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Economics of Energy 12/9/2008

Fall 2008
WIU

ENERGY POVERTY IN AFRICA


The under-exploitation of Renewable Energy Sources

Stephan Laouadi
Table of Contents

One Africa Unites in Problems, or the Problem of Many Africas ..........................................................1

A Geographic overview of Energy Resources .......................................................................................2


Disparity of Fossil Fuel Localization ...................................................................................................... 2
The Unexploited Renewable Energy Sources........................................................................................ 3

Improving African Life-Conditions Thru Renewable Energy Sources .....................................................5


The Reality of Energy Poverty .............................................................................................................. 5
Renewable Sources of Energy: a Tool Against Energy Poverty .............................................................. 6
Improving the grids .......................................................................................................................... 6
Large scale projects ......................................................................................................................... 6
Small scale projects.......................................................................................................................... 7

Back to the reality ..............................................................................................................................8

Bibliography ......................................................................................................................................9

i
One Africa Unites in Problems, or the Problem of Many Africas

African countries are generally considered as the poorest countries in the world. This region of the world
counts for 13% of the global population, which represent more than 900 million inhabitants, spread over
53 countries, hundreds of peoples and cultures. Looking at Africa as a whole may seem strange when we
know that Africa by itself is more than several countries, but a mix of peoples, cultures, and behaviors.
For sure studying the global picture imply to focus one the main aspects of this continent and so to
ignore the details and particularities of each regions. By writing this paper as a study of energy poverty
in the African continent the purpose is not to provide particular solutions applicable in state in each
entity but to give a general overview of the actual situation of energy in Africa.

Africa suffers a lot from its energy system; remote areas are generally not connected to the national
grids which are old, badly maintained and so particularly inefficient. Urban people who by luck are
connected cannot rely totally on those grids due to the numerous cuts of electricity. Finally those
countries suffer from the public corruption; reliable energy access is most of the time enjoyed by a
minority of people from the upper-income level society.

In a world which consumes always more and more energy, what is the situation for African countries?
What are the main problems faced by those people? How this continent should use its innumerable
natural resources to improve the situation? As explained before this paper doesn’t have the
pretentiousness to bring solutions to Africa’s energy problems; its main purpose is to inform the reader
about the actual situation of this continent, crib of the humanity.

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A Geographic overview of Energy Resources
Africa is the poorest continent in the world; 10 years ago half of the population was living with less than
$1 per day. In 2002, the Gross National Product per capita (GNP/capita) of Africa was estimated around
$677. The same year, the GDP per capita of the Sub-Saharan Africa (North and South Africa excluded)
was estimated at $306; about 70% of all Africans are living there (World Energy Council 2005).

Disparity of Fossil Fuel Localization


African subsoil is rich in natural resources, 8.9% of the world oil proved reserve and 7.6% of the world
natural gas proved reserve are situated in the continent. Africa is also one of the largest worldwide
producers of coal (World Energy Council 2005). Nevertheless, African management of those resources is
not sustainable, Africa export more than 5.1% of the world primary energy supply and struggle its
consumption for it. The figures below show how African energy management is not sustainable.
Figure 1: Africa’s Oil Reserves, Production and Consumption, 2002

Source: (World Energy Council 2005)


Figure 2: Africa’s Gas Reserves, Production and Consumption, 2002

Source: (World Energy Council 2005)

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Although Africa has lots of natural resources, their geographic localization is “unfair”. More than 70% of
African people live in the Sub-Saharan part of the continent (between North and South Africa), but most
of the natural resource are not located there. Most of the oil and natural gas reserves are located in the
north part of Africa. Libya and Algeria count for about 50% of the African oil proved reserves and North
Africa account for more than 63% of African natural gas reserve. The same thing is true for coal where
90% of all coal reserves are located in South Africa (World Energy Council 2005). Due to this repartition
and the lack of fossil fuel, Sub-Saharan countries import a lot of oil and petroleum product which
represent a big proportion of their balance of trade (between 20% and 40% for non-oil exporting
countries) (Karekezi 2003).

