By Justus Wanzala
NAIROBI (IDN) – Heightened demand for energy, a shift in policy and the emergence of viable entrepreneurial innovations are propelling transition to sustainable energy in the East African region.
This emerged during a two-day conference organised by Kenya’s Strathmore University‘s Energy Research Centre (SERC) in partnership with Renewable Energy Solutions for Africa (RES4Africa) – an association that promotes the deployment of large-scale and decentralised renewable energy in sub-Saharan African countries. The meeting was held on in Nairobi.
During the January 23-24 conference, which was convened here with support from the Africa-EU Energy Partnership (AEEP) to discuss best practices for effective renewable energy deployment in the region, stakeholders explored issues facing the sector and possible solutions.
Momentum has also been buoyed by strong regional agencies that enhance collaboration in the energy sector development. These include the Eastern Africa Power Pool (EAPP), with a mandate to ensure optimum development of energy resources and ease access to electricity, and the East African Centre for Renewable Energy and Energy Efficiency (EACREEE) which, among other roles, ensures policy harmonisation and awareness creation.
Isaac Kiva, Director of Renewable Energy at the Kenya’s Ministry of Energy and Petroleum said they are supporting the development of renewable energy. “Having a grid that can meet demand is important, and it is the reason Kenya has a renewable energy Master Plan,” he added.
However, the journey for the growth of renewable energy is still fraught with challenges. Bernard Osawa, Vice Chair of the Energy Sector Board, at the Kenya Private Sector Alliance (KEPSA), a national body of the private sector in Kenya, said that although Independent power producers are critical for power generation in Kenya, they lack capacity and finance for large-scale generation of renewable energy.
He observed that public-private partnerships (PPP) have been enhanced in Kenya and urged independent power producers to partner with the government in investing in the energy sector.
Not to be ignored is the fact that the region’s collective huge renewable energy potential is yet to be fully exploited even as countries indicate growth in various renewable energy forms. This was revealed in the East African Community (EAC) Renewable Energy and Energy Efficiency Status Report, conducted by the Renewable Energy Policy Network for the 21st Century (REN21) in 2016.
The report shows that the region accounts for nearly half of all sales of ‘pico’ solar systems (small, portable photovoltaic systems) in Africa, and Kenya and Tanzania are among the continent’s top markets for solar lighting products.
Moreover, the report, which was compiled with support from the UN Industrial Development Organisation (UNIDO) shows that renewables account for 64 percent of energy use in Kenya, Uganda, Tanzania, Rwanda and Burundi.
In terms of energy mix, the East African Community (EAC) Renewable Energy and Energy Efficiency Status Report, indicates that in 2015, the EAC region’s installed grid-connected renewable energy capacity amounted to some three Gigawatts. This was mainly from geothermal, wind, solar and hydropower.
As if in concurrence with participants in the SERC-RES4Africa conference, the report cited national specific renewable energy policies and instruments as part of the factors enhancing exploitation of the region’s renewable energy potential. Already, Kenya, Rwanda, Tanzania and Uganda have each introduced feed-in tariff (FIT) policies and adopted innovative zero-VAT and tariff policies on solar products.
Lebbi Changullah, Secretary General of EAPP, which covers Kenya, Uganda, Tanzania, Rwanda, Burundi Democratic Republic of Congo, Djibouti and Sudan and Libya, said they have managed to interconnect national grid systems. The power pool is also carrying out regional projects, for example connecting Kenya to Uganda and Uganda to Rwanda.
Changullah added that the power pool is scaling up programmes for power trade. “We’re also setting a regulatory code to govern power trade,” he said and the EAPP also intends to conduct a study aimed at analyzing the impact of interconnections.
At the same time, he urged power utilities to pitch for the funding of renewable energy projects on the ground that they are environmentally friendly. In this context, he said EAPP is involved in discussions with stakeholders including donors and a donor trust fund is being established under the World Bank.
He revealed that the World Bank has also commissioned a study that seeks to identify areas in the region where different forms of renewable energy can be generated.
However, Changullah is cautious about the issue of the market for the electricity being generated. “There is a need to assess the demand in the region for there is a need for the market to absorb surplus power generated,” he said, giving the example of Ethiopia whose demand is 2000 MW per year and is investing in a 9000MW project.
Carlo Papa, Director of the Enel Foundation, a non-for-profit organisation that carries out studies and research activities and training initiatives on energy, talked of the need to build capacity in terms of personnel training. “Renewable energy harnessing, like any aspect of sustainable development, cannot be achieved without skilled human resources,” said Papa.
RES4Africa, working with Strathmore University and other partners, has already established a Micro Grid Academy (MGA), a regional training project targeting 300 students from East Africa.
Meanwhile, as efforts are made to ensure the availability of human resource, Murungi Ndirangu, Director of the Nairobi Global Centre at Columbia University, noted that women experts are few in the renewable energy sector. “Socio-cultural barriers and labour market expectations have undermined the presence of girls in the renewable energy careers,” she said.
Mackay Okure, a capacity-building and research and development expert at EACREEE and an Associate Professor at Makerere University, said that the MGA is creating economy of scale and contributing to economies of scale and a sustainable energy market in the region.
Riccardo Bicciato, local partner at Bonelli Erede Cairo, a major international law firm with an Africa presence in Cairo and Addis Ababa fostering foreign investment in Eastern Africa with a focus on renewable energy, said a key constraint to renewable growth in the region is access to financing, although “access to financing can be ensured through a sounded financial de-risking strategy and a careful bankability analysis and mitigation.”
Bicciato noted that Bonelli Erede is providing training in various countries on legal matters which provide decision-makers with the viewpoint of the private sector in order to stimulate investment opportunities in the sector.
But despite most participants pitching for PPP as a solution to financing constraints, Bicciato had a different view. Speaking about financial risk in renewable energy investments in East Africa, he told IDN that the ideal option for funding renewable energy projects is project financing. The model relies on repayment of loans from the project’s cash flow with limited recourse to project sponsors.
He noted that Africa is a land of opportunity and there is huge willingness across the board to develop the economy through renewable energy programmes.
According to Bicciato, renewable energy investments should be well thought out with both short and long term goals set out. “Each country has its own peculiarities and risks. It is essential for a project sponsor to clearly identify and mitigate the project risks before implementing the projects instead of addressing them in piecemeal,” he warned. [IDN-InDepthNews – 29 January 2018]
Image: RES4Africa promotes the deployment of large-scale and decentralized renewable energy solutions in Sub-Saharan African markets to meet local energy needs for growth. Credit: RES4Africa