Time to align investment with modern alternative energy sources for West Africa
Across the West Africa sub-region, talks around the power sector remains key because the sector is a critical driver of growth and development across the region.
It is not far-fetched to decipher that in order to ensure that the power industry reaches its full potential and address the energy needs of citizens, it is necessary for businesses and producers to keep up to date with a rapidly changing landscape.
A cursory look at the sector indicate that globally, the focus for countries is how to go green by investing in low-carbon technologies no thanks to the commitments made at the COP 21 United Nations Climate Change Conference two years back.
Industry professionals who understand the power sector workings are of the opinion that as low-carbon technologies and green energy continue to become more commonplace, it is important that West Africa Businesses realign their investments to accommodate these modern trends.
They observed that renewable energy solutions in solar and wind in particular have increased markedly due to the falling cost of these technologies making them competitive. Similarly, with the low cost of gas more latterly compared to several years ago.
According to them, “Connecting renewable energy onto the grid is becoming more affordable as a result of the abundant natural resources such as great solar irradiation and wind resource in West Africa”
To them, while West Africa has typically lagged behind developed markets in the uptake of renewable energy, this will become a feature of the past as appetite for renewable energy increases.
Report shows that a critical part of the uptake of renewable energy is the use of an auction tariff regime as opposed to a feed-in tariff. The move has worked well for the country and resulted in the cost of tariffs falling, which is beneficial to consumers. There are similar initiatives in many other markets globally, including in Africa.
West African countries according to reports have endured challenges in the past with providing their citizens with electricity as millions of people across the region remains without power.
Analysts argue that another alternative investment that can shape the power sector positively in the region is the decentralisation of renewable energy arguing that if government in the region embraced the shift and invest in the space, it will yield good returns.
According to them, “Distributed generation has the ability to bring more citizens into the energy fold through the building of smaller power stations at specific load centres, rather than building bigger, centralised stations that need to transmit power long distance”.
To them, “the introduction of multiple, smaller grids can substantially assist in transmitting power to where it is needed, bringing down the number of people without electricity”
Industry watchers opine that owing to the supply-demand gap in power in the West African region, there will continue to be a large number of power projects being developed in the region. The political and economic climate across the continent has steadily improved over the last 2 decades or longer, making West Africa a strong investment case for international developers.
KELECHI EWUZIE