Since the 1920s, diesel generators have been king of Africa’s small-scale, off-grid energy supply. Still widely used as the primary source of electricity on remote locations – or as a back up where supply is unreliable (which means almost everywhere in Africa) – it would take a brave pundit to suggest the eclipse of this established technology. Yet the continent’s somewhat belated enlistment in the global renewable energy race suggests this may be happening.
Projects around Africa demonstrate that off-grid is not necessarily second best, and that sustainable energy is often more affordable. Diesel generators are generally cheap to install but expensive to run. Diesel itself is no longer an economical fuel and hasn’t been since the eight-fold increase in global oil prices post-1998.
Maintenance costs are high and fuel has to be trucked-in, which can pose both a technical challenge and security risks. In some locales, diesel theft is an enduring cottage industry.
Traditionally, off-grid renewable energy has had the opposite cost profile – expensive to install and cheap to run. However, the massive adoption of renewable technologies worldwide has dramatically brought down capital costs as economies of scale and technical development have kicked in.
The biggest winner of all has been solar power. Mass production of solar panels in China and outright dumping into the US market has seen the price of solar photovoltaic (PV) modules fall by about 80% since 2008, to less than one dollar per watt capacity. Other renewables have also become cheaper but not on the scale of solar. The cost of wind turbines, for example, has dropped about 30% over the same period.
Happily, Africa has massive solar potential. According to NASA, only Australia experiences more solar radiation than Africa.
That said, Africa also has the biggest off-grid challenges of any continent. According to International Energy Authority estimates, only about one-third of the continent’s population (roughly 350 million people) have access to electricity. Even then, they use only around as much as New York State did in 2010.
The consequences are widely regarded as a classic development trap. Schools, clinics and agricultural projects are hamstrung by energy poverty, and failures here ensure that the next generation will face the same problems.
According to WHO research across 11 African countries (including the most populous), 25% of health institutions do not have reliable access to electricity. Many of these have installed diesel generators but only about one-third were actually working. The rest were either broken or there was insufficient funding for fuel.
‘South Africa has made good progress with the national electrification programme, with around 85% of households having access to electricity’
The case for cheap, low-maintenance alternatives is unassailable. As Jean Paul de Villiers, MD of South African company Soventix, points out: ‘South Africa, by large, has made good progress with the national electrification programme, with around 85% of households having access to electricity. However, there still remains a large number of households, particularly in remote rural areas, where the cost- effectiveness of getting grid electricity will prove challenging. In these areas, focus should be given to providing off-grid renewable energy solutions, which could be deployed relatively quickly without the need for complicated and expensive infrastructure.’
International donors and the non-governmental sector have stepped into this gap. There have undoubtedly been quality-of-life improvements delivered by small-scale, off-grid renewable programmes, particularly solar.
Many believe that Africa can move directly to renewable energy, ‘leapfrogging’ the fossil fuel stage – much as the continent has adopted cellular telephony without ever having an extensive landline network.
It’s not hard to find data detailing the need for off-grid Africa to focus on renewable solutions. The United Nations Environmental Programme (UNEP) points out that Kenyans spend about US$900 million per year on off-grid, carbon-based lighting – mostly diesel and paraffin. This process generates more than 2.3 million tons of carbon dioxide every year.
In Nigeria’s case, the UNEP argues that replacing all kerosene, candles and batteries used annually for off-grid lighting would save the country the equivalent of 17.3 million barrels of crude oil (valued at US$1.4 billion).
These are dramatic figures. The outstanding question is how to set up the microeconomic incentives that will make this transition possible.
Governments and the international development community are not the best players to do so. As is often the case in African development, it’s the private sector that is leading the way.
The continent’s extensive adoption of mobile telephony is a key area. It has more than 100 000 base stations, according to the Africa-focused private-equity group Emerging Capital Partners. Every one of these requires electricity in both primary power and backup forms. The power needs of cellular base stations vary enormously from a light bulb scale 50W to 500 kW, though typically it’s around 1.5 kW. Wind and solar microgeneration fit very comfortably with this requirement.
