Current Status of Electricity in Africa
Africa currently has a population of about 1.3 billion people, 62% of whom have no access to electricity, per capita energy consumption is the lowest in the world, and there is a huge difference between economically developed cities and rural areas. According to the International Energy Agency (IEA), from 2000 to 2015, 212 million people in sub-Saharan Africa had access to electricity. Although the development of electricity in Africa has made great progress in recent years, the continent is still struggling to meet the energy needs of its growing population. An IEA energy report predicts that Africa will further electrify: in 2030, the proportion of people without access to electricity will drop to 36%. However, although the proportion has decreased, the total number of people without electricity will continue to increase due to the surge in population.
Due to the rapid increase in population and economic activities, the energy demand for electricity and transportation is becoming stronger and stronger. In order to meet this increasing demand for electricity, Africa urgently needs to increase infrastructure investment in the power industry. To meet this energy demand, it must be 2030 The installed power capacity of the year doubled on the current basis. Therefore, the IEA predicts that the installed capacity will reach 497GW in 2030.
Benefiting from the development of global renewable energy, Africa has gone beyond fossil fuels to directly use clean energy. The ever-decreasing price of solar panels and high-intensity sunlight are conducive to the development of the photovoltaic industry in Africa, and African countries have promoted the development of local renewable energy by reducing import tariffs, increasing legislation, and developing distributed photovoltaics.
Although Africa has made some progress in energy development, it cannot be ignored that apart from technological backwardness and economic obstacles, there are still some structural problems in Africa. For example, local people are very dependent on government subsidies for fossil fuels and public utilities are economically vulnerable. , Backward power grid and unstable policy environment, which will increase investment risk.
The research reports of the International Energy Agency (IEA) and the Finnish Lappeenranta University of Technology (LUT) both predict the energy structure of Africa. From the predicted values of the two, it can be found that as the total power generation increases each year, photovoltaic power generation The amount is also increasing. LUT University believes that the electrification of energy promotes the continuous growth of power generation, and the electrification of energy promotes the development of clean energy. Among them, the increase in the proportion of photovoltaic power generation has both economic and environmental factors. Good economic benefits.
As the cost of renewable energy continues to decrease, especially driven by some innovative business models and financing methods, renewable energy in Africa will usher in an unexpected development.
Introduction to the African Market in 2018
Although the PV market in Africa increased by 1.2GW in 2018, the installed capacity of PV in Africa reached 5.110GW at the end of 2018, which accounted for only 0.7% of the global PV market. Compared with other regions in the world, its PV share is still small. The International Renewable Energy Agency (IRENA) predicts that Africa’s photovoltaic installed capacity will reach 16.9GW in 2020, 32GW in 2025, and 70GW in 2030.
The photovoltaic industry in Africa is mainly distributed in Egypt (600MW) in northern Africa, Morocco (606MW), Algeria (519MW) and Lesotho (79MW) and South Africa (1815MW) in southern Africa.
The development of the photovoltaic industry in Africa is firstly related to local policies. Each country has formulated different energy plans and photovoltaic development goals. As the price of photovoltaic cells drops, policy influence may no longer be a key factor, and market competition will promote the overall development of the photovoltaic industry.
However, it should be noted that the PV installed capacity above is all predicted by the local government on the basis of previous years, and the future development is overestimated. The instability of African policies and the uncertainty of investment will affect In the development of photovoltaics in various countries, the projects that should have been launched as previously expected are still missing. Therefore, the goals of 3.4GW in West Africa and 8.0GW in North Africa in 2020 will be difficult to achieve. If this is the case, the goal of 16.9GW of photovoltaic installations for the entire African continent in 2020 will not be achieved. .
It was previously predicted that Africa’s annual installed capacity will be as high as 6.1GW before 2020, then will be reduced to 3GW until 2025, and then increased to 7.6GW annually. This change in growth rate may be caused by the government’s discontinuous policy, and The imperfect local power infrastructure will also restrict the development of photovoltaic projects.
Ranking of countries attracting investment in the photovoltaic industry
The economic development status, business environment, legal and political stability of each country can be used to define the country’s attractiveness to investors. Similarly, the research institution InterSolar evaluates the renewable energy policies, energy types, and per capita electricity consumption of various countries. Indicators and definition of the country’s attractiveness to the photovoltaic industry.
The more stable the political situation and economy of a country, the more attractive countries such as Botswana, Mauritius, Morocco, Rwanda and South Africa will be to the photovoltaic industry. Often these countries have formulated renewable energy development goals and started to advance the corresponding process. Other countries such as Ghana, Ivory Coast, Kenya, Tanzania and Uganda have also begun to implement the corresponding renewable energy policies. Although this will not promote foreign investors to carry out commercial activities, but less investment, more returns.
Countries with unstable political situation are the worst for developing the photovoltaic industry, and South Sudan is the most unfortunate example. Since independence in 2011, South Sudan has been plunged into a civil war and caused a huge humanitarian crisis. Because photovoltaic power generation can improve people’s living standards, South Sudan has begun to apply photovoltaic power generation to solve practical difficulties, such as heat preservation during vaccine transportation, water pump power supply, and hospital lighting in remote areas.
