The challenge of electrification and the difficult expansion of traditional centralised electric diagrams.
In this context, African electricity operators have limited resources that they pour into exploitation and maintenance of existing systems, without being able to afford to invest in their development.
Total electricity production capacity for all Sub-Saharan countries (except South Africa) was limited to 34GW in 2010, the same level as Poland (France produced 120GW). Although this capacity has increased two fold since 1980, the population of these countries has also doubled over the same period [i]: in population terms, available electrical energy capacity has been stagnant for more than thirty years.
To support demographic growth, economic development across the continent and to respond to the corresponding increase in demand, the United Nations estimate that an additional 7GW of electrical energy capacity needs to be set up every year. This would equate to an annual investment in the current electricity systems of $41 billion, or more than 6% of the continent’s GDP [ii].
Developing electrical systems according to traditional centralised production diagrams, and extending the existing network would therefore require considerable resources that African suppliers can hardly sustain.
At the same time, private investments remain bound by African electricity market organisational patterns. The majority of markets are built around a national energy supplier that covers the complete value chain, and are not very advanced in terms of deregulation (separation of activities along the value chain, opening of markets to competition etc) and by consequence these suppliers are often in a situation of complete monopoly.
Political and/or legal uncertainties also weigh heavily on investment decisions as these require important resources and visibility over several years if not decades. A study by the University of Cape Town in 2010 reviewed all centralised electrical production unit projects set up by private operators: of the 21 projects examined in 8 African countries, half had been the object of contractual disputes (revision of originally negotiated conditions, notably on the rates charged for purchasing electricity or the cost of fuel supplies, as well as payment difficulties…) [iii].
Status of independent centralised production units in Africa (capacity > 40MW) [iii]
* BOO : build-own-operate / BOOT = build-own-operate-transfer
A future for off-grid electricity production systems, with particular emphasise given to solar energy
In the face of traditional electricity network expansion, developing decentralised, off-grid production methods or ones organised around a local “mini-grid” offer an interesting alternative for African countries. These represent a change of tactic that could be a real solution for the future as well as being, not only pertinent given the continents resources, but also economically viable.
Given the extensive sunshine the continent receives, solar energy is a promising solution. A European Commission study showed that electricity production through photovoltaic panels is more competitive than using a power generator for many parts of rural Africa. [iv].
With sunshine reaching 2 000 to 2 500 kWh per m² per year (this compares to an average 1 300 kWh in France and 1 800 kWh in Provence), solar energy is effectively more profitable in a large number of areas (yellow and red on the map). Energy produced by generators still depends on road infrastructure for diesel fuel supplies whose costs are constantly on the rise.
Comparative profitability of solar and generator produced electricity in Africa [iv]
(NB: generator costs include state subventions on diesel fuel)
With 60% of Sub-Saharan populations living in rural zones that either have little or no access to existing electrical networks, and with few perspectives for medium term expansion, the deployment of competitive off-grid electricity production solutions represents a considerable market.
It is also and above all an essential axis for development for Sub-Saharan Africa. In order to facilitate access to electricity in rural areas, the majority of African countries has adapted their regulations and has set up specific measures, in particular through funds or agencies for rural electrification, often supported by western development banks and agencies (AFD in France, KfW in Germany…).
Aurélien Boiteau, Senior Manager