.

6 comparison of current African power consumption trend vs. full access in 2030 As shown this figure, providing full electricity access to all Africans would require only an additional 900 TWh over 20 years, an amount that corresponds to one year of current additional global power consumption.

7 Energy access situation in LDCs and SSA Share of people without electricity access for developing countries, 2008

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11 Rich in resources In the last 5 years about 30% of new oil and gas discoveries were in SSA

12 Poor in supply In SSA 640 million people 2/3 of the population live without electricity

13 Impact of electricity outage on business

14 Nearly 1 billion people gain access to but this will still leave nearly 530 million without accesss

15 Access to energy is a pre-requisite of economic and social development because virtually any productive activity needs energy as an input. Basic levels of electricity access (e.g. lighting, communication, healthcare, and education) provide substantial benefits for communities and households. Providing a basic level of electricity access with renewable sources is increasingly economically feasible (e.g. kerosene lighting systems at USD 4 15 per month cost households significantly more than the USD 2 per month to run a solar lighting systems). However, sustained economic development requires a definition of electricity access, which asserts that energy levels should provide for basic services as well as for productive uses. If these services are based on renewable energy sources, positive environmental impacts can also be achieved.

16 Emergence of solar energy Abundant resources Technologies (Solar PV and CSP) SHS Solar water pump Solar heaters Solar gardens (include rooftop, and gardens)

17 Summary of RE potentials for different African region. Results are given in terawatt hours (TWh) per year. In the case of wind energy the total wind potential is separated by capacity factor (CF).

18 Africa solar PV potentials Africa solar PV potentials minus exclusion zones

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20 The different models of SHS in rural Africa There are currently 3 distinct user models practiced Fee-for-service SHS - SHS provided by a local Energy Service Company e.g. Zambia Market SHS - the SHS is bought by the user on the market under commercial terms. Common in Kenya Community (social enterprise) model

21 Consumer cost of electricity Financing Fee-For-Service SHS Installation and monthly fee foreign donors, NGOs as capital investments and favorable loan models Market SHS Purchase of the system, battery replacement foreign donors, NGOs as micro-finance arrangement through local banks and financial institutions Ownership of SHS materials Fully owned by local service provider Fully owned by the user Operation and maintenance Done by the local service providers Service centres at a fee Reliability Depends on the battery and proper use and maintenance, repairs may take time Depends on the battery and proper use and maintenanc, repairs are faster

22 Fee-for-service SHS vs. market SHS Models Fee-for-service SHS Models in Zambia Complex and large-scale project by the Government of Zambia and the SIDA & the GEF, The donations of SIDA and GEF lowered the total costs of the SHS for the end-user. The project is a complex and lengthy so need institutional and legal framework User sign agreement to take care of the system User has no choice on the type of system

23 Market SHS Models in Kenya Kenya has the largest private sector dominated SHS market in any of the developing countries. The access to SHS is self-organized by the user within the framework of an unsubsidized over-the-counter commercial market. Only 25% of sales are government or donor financed. The market is spread throughout the country. Its estimated that there over 250,000 systems installed in households

24 There are hundreds of rural vendors and services and the demand is increasing. The user has to buy the SHS from a local and has to distributor and can chose between several different types of SHS Since not all the users can afford the higher quality SHS, several users choose the lower quality SHS or decide not to purchase all the parts of the system, which results in lower performance of the system. However, costs of the SHS in Kenya are steadily lowering due to the increased competition. But also risk of cheap imports from China

25 Large rooftop distributed solar 600 kw solar power at Strathmore University, follows a 500 kw installed by UNEP

26 Hire purchase The service is mainly available to salaried workers either in the civil service and big companies The service provider enter into a contractual agreement with the employers to recover mainly installments from the workers and remit to the service provider The model is not appropriate for the rural unsalaried population

27 Pay as you go The users pays small upfront fee to buy the system, with small amounts paid weekly or monthly till the full amount is paid then the ownership transferred to the user. To avoid defaulting the service providers has entered into partnership with local cellular network as well as mobile money platforms Customers can easily pay via mobile money services (M-PESA) In Kenya the service operated by in partnership with Safaricom called M-KOPA (literary meaning mobile loan)

28 Pay as you go but ownership not transferred Same as before but ownership not transferred It s like how pre-paid cell phones work, where you buy a phone and prepaid minutes Much cheaper Facing social acceptability issues some social pride associated with ownership

29 Micro-credit A number of micro-credit companies have started working with service providers to pay upfront cost to the provider and recover from end users at interest Examples KWFT, Equity Bank

30 Community Based Systems There are two systems being piloted: Mini grids Works best where there is high population concentration with a small area Lines are connected to the household or business premises Normal metering is done Charging/Energy Centres More appropriate where the population is scattered

31 The Energy Centre Model Design

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34 Community solar

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39 Barriers

40 Conclusion Africa is a large and diverse continent and economic and energy sector development differs widely across its 54 countries. Therefore, every country confronts a different set of challenges. Countries rich in fossil fuels are faced with decisions of whether to use those resources domestically, or to export them and seek alternative energy sources at home. Countries which currently import fossil fuels need to decide to either continue on their current path, or strive for energy sufficiency through alternatives, such as renewables. Potentials are varied - interconnection and power pools Decisions concerning the development of the African energy sector will have long-term implications for individual welfare, national economic development, and greenhouse gas emissions.

41 Off-grid and mini-grids will still paly a big role energy access to the unconnected there will be still about 530 million without access by However, all of this depends on the institutional framework with clear policies and regulatory framework. Feed in tariffs PPA Tax incentives Net metering Standards - Establish quality control systems for the purpose of protecting the market from counterfeits and sub-standard products Develop a financing mechanism to support research and development of solar market. This should include a deliberate attempt to attract private sector financing Strengthen capacities across entire value chain and develop necessary infrastructure and technical capacity at the local level for developing the last mile distribution channel and providing after-sales service

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43 Thank you!!! Mobile:

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