In Lesotho, a quarter of Vodacom’s network is powered by green base stations, wind and solar. The actual number – 40 out of 165 – might seem a little trivial but the direction is clear. Vodacom Lesotho’s next 80 sites will all use renewable energy resources only. ‘The Lesotho business has managed to eliminate the need to purchase backup [diesel] generators for its base stations,’ says Vodacom Lesotho’s executive head of sustainability and corporate citizenship, Suraya Hamdulay.
Although the initiative hits all the right corporate social responsibility issues, Hamdulay is clear on one key point: the business case is indisputable. ‘Green base stations reduce ongoing operating costs and these cost savings will ultimately benefit our customers,’ she says.
Sustainable tourism is another development vector. The game, safari and diving lodges that pepper the continent have traditionally used diesel-powered backup generators.
The rule of thumb is that where electricity supply is most unreliable, wind and solar power adoption is most likely
The rule of thumb is that where electricity supply is most unreliable, wind and solar power adoption is most likely. The well-established sustainable tourism sector in Mozambique’s Inhambane Peninsula resorts to diesel backup generation for up to 12 hours a week – and it’s not under much economic pressure to change.
On the other hand, Mtentu Lodge on South Africa’s Wild Coast is many kilometres away from the nearest Eskom power station. This has forced it to look for other energy solutions.
The result is the installation of solar panels and a wind turbine that charge a bank of batteries to provide the energy for lighting, music, phone and laptop charging. At present, the lodge’s fridges, freezers and stoves run on gas but the intention is to fully convert to be solely reliant on solar energy.
Major funders – including the World Bank, African Development Bank and US President Barack Obama’s Power Africa initiative – have put their financial muscle behind renewable energy. However, small-scale off-grid operators often claim that they are ignored. The big effort, they argue, goes into national on-grid renewables programmes. Off-grid requirements are seen as an aberration that will be dealt with through improved national systems.
One African country that has seen no negative results of such short-sightedness is South Africa. Industrial operators are eager to backup unreliable (and increasingly expensive) grid supply with their own – sometimes very large – generation capacity.
In 2013, petrochemicals giant Sasol inaugurated a 140 MW gas generator at its Sasolburg plant. A national funder, the Industrial Development Corporation encourages off-grid operations in industry. Its most impressive success story so far is the energy-intensive SA Calcium Carbide (SACC) cogeneration plant at Newcastle in KwaZulu-Natal, the biggest such factory in the southern hemisphere.
In 2013, SACC inaugurated an 8 MW capacity generator using only waste gas from the carbide production process. The generator, which is carbon-neutral, is set to reduce SACC’s reliance on Eskom by 20% – this will cut the company’s electricity bill by an estimated ZAR100 million per year.
Industrial plants on this scale are thin on the ground in most of Africa. A recent municipal development in Cape Town, however, is an example to the rest of the continent.
A minibus taxi rank, used regularly by about 50 vehicles, was converted to rooftop solar PV power in August 2014: the panels generate energy that is stored in 24 large batteries on-site. The power is used for lighting, electric gates and to boil water for the kitchen.
According to Cape Town mayoral committee member for transport Brett Herron, the facility drew only 2% of its power from the national grid in its first month of operation.
The city’s motives are a combination of sustainability-mindedness and economics. Herron argues that the initiative has ‘proved that the facility works and is sustainable. Rolling the system out on scale will save the city millions in operating costs’.
Therein lies the rub. Sustainable energy must prove itself cost-effective if it’s to be widely adopted as a solution for Africa’s off-grid needs. Driven by dramatic cost reductions, the signal sent by projects throughout the continent is that it is in the process of doing so. It’s becoming apparent that off-grid is not merely second best but a highly desirable first choice.
