Africa’s Energy Sector is Being Transformed

Africa’s power sector needs to undergo a massive overhaul in order to meet the development needs of a growing population.

Despite significant developments in the industry over the last decade, efforts to expand and modernise it must be redoubled. Current electrification rates, generation capacity levels, and security-of-supply indicators all show that there is still a lot of work to be done.

A new study co-authored by the UC Berkeley Goldman School of Public Policy identifies five sets of complementary activities that can help Africa’s power industry achieve dramatically higher electrification rates and assure long-term access to inexpensive and greener energy.

Clean energy investment and integration across Africa can help the continent achieve all of the UN’s Sustainable Development Goals (SDGs) and ensure that the continent’s energy future is one of fairness and climate justice. However, international cooperation and alliances are required to secure the necessary funding and investment in information systems.

Africa’s development requirements are as diverse as its countries. None of these needs, however, will be addressed until everyone has access to a reliable supply of affordable electricity supplied from clean fuels. The new findings suggested five actions to bring about the desired transformation in Africa’s electricity sector.       

To begin, a combination of supply-side incentives and demand-side subsidies will be implemented to assist in the expansion of power markets.

Energy sector planning and management systems should be digitalized to help deliver energy at the right time, in the right place, and at the lowest cost.

Integration of local-content standards into renewable-energy programmes to capture job advantages and ensure that African countries fully adopt cutting-edge technologies.

To extend electricity access and lower electricity prices, African-led international partnerships are strengthening and expanding regional power pools.

Increased investment in off-grid and interconnected clean-energy mini-grids to accommodate for the socio-economic realities of urban, peri-urban, and rural areas.

All governments are attempting to achieve three objectives: the security of reliable and affordable energy supply, universal access to contemporary forms of energy, and pollution reduction. The difficulties of fulfilling these aims are amplified by Africa’s development problems. It’s crucial to realise that these three goals cannot be attained in isolation for African or other countries.

Most of the other 16 SDGs are dependent on achieving universal access to clean and affordable energy, as outlined in Sustainable Development Goal 7. Energy access has a positive impact on everything from health to poverty reduction, pollution reduction, educational possibilities, and climate action.

Despite substantial advances in rural electrification, at least 250 million people in Africa still lack access to power. An additional 80 million people on the continent have fallen into extreme poverty as a result of the COVID-19 global health pandemic.

Power, agency, and politics all play out in ways that aren’t always favourable to achieving important societal goals like environmental quality, employment, and equity.

The paper identifies incumbents in the energy sector who are resistant to change, information gaps between different stakeholders that usually penalise potential new entrants in the energy sector, and excessively inflexible priorities and procedures on the side of bilateral and multilateral lenders. To support a transformative expansion and modernization process for Africa’s power industry, an independent body is required — one that is not constrained by short-term goals or the interests of any single stakeholder group.

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