The Key To Unlocking Africa’s Economic Potential Lies In Its Power Supply

If one had to name a single resource key to unlocking Africa’s economic potential, including job creation, access to knowledge, agriculture and industrial transformation, the power supply would have to be high up on that list.

According to a 2016 study, approximately 43 percent of the population of sub-Saharan Africa – up to 600 million people – live without access to electricity. While most of that population lives in rural regions, city dwellers also face access challenges; in fact, electricity only reaches a third of the urban sub-Saharan population. And this lack of power is stifling economic growth, as well as hindering improvements in health and education.

Connecting African cities, towns and villages is the next step to enabling development on a larger scale. Supporting the power infrastructure that would create this environment, however, creates significant challenges, with inadequate infrastructure making the expansion of grid networks financially and logistically infeasible for many countries. When your roads are nothing more than dirt tracks, how do you build and supply what is needed for a power grid?

Although national, centralized grids may be too costly an option for some governments, projections see electrification across the entire continent rising to a rate of 70 percent by 2040, bringing electricity and power to 800 million more people. Connection to a grid will change daily life for hundreds of millions.

So, what technologies will achieve this level of electrification? For maximized impact, the future of power generation technology in Africa lies in a mix of traditional power plants, some small-scale kits for individual households in remote areas and mini grids which operate at the village level. What’s more, they’ll all operate at different scales. Combining central plants and local grids will keep this demand going – and help people access the power they need.

Creating Reliable Grids

The majority of power generated in Africa still relies upon fossil fuels, alongside hydro-electric power from dams, to scale up energy generation. As urbanization across the continent increases and industry outputs continue to grow, it is likely that residents will see greater access to on-grid power. But even where grid power exists, service can often be unreliable, and daily outages are the norm.

In fact, about five out of nine countries in Africa experience regular power shortages and blackouts, costing their economies on average two percent of their GDP, according to the Africa Progress Panel. And a recent report by the Center for Global Development (CGD), which studied energy demand in 12 African countries, found that among those with access to grid electricity, at least half of the population suffer electricity outages at least once a day.

When the central grid is unreliable, it means that off-grid and mini grid solutions, such as generator sets, become the essential technologies enabling people to meet their basic needs. Even in urbanized areas, where grid networks are usually at their most developed, the mini and off-grid options are integral to everyday life. For example, in Nigeria, the CGD study showed that on-grid users in urban areas rely on generators more heavily than those with grid power in rural areas (51 percent versus 43 percent).

To meet Africa’s growing energy needs, these solutions, which are cheap and quick to install, are already filling the gaps left behind by on-grid systems.

Getting Off-The-Grid Power In Rural Communities

In many parts of rural Africa, kerosene is the most common energy source for cooking and electricity. But that fuel gives off toxic smoke that is harmful to human health and the environment. It also produces poor lighting, is expensive to buy and can be a major cause of fires.

Luckily, there are now modern, high-quality off-grid lighting and energy products on the market that offer real, sustainable alternatives to kerosene – mini grids and solar home systems.

Solar home kits typically include solar panels and a battery that supports power sockets, mobile phone adapters, and light bulbs. As the name suggests, home kits operate at a household scale and are very affordable.

Investments in solar kits have begun to boom, providing a simple way for companies to enter the market in Africa with limited risk. Initiatives such as Beyond the Grid, from the United States Agency for International Development’s Power Africa program, are part of this wave, with the organization encouraging development of future power access.

This growth effort creates positive results; according to a 2018 report by Reuters, at least 11 power companies providing solar home kits have moved into West Africa, with most making a noticeable impact since 2016. Speaking of development, off-grid providers have even been labeled “the new development banks”, as they give customers small loans to connect their households to the new systems. The provider can use the repayment records of each customer to create individual credit scores, allowing them access to power upgrades and further loan options for other household or business appliances. In other words, getting households connected now plugs them into the world for the foreseeable future.

Mini Grids – Another Decentralization Tactic

Off-grid solutions are on the rise, but with increasing demand for energy-intensive appliances, especially televisions and refrigerators, the small size of off-grid products cannot serve every need.

That means there is an emerging role for mini grids, which use a mix of renewable resources such as solar, biomass or onshore wind turbines, as well as udiesel generators. Mini grids are built at a village scale and require less capital investment. Importantly, though, they provide more power than off-grid systems, allowing rural areas to use machinery and equipment that enhance their own productivity.

Compared to expansions of a national grid, mini grid options are a much faster and cheaper option. They can also bolster national grids without eliminating them, instead providing continuity of power during interruptions.

Resilience In A Pinch, Dependability For Years

In 2015, two of Algeria’s main generating plants suffered power outages during the holy month of Ramadan. It was crucial to restore electricity to the population as quickly as possible. The Algerian state energy company turned to PW Power Systems, part of Mitsubishi Heavy Industries Group, for an emergency solution.

Four mobile gas turbine units, providing 30 MW each, were completed, commissioned and brought online in less than three weeks, and they are still running to this day. Using natural gas as its fuel, these mobile gas turbines also produce significantly fewer emissions than diesel generator set solutions, pushing power generation closer toward the needed energy transition of the coming decades.

This example from Algeria shows how mini grids can be used to increase the resilience of existing electricity systems. When power cuts hit, businesses and households of all sizes can be affected, and restoring services quickly is not always easy. Mini grids, like the one installed in Algeria, ensure consumers have continuous access to power.

Future Expansions

The flexibility of power provided by mini grids will be crucial to expanding power access. Most mini grids in Africa are powered by diesel or hydropower systems. No system is perfect; diesel systems are at the mercy of fuel-supply disruptions and cost fluctuations; renewable energy generation still depend on weather and seasonal patterns, since consistent storage solutions are still in early stages. To remain as reliable as possible, mini grids can be built as hybrid systems, combining diesel with solar or wind power to mitigate these risks.

While significant investment is pouring into small off-grid systems such as solar home kits, the reality is that both grid electricity and off-grid solutions are currently inadequate to meet many African consumers’ modern energy demands. Mini grids ultimately fill that gap as helpers, rather than competitors, to off-grid solutions.

Ultimately, the emergence of mini grids shows that both on- and off-grid electricity can bring power-related social and economic benefits to millions of people across the continent in the coming years. By combining technology across different infrastructure platforms, the future for power generation in Africa looks bright.

A leading industrial firm, Mitsubishi Heavy Industries Group (40 billion USD annual revenue) is finding new, simpler and sustainable ways to power cities

Source: The Key To Unlocking Africa’s Economic Potential Lies In Its Power Supply

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