How policy intervention can grow renewable energy in West Africa

A study conducted by Samuel Gyamfi and his colleagues in the Department of Energy and Environmental Engineering of the University of Energy and Natural Resources (UENR), found that Ghana has an estimated additional hydro power potential of 2,000MW.

It also found that the country has approximately 413 sq. km area with good-to-excellent wind resources which could support a little over 2,000MW of wind power development and if moderate-to-excellent wind resources were included, it could go up to 5,640MW.

If a similar study were conducted in Nigeria and the other 16 West African countries, the results will differ only negligibly. The West African sub-region is endowed with natural resources that can be used to bridge the energy gap that sees millions go to sleep every night without power.

However, government policies in these countries require a fundamental re-tweaking to deliver value to West Africa’s 360 million people. In large measure, these governments have demonstrated a keen desire to improve renewable energy use, but these efforts have not been backed by the right policy initiatives.

A recent compilation by the Climate Reality Project listed 11 countries who are leading in the shift to renewable energy. A careful examination revealed that the key to success is deliberate policy backed pragmatic actions to take advantage of the natural resources that the country has relative advantage.

According to the Climate Reality Project, when leaders actively set ambitious goals for renewable energy generation and support them with investments growth becomes an inevitability and comes at accelerated pace. Also, there is no one-size fits-all solution to making the switch. Some countries like Kenya, have ample geothermal and can ramp up fast. Others, like Denmark, have been steadily improving their wind power generation for decades. Still others, like Morocco, are betting big on solar while planning for backup from other renewables.

Impact of the right policy mix

In December 2015, 175 countries and parties officially signed the Paris Agreement marking a critical moment in the fight to end climate change. Many countries including those in Africa have ratified this agreement including Nigeria and Ghana. To have any real impact, deliberate policy framework has to be created to support the intention.

Sweden presents the best model to follow in curbing carbon emission and achieving growth in renewable energy. In the 1970s, the country oil accounted for more than 75 per cent of Swedish energy supplies; today, the figure is around 20 per cent, basically due to the declining use of oil for residential heating.

Swedish carbon emissions are low compared with those of other countries. According to the latest statistics from the International Energy Agency (IEA), the average Swede releases 4.25 tonnes of carbon dioxide (CO₂) per year into the atmosphere, compared with the EU average of 6.91 tonnes and the US average of 16.15 tonnes.

A critical action that West African governments can adopt is setting a target to achieve energy mix through both fossil fuels and renewables. Through deliberate policy, governments can encourage investments in the sector by pragmatic action. In Nigeria the duty on batteries is 20 percent, merely reducing the duty or abolishing it entirely will bring down the cost of installing solar energy infrastructure by 50 percent.

“Batteries are the more expensive component of every solar installation but batteries attract 20 percent custom duties, while solar panel is 5 percent. If energy is critical to the nation why don’t we make it all zero percent? This is further going to drop down the cost of deployment,” said Sulaiman Yusuf, Chief Executive, Blue Camel Energy.

Sweden has successfully increased capacity in renewable energy by a policy to conserve energy. In 2005, the country introduced a special five-year programme designed to boost energy efficiency in industry. Under the programme, about 180 power-intensive industries taking part were granted tax relief in exchange for drawing up energy plans and taking steps to reduce energy use. When it ended in 2009, the programme had yielded energy savings of about 1.45 TWh per year at a value of about $59.4 million.

To pursue energy conservation in West Africa, a clear timeline has to be set along with measurable goals. Currently there is no LED bulb manufacturing plant and none of the governments have a creative plan to conserve energy. Energy saving bulbs are imported into West African countries from Europe and China and even then there is no policy that will discard the use of incandescent lightening.

The Swedish government also created a policy to encourage green investing in the country and through policy the government made it easy for those who produce excess renewable energy to resell. Most African countries have no such policy rather they put hoops so high in front of investors through antiquated, protectionist policies that drive out investments. In Nigeria, there is no feed-in tariff mechanism to resell excess energy and corporations who built their own renewable energy are barred from selling the excess power asking them to register as energy producer.

Meanwhile, the business case for solar photovoltaics (PV) in Africa is stronger than ever due to rapidly declining technology costs, according to a report released by the International Renewable Energy Agency (IRENA).

Titled “Solar PV in Africa: Costs and Markets,” the report estimates that installed costs for power generated by utility-scale solar PV projects in Africa have decreased as much as 61 per cent since 2012. Today, installed costs for these projects are as low as $1.30 per watt in Africa, compared to the global average of $1.80 per watt.

“In recent years, solar PV costs have dropped dramatically and will continue to do so with further declines of up to 59 per cent possible in the next ten years,” said Adnan Z. Amin IRENA Director-General.

He further said, “These cost reductions, coupled with vast solar potential on the continent, present a huge opportunity for Africa. Both grid-connected and off-grid solar PV now offers a cost-competitive means to meet rising energy needs and bring electricity to the 600 million Africans who currently lack access.”

Mini-grids utilising solar PV and off-grid solar home systems also provide higher quality energy services at the same or lower costs than the alternatives, finds the report. Hence there is no better time to re-examine the impact of policy on renewable energy in West Africa.

ISAAC ANYAOGU