The Unexploited Renewable Energy Sources


The potential for Renewable Energy Source (RES) in Africa is huge but mostly unexploited due to a lack
of public policy, investment, and awareness of the population.
More than 12% of the global hydropower potential is located in Sub-Saharan Africa but only 7% of the
1.1 GW (GigaWatt) hydropower capacity is exploited.
More than 9000 MW (MegaWatt) could be produce thru geothermal power but few countries are
exploited this source of energy like Kenya does, by producing more than 60MW (Karekezi 2003).
Because of its localization close to the equator, most of the African countries enjoy about 325 days of
sunlight that gives an enormous potential for solar power, but as the exception of Algeria which starts
the implementation of solar farms at scale, solar power is still marginal in Africa (Yansane s.d.).
Also unexploited, the wind power capacity of the western coast of Africa would be able to produce more
than 3,750 KWh (KiloWatt hour) but few projects are ended (Jargstorf 2004).
Because of its poor fossil fuel resources, and their unexploited Renewable Energy Sources, most of the
Sub-Saharan African countries rely on biomass which most of the time is exploited without efficiency.
The Figure below shows how much some African countries rely on biomass energy.

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Figure 3: Biomass Energy as a percentage of total energy for selected
Eastern and Southern African countries

Source: (Karekezi 2003)

As we have seen, African localization of primary energy sources is uneven, and the management of its
Renewable Energy Sources is underexploited. In a world which consumes more and more energy, the
situation is once again dramatic for African countries which have seen their consumption decreasing
over the last 2 decades. Between 1980 and 2000, Sub-Saharan countries have seen their consumption of
energy falling from 317Kgoe per capita (Kilogrammes of Oil Equivalent) to 292Kgoe per capita, and their
electricity consumption falling from 431KWh per capita (KiloWatt hour) to 112KWh per capita (Karekezi
2003). As explain in a report from the World Bank “Expanding Electricity Access to Remote Areas”, there
is interdependency between the lack of access to energy, and the several problems faced by those
populations, like the difficult access to clean water, modern telecommunication, health, and education
(Reiche 2000).

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Improving African Life-Conditions Thru Renewable Energy Sources

The Reality of Energy Poverty


The electrification rate of Africa is one of the lowest in the world, on average less than 25% of the
populations are connected to the grids (TALL 2008). This very low level of electrification is a caused of
many problems in rural area, where expending the grid will be too costly, it’s also a problem in urban
area where the grids are not always reliable due to many cuts off. The 3 main actors of the society are
suffering from this energy poverty. Let’s look at some examples for each actor.
As a household level, one of the main problems caused by the energy poverty is the indoor pollution.
Each year worldwide, it’s more than 2.5 million deaths that are caused by an inefficient biomass system
burned for heating and cooking (Victor 2005). The low energy access is also time-consuming for women
who are generally in charge of the home. The figure below shows the difference in women time use with
and without access to electricity.
Figure 4: Women’s Time Use with and without Electricity

Source: (Reiche 2000)

Looking at the consequences of the energy poverty at the public level, it appears that the lack of
electricity is a main problem for health, and education. Without a reliable access to electricity, health
center are sometimes obliged to treats patients in the dark and to rely on biomass and fuel generator to
keep usable vaccines and medicines. Same thing is true for education; where without electricity children
are not able to study at night time (Euronews 2008).
Finally for the private sector the lack of energy access limit their opportunities of growth and increase
their costs. Because industries cannot rely on the national grid due to numerous cuts off, lots of them
rely on fossil fuels to power their equipments. A study from the African Biofuel & Renewable Energy
Fund (ABREF) shows that an increase in oil price by $10/barrel as for consequence to drop by 1.5% up
to 3% the GDP of African countries (TALL 2008).

