Policy and governance at heart of Africa’s energy woes

The reason a World Bank study of 2019 found only 43% of the population in sub-Saharan Africa has access to reliable and affordable electricity was due to policy and governance on the continent.

The continent was rich in renewable energy and fossil fuel resources, said chair of the Nigerian Ministerial Task Force on Power, Professor Abubakar Sambo at the Africa Energy Indaba in Cape Town on Monday.

Sambo said African countries had outdated energy policies that are not dynamic and adaptive to changing circumstances, and to complicate matters, newly elected governments often threw out the previous government’s policies rather than adjust them toward market requirements.

He said African countries needed to ensure their energy policies were robust and considered the availability of resources in the country, and at the same time took care of underprivileged communities.

“Almost all African countries have signed the sustainable development goals (SDGs) but these are not reflected in their policies.”

Further, he said these policies then needed “political will at the highest level” in order to be implemented.

In a nod to South Africa’s Integrated Resource Plan (IRP) released last year and updated from the 2011 IRP, he was in favour of countries making optimum use of the energy resources at their disposal.

The 2019 IRP, which projects to 2030, provides for increased amounts of renewable energy and gas but advocates for an overall energy mix.

“If we have coal, perhaps we should use it, oil and gas, use it,” said Sambo.

But he warned that fossil fuels were finite and countries needed to build their renewable energy capacity.

He said the Nigerian government had developed “a special purpose vehicle to build 12 gas-powered power plants and was also considering developing nuclear power due to its lack of carbon emissions, and in this respect was negotiating with Russia and France.

In order to attract private sector investment, governments needed to provide assurance when it came to tariffs, said Zambia’s ministry of energy representative Victor Chingangu.

“The private sector is not really coming on board due to failure by government to provide assurance, particularly in austerity. The private sector is interested in profits so governments must really give assurance on cost effectiveness because tariff is a big issue in deciding investment,” said Chingangu.

He said the private sector was wary when the state utility was running power generation, transmission, and distribution.

There were also issues of credit worthiness when it came to state utilities.

He said legal reform was required to de-link electricity generation, transmission, and distribution. This echoes the plans to unbundle Eskom announced by the South African government last year.

“We need to draw a line across who should be involved in distribution, transmission, generation.”

However, he said it should not only be about profit-making as Africa also needed to achieve its SDGs.

Director of the International Renewable Energy Agency’s country support and partnership division, Gurbuz Gonul, advocated for renewable energy due to the low cost of wind and solar, and the development of storage solutions gave it further feasibility.

The question, said Gonul, was how to integrate more cheap renewable energy without compromising the electricity grid.

He said many countries were “stuck in a baseload approach” and needed to create a more flexible power supply that included storage, combined with the data available through digitisation to optimise the operation of the system.

The design of the power system should not be piecemeal, he said, but designed to include renewable energy.

He said renewable energy enabled a green revolution in which jobs existed across the value chain.

While components were mostly manufactured in Europe or Asia due to the competitiveness of the manufacturing sector, manufacturing was only part of the chain.

There was also design, commissioning, infrastructure build and maintenance.

While there were new gas and oil discoveries which governments could choose how to use, policy makers needed to take the right decisions to inform the next 20 to 50 years to ensure they were part of the energy transition which was taking place, and to ensure they did not end up with stranded fossil fuel assets.

Secretary-general of the SA National Energy Association (Sanea), Wendy Poulton, spoke to the need for skills development and transfer in the transition from fossil fuels to renewable energy.

Poulton said Sanea’s own report identified skills development as an emerging risk.

“We’re looking at an energy skills roadmap over the next 30 years and how we can use them in Africa,” she said.

“Jobs will disappear and new ones will emerge.”

A “different mindset” was required from political leaders and policy makers.

At the moment, policy changes took years to bring about, yet in order for countries to take advantage of opportunities in the rapidly changing energy sector, agility and flexibility in policy was required.

In terms of South Africa’s own IRP, which was published in October last year, the Africa Energy Indaba heard from deputy director-general of the mineral resources and energy department that it would take from three to six months for the national energy regulator, Nersa, to sign it off.

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