Why is renewable energy important in Africa? I would like to unpack this question by exploring five reasons why renewable energy is important for the continent and how this links to what we are likely to see growth/development-wise over the next few years.
Access to energy is essential for the reduction of poverty and promotion of economic growth. (Communication technologies, education, industrialisation, agricultural improvement and expansion of municipal water systems all require abundant, reliable, and cost-effective energy access.)
There is no doubt a correlation between the number of new households connected to electricity and a rise in gross domestic product. Access to electricity touches every point of a country’s economic and social fabric.
It makes it easier for students to study, it reduces exposure to harmful indoor air pollution through the removal of bio-mass or paraffin as fuel used for light and heat, it assists in the provision of crucial health and other services plus so much more.
Access to electricity leads to increased access to education; it means more trade and commercial activity and therefore more jobs.
Upliftment
It is essential for the general upliftment of a country as it is the basis for a modern society. It is worthwhile to note that around 40percent of the population in developing countries does not have access to electricity, with only 2percent to 5percent of the sub-Saharan African population being serviced by electric power grids (compared to 98percent in Thailand and 85percent in Mexico).
There is massive opportunity on the continent for growth and development through greater access to electricity. This is why discussions around renewable energy solutions in Africa are so vital.
Small-scale renewable energy production is especially important in remote, rural locations for several reasons.
It is incredibly expensive and time-consuming to lay large-scale grid connections (imagine the task of negotiating with landowners along 1000km of land in order to secure permission to build towers). There is also the massive costs associated with building large, central power stations (be they coal, hydro or any other means).
Large-scale power plants are mega-projects that take many years to design, plan, fund and then build and they are tremendously complicated undertakings. Smaller renewable energy production points in remote locations require substantially less time and budget.
Smaller systems can also be tailored to the needs of a particular location. They are scalable so they can be adapted as needs change and they don't require a massive transmission network.
Fuelling growth
In the long run the aim should be for renewable energy investments to be spent on local materials and workmanship, building and developing local communities and economies and fuelling growth.
What local renewable energy projects can do is create opportunities for construction jobs that are temporary as well as longer-term jobs to maintain the facilities.
There are also secondary jobs through licensing deals, selling of "airtime" to access the power, installation of pre-manufactured kits and more.
As most of the equipment is still imported, the local focus needs to be on skills to install and maintain. It is now possible to connect commercial interests as well as households, spreading the income and generating opportunities closer to where people live.
Smaller players are also able to enter the market to provide more energy, and as is demonstrated by the amount of capital raised, the financial sector is clearly in favour of this model. It sees it as a viable sector for investment.
Tech is cheaper and becoming smaller and easier to implement and manage. IT management is in the hands of consumers and payment systems are changing - these factors are all driving the energy revolution and providing exciting opportunities for players in Africa.
There are massive opportunities for innovation, and therefore the potential for SMMEs is large. As the technology gets more developed, we will start to see African solutions being developed to manufacture the products on the continent, cutting the length of the supply chain and creating more jobs in the manufacturing sector.
The time is ripe for a real energy revolution which is why we are hosting Energy Revolution Africa at African Utility Week for the first time this year.
Evan Schiff is the event director of African Utility Week and Energy Revolution Africa, which will be hosted for the first time this year as a co-located event at African Utility Week from May 16 to 18 at the CTICC.