Africa’s unique domestic environment
Most African countries rely heavily on fossil fuels to generate electricity. Although the growing photovoltaics and other clean energy will compete with traditional fossil fuels, the habit of fossil fuel power generation will not easily change due to the high cost of clean energy. Although the international mainstream trend is toward energy conservation and emission reduction, it is predicted that the practice of subsidizing fossil fuels by African countries in the next few decades will not stop, although this will cause high emissions.
Energy subsidy policies will encourage people to consume fossil fuels in a disguised form. On the other hand, they will also increase government budgets and reduce the competitiveness of renewable energy.
Countries that subsidized fossil fuels in excess of US$1 billion in 2015 include Angola, Jamaica, Mozambique, Nigeria, South Africa, Tanzania and Zimbabwe. It is estimated that fossil fuel subsidies for the entire African region totaled US$7.5 billion in 2015. The figure below shows the amount of fossil fuel subsidies per capita in some countries in 2016 as calculated by the International Energy Agency.
North Africa and sub-Saharan Africa are the least electrified regions in the world, and the speed of electrification is slower than any region in the world. The electrification progress in sub-Saharan Africa increased from 23% in 2000 to 43% in 2017. However, the number of people lacking electricity continues to increase. According to the latest data, there are still about 602 million people in sub-Saharan Africa without electricity, which is 80 million more than the figure in 2000.
Despite the continuous expansion of the power grid in Africa, 80% of the power-deficient areas are located in remote areas, and it is difficult to connect to the public grid in a short period of time. To achieve the goal of renewable energy (SDGs) for all citizens in 2030, distributed photovoltaic energy A good solution to this problem.
The intensity of solar radiation in Africa is high, and the cost of photovoltaics continues to decrease. In addition, in order to promote the development of renewable energy, the local government provides subsidies to families under financial pressure and supports the installation of off-grid distributed photovoltaics. In the future, photovoltaics are expected to play an important role in the process of promoting electricity access for African people.
Business model of photovoltaic operation
5.1 M-KOPA mode
Founded in 2011, M-KOPA is Kenya’s leading off-grid electricity bill payment company and the same founder as M-PESA, the largest mobile bank in sub-Saharan Africa. With the increasing popularity of local smart phones, M-KOPA (M=mobile, KOPA= to borrow) combines mobile payment with GSM. They provide users with 8W solar panels, 3 LED lights, 1 portable rechargeable flashlight, 1 household USB with 5 ports, 1 rechargeable radio and 1 20W 16-inch digital TV. Consumers use mobile phones to pay monthly installments for the photovoltaic system. Once the consumers stop paying, the system will shut down, and after the consumers pay, the system will start running again. The price is basically the same as Uganda and Tanzania. The down payment is 30 US dollars and 60 US dollars, and the daily installment payment is 0.5 US dollars and 1 US dollars. The frequency and amount of payment depend on the consumer’s choice, but the payment must be completed within the agreed period (payment The period ranges from 380 days to 570 days).
The reason this model can prevail is that smartphones continue to penetrate locally, and local mobile phone companies directly associate payment services with mobile phone accounts without opening a bank account. Kenya, Namibia and South Africa are leading mobile payment technologies. Mobile payment is also very popular in Gabon, Ghana, Uganda, Zimbabwe, Rwanda and Tanzania. In other countries, mobile payment users are also blooming everywhere.
5.2 Urban electrification in Congo
The city of Manono in the Democratic Republic of Congo has approximately 50,000 residents and was powered by only one diesel generator until Group Forrest and the photovoltaic company ENERDEAL initiated an urban electrification project, including the creation of a photovoltaic project, and The 21-kilometer-long MV/LV transmission grid provides power to the city to promote the electrification of the city.
5.3 Photovoltaic with diesel generator
Most remote areas in Africa use diesel generators to generate electricity. Until recently, photovoltaics were considered a good complement to diesel generators, reducing energy consumption by 20% to 50%. Especially high oil prices and high freight (in some places far away from cities, the cost of oil is as high as $5 per gallon). The price reduction of batteries promoted the use of local storage batteries, the use of photovoltaic power generation, and the storage of excess electricity in storage batteries, this business model was promoted as a model in Madagascar.
5.4 International agencies assist the photovoltaic industry
Since 2018, the European Union, the German government, the United States Agency for International Development and the Nigerian government have cooperated with six photovoltaic microgrid pilot projects to help 15,000 people in Nigeria connect to electricity. These residents no longer rely on diesel generators. Photovoltaic power can be used for crop irrigation, cocoa Commercial activities such as dehydration, forging, woodworking, restaurants and hotels.
5.5 Desert Project
The desert plan was originally proposed by Trans-Mediterranean Renewable Energy Corporation. It is necessary to use photovoltaic power generation on a large scale in desert areas and use high-voltage lines to transport them to consumption areas.
However, this plan is still immature. The cost of solar panels and the emergence of new photovoltaic project models make this “desert plan” possible, which will greatly promote the development of the photovoltaic industry and output low-cost, pollution-free electricity.
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