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Renewable Sources of Energy: a Tool Against
Against Energy Poverty
As we have seen before, the African continent enjoys numerous potential concerning Renewable Energy
Sources. Because of the structure of the continent and the repartition of its population, guarantee the
energy’ access to everybody has to pass thru 3 mains projects types, an improvement of the grids, some
large scale projects and lots of small rural projects for remote area.

Improving the grids


Before starting any large scale project Africa as a whole as to improve its grids which are less and less
efficient. As explain in a report from the NEPAD (New
New Partnership for Africa’s Development),
Development) African
grids are characterized by their low maintenance which conduct to thee unreliability of power supply and
losses that are 2 or 3 times bigger than the international target (Karekezi 2003). Although grids
expansions are costly, especially in remote area, the African Grid System is very small and do not cover
most of the continent. The figure below shows the African grid and the European one
on as a comparison.
Figure 5: African and European grids

Source: (Gaillard 2008)

Large scale projects


The second types of action that will reduce energy poverty in Africa concern the building of large scale
projects.. Due to the Renewable Energy Sources available in Africa and their potentials,
potential 3 main resources
should be exploited. Most firms in the Agro
Agro-industry are using biomass
ass to produce their own energy.
Because
ecause they are not connected with efficiency to the grid
grids and because they produce more energy than
needed, lots of energy is lost. The cogeneration principle which allow firms to produce their own energy
and to sale the surplus is well implemented in countries like Sudan were more than 48% of the
electricity generation
eneration comes from cogeneration. This process can also be available for remote area,

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where industries will sell the surplus thru mini-grids (Karekezi 2003). Another large scale project is the
use of geothermal power, the Rift valley for example in East Africa has a potential of 7,000 MW
(America.gov 2008). Compared to the 8,100 MW produce globally thru geothermal, the Rift Valley
would be able to supply enough energy to reduce consequently energy poverty in this part of the
continent. Hydropower also is underexploited in Africa, there are mainly 2 areas with a big potential, the
axis from the Great African Lake to Zambia and the axis from Guinea to Angola in the Atlantic side of the
continent. Those 2 areas represent a potential of 1900TWh (TeraWatt hour) but only 7% of it is currently
exploited (World Energy Council 2005). Other smaller projects are also possible like the one in the
Mphaki' region in Lesotho which will produce 1MW and provide electricity to 1,500 households and
institutions (Energy Poverty Action 2008).

Small scale projects


Because expending the grids is expensive, rural area will not be connected before a long time, but it
exist alternative solutions that are efficient and cost effective. Off-grid rural electrification is one of
them. Solar power can be use in those remote areas for several applications. Solar Home System (SHS)
for example can provide electricity for several lights, radios and small fans. Because it limits the use of
kerosene lamps and other fuel to burn, SHS improve the indoor air and so reduce the risk related to
indoor pollution. Worldwide, it’s more than 500,000 SHS that have already been installed. Solar can also
be used to powered a water-pumping engine and increase the access to clean water in rural area
(Reiche 2000). Like solar, small scale residential wind turbine can be used to increase the electricity
access in non-connected area. Because of their relative engineering simplicity compared to solar power,
they can be produced and installed by African companies. Some of those small scale wind turbines are
recouping their costs in less than 6 years (Jobe 2006). All those alternative sources of energy can be
applied as a household level but also as a village level thru mini-grid which connect all households to the
main system.

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Back to the reality

Energy poverty should not be as important as it is now in Africa. As we have seen solutions exist to
increase the access to modern energy, nevertheless it also exist lots of barriers that brake energy
development. Some of them are financial where companies hesitate to invest in Africa. Some are
political where, if the government is not corrupt, it is just not aware or not interested in the potential of
renewable energy. Lastly and maybe the most tragic one, some barriers are technological where African
people don’t have the skills to produce, install and maintain some high engineering systems. Reducing
energy poverty in Africa will take time, and more than money, it will need lots of willingness.

“Energy is an engine for growth and poverty reduction, and therefore it


should be accorded high priority and reflected in policies, programs and
partnership at national and international level”
(NEPAD 2003)

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