The Transformation of Africa’s Energy Sector

To meet the development needs of a growing population, Africa’s electricity sector requires a major transformation.

Despite important changes over the past decade, efforts to expand and modernize the sector need to be redoubled.  Indeed, current electrification rates, generation-capacity levels, and security-of-supply indicators underscore that much is yet to be accomplished.

New research, co-authored at the UC Berkeley Goldman School of Public Policy, identifies five sets of complementary actions to put Africa’s electricity sector on track to sharply increase electrification rates and secure long-term access to affordable and cleaner energy. The research — “An action agenda for Africa's electricity sector” — was published Aug. 5, 2021 in the journal Science.

"Investment in, and integration of, clean energy across Africa can enable the full suite of the UN’s Sustainable Development Goals (SDG) and make the energy future of the continent one that enables equity and climate justice,” says Goldman School co-author Daniel M. Kammen, the James and Katherine Lau Distinguished Professor of Sustainability, chair of the Energy and Resources Group and professor of nuclear engineering. “But there is a need for international support and partnerships to ensure funding and investment in information systems required to make this happen.” 

"Africa’s development needs are as diverse as the countries in the continent,” says lead author Daniel Puig, a senior advisor at UNEP DTU Partnership, an integral part of the Technical University of Denmark’s Department of Technology, Management and Economics. “Yet, none of those needs will be met unless a reliable supply of affordable electricity, generated through clean fuels, is available to all.  In this article, we describe five no-regrets actions to transform Africa’s electricity sector" 

The five recommendations are as follows:

• Introduction of a combination of supply-side incentives and demand-side subsidies, to help expand electricity markets.
• Digitalization of energy sector planning and management tools, to help deliver energy at the right time, in the right place, at the lowest cost.
• Integration of local-content requirements in renewable-energy policies, to capture employment benefits and ensure that state-of-the-art technologies are fully adopted by African countries.
• Strengthening and expansion of regional power pools through African-led international partnerships, to expand electricity access and reduce electricity bills.
• Expansion of investments in off-grid and interconnected clean-energy mini-grids, to account for the different socio-economic realities across urban, peri-urban and rural areas.

"All countries struggle to meet three goals: security of reliable and affordable energy supplies, universal access to modern forms of energy, and reduction of polluting emissions.  Africa’s development problems magnify the challenges associated with achieving these goals.  What’s important to remember is that, for African and all other countries alike, these three goals cannot be achieved in isolation from one another,” says co-author Magda Moner-Girona, of the European Commission Joint Research Centre.

An essential SDG

Achieving universal access to clean and affordable energy, as outlined in Sustainable Development Goal 7, is a precondition for reaching most of the other 16 SDGs. Access to energy positively affects everything from health, the fight against poverty, pollution, opportunities for education and climate action.

Though rural electrification has seen significant progress, at least 250 million people in Africa still live without electricity.  Because of the COVID-19 global health pandemic, an additional 80 million people on the continent have fallen into extreme poverty.

"Africa's electricity sector has to undergo a profound transformation, with the twin objective of addressing electricity access and security of supply in ways that are compatible with a healthy climate. In this paper, we offer some concrete suggestions for policies that can get us there," says co-author Yacob Mulugetta, professor of Energy and Development Policy at University College London.

An independent champion

The article notes the difficulties associated with achieving an endeavour of such a magnitude. Power, agency and politics play out in ways that are not necessarily conducive to meeting key societal goals related to environmental quality, employment, and equity.

Specifically the article lists incumbents in the energy sector resisting change, information asymmetries among different stakeholders invariably punishing prospective new entrants in the energy sector, and priorities and procedures on the part of bilateral and multilateral lenders that are unduly rigid.

The authors conclude that an independent entity is needed to champion a transformative expansion and modernization process for Africa's electricity sector – a process that is not captured by short-term agendas or the interests of any one individual stakeholder group.

"The time is right. Earlier this year, the African Single Electricity Market was launched. We need to capitalize on the opportunities it offers to leapfrog to an electricity sector for the future.  Africa has the energy endowment to do so and the technologies are there.  As we write in the article, leadership has to be up to the mark”, says Dr. Yohannes Hailu, a United Nations Economic Commission for Africa’ Economic Affairs Officer.