Large-scale public investments in hydropower underpinned the strategy, including the Gilgel Gibe 3 dam and the Grand Ethiopian Renaissance Dam
By Michael Tichareva
In this forth article on the subject of clean energy, climate change and poverty reduction we continue with emerging trends and case studies as reported in the 2015 Africa Progress Report (“APR”).
The story of Rwanda continues to inspire as the country continues to develop solutions. Starting from an extremely low base, Rwanda expanded electricity access by 160 per cent in just three years between 2008 and 2011. New plans to scale up both access and power-generation capacity were then developed.
Renewable technologies are transforming what is possible through decentralised provision. One example comes from a private initiative to extend Rwanda’s power into areas beyond the grid.
Ignite Power, the first part of an ambitious plan aimed at achieving universal access to clean energy coverage, brought together the combined capabilities of many organisations, including Bloomberg New Energy Finance, the Milken Institute, a Rwandan government partner and several private actors.
The first pillar is off-grid solar technology: a pre-paid system that can power four lights, a radio and television, and charge cell phones. The total cost for a household starts at just over US$1 per week under a “rent-to-own” model.
In September 2014, Ignite Power signed an agreement to install their technology for up to 1 million households. Less than three months later, a pilot phase of 1,008 units was completed. The company then geared up to provide 750,000 units in the two years to 2016. The project demonstrated the potential for speedy delivery, going from vision to plan and deployment in less than two years.
The active participation of government has also been critical to the success of the project. The Rwandan government provided credit guarantees and, most importantly, a stable planning environment for private investors.
We also take a look at Ethiopia that intends to emerge as a net exporter of clean energy to the region. As one of the world’s highest-growth economies in the past decade, Ethiopia has seen demand for electricity rise sharply. Increased investment has expanded net electricity generation five fold.
Even so, power shortages continue to hold back economic growth and grid coverage is limited, with just 15-20 percent of rural Ethiopians having access to electricity.
Ethiopia’s Growth and Transformation Programme (2010-2015) and its successor (2015-2020) changed this picture. The strategy aims at another five fold increase in power generation, from 2,000 MW to 10,000 MW, with a doubling of grid connection from 2 million to 4 million households and 75 per cent of villages connected to the grid.
Large-scale public investments in hydropower underpinned the strategy, including the Gilgel Gibe 3 dam and the Grand Ethiopian Renaissance Dam, a 6,000 MW hydropower project. The World Bank forecasts that Ethiopian electricity sales would rise from 4,000 MW in 2011 to 17,000 MW in 2020. By 2030, the aim is to export at least 5,000 MW.
Total investment requirements are estimated at around US$2 billion annually, which is double previous levels. The World Bank and the African Development Bank (AfDB) financed a transmission line capable of transporting 2,000 MW of electricity from Ethiopia to Kenya.
Ethiopia is also investing heavily in non-hydro renewable development with one of the region’s largest wind-farm projects being the 153 MW Adama II project that was developed by Power Construction Corporation of China at a cost of $345m.
This emphasis on renewable energy will lead to the abatement of 250 carbon dioxide equivalent by 2030, which is a decrease in greenhouse gas emissions of up to 64 per cent compared with a business-as-usual mode.
We also illustrate another success story of Kenya in trying to reduce the cost of power through another off-grid initiative. Azuri Technologies in Kenya produces solar home systems that incorporate a pay-as-you-go controller. This is activated by a code which is obtained by purchasing a scratchcard and is then sent by SMS to Azuri.
Customers pay an initial fee of about US$10 for the installation of the lighting system in their home, comprising a 2.5 watt peak capacity (Wp) solar PV module, a battery, two LED light bulbs and a USB socket for charging phones. They pay about US$1.50 for a weekly scratchcard, which is about half of the typical US$3 a week spent on kerosene for lighting.
After 18 months, users can pay a fee of about US$5 to have the system permanently unlocked or they can upgrade to a larger system.
Many other African countries can certainly learn from these examples that bring hope and clearly show that Africa can take a leadership role especially if Governments cooperate at a regional level.
Michael Tichareva is the Managing Director of National Standard Finance Africa and the Executive Chairman of its affiliate, Claxon Actuaries. He can be reached on firstname.lastname@example.org or email@example.com.
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