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<p>Shining like the sun, that’s one of Africa’s newest renewable energy projects. 2 hours’ drive from the small town of Upington in the Northern Cape lies a solar plant, one of many green energy projects that will one day feed the national grid.</p>


This small SA town is big on renewables, here’s why

<figure><img decoding="async" src="https://images.theconversation.com/files/209061/original/file-20180306-146650-1kgus7y.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="File 20180306 146650 1kgus7y.jpg?ixlib=rb 1.1" /><figcaption>Millions of people without electricity access in Africa live close to existing power grid infrastructure.<br />
<span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure>
<p><a href="https://theconversation.com/profiles/rebekah-shirley-440192">Rebekah Shirley</a>, <em><a href="http://theconversation.com/institutions/strathmore-university-2081">Strathmore University</a></em></p>
<p>At least 110 million of the 600 million people still living without access to electricity in Africa live in urban areas. Most are within a stone throw from existing power grid infrastructure.</p>
<p>In Nigeria, Tanzania, Ghana and Liberia alone there are <a href="http://www.cgdev.org/blog/shedding-new-light-grid-debate-power-africa-countries">up to</a> 95 million people living in urban areas. All in close proximity to the grid. In Kenya about <a href="https://energyathaas.wordpress.com/2013/07/15/power-africa-observations-from-kenya/">70%</a> of off-grid homes are located within 1.2km of a power line. And estimates for “under-the-grid” populations across sub-Saharan Africa range from <a href="http://documents.worldbank.org/curated/en/348741492463112162/pdf/114375-REVISED-4-18-PMWB-AfricasPulse-Sping2017-vol15-ENGLISH-FINAL-web.pdf">61% to 78%</a>.</p>
<p>Besides energy access being crucial for many basic human needs, these underserved populations represent a massive commercial opportunity for <a href="https://www.greentechmedia.com/articles/read/how-deregulation-could-improve-reliability-for-african-utilities">cash-strapped</a> sub-Saharan African utilities. Electricity providers could reach tens of millions of densely packed customers without the cost of a last-mile rural grid extension.</p>
<p>So, why aren’t these potential consumers connected to the formal grid?</p>
<p>Urban communities often face many challenges in obtaining electricity access. These range from the prohibitively high cost of a connection, to the challenges of informal housing, the impact of power theft on services and socio-political marginalisation. In many cases, these obstacles are difficult to address successfully.</p>
<p>However, recent advances in distributed renewable energy technologies mean a more affordable, faster to deploy, cleaner alternative is at hand in Africa. One that can step in where policy and utility reforms are wanting.</p>
<h2>Barriers to grid connections</h2>
<p>One of the major barriers to electrification is the cost of a grid connection. A grid connection in Kenya, for instance, is estimated at <a href="http://dil.berkeley.edu/electrification-for-under-grid-households-in-rural-kenya-five-questions-for-ken-lee/">USD<br />
$ 400 per household</a>. This is nearly one-third of the average per capita <a href="https://tradingeconomics.com/kenya/gdp-per-capita">income</a> of a Kenyan.</p>
<p>Beyond pure cost barriers, urban communities often can’t access energy services for <a href="https://www.nature.com/articles/nclimate2512?WT.ec_id=NCLIMATE-201504&amp;spMailingID=48302515&amp;spUserID=ODkwMTM2NjQyMAS2&amp;spJobID=643211240&amp;spReportId=NjQzMjExMjQwS0">other</a> socio-economic reasons. For instance, not being metered because they <a href="https://www.economist.com/news/middle-east-and-africa/21721141-making-slums-less-exploitative-may-be-africas-biggest-challenge-exploitation-and">don’t have</a> a formal address. Or living in in an area that is difficult to service – such as near flood plains or in informal housing settlements.</p>
<p>Corruption among electricity service providers, power theft by customers and the establishment of electricity cartels also complicates and limits electricity access.</p>
<p>Finally, the utilities themselves face many challenges in implementing reforms to get more people connected. Take the example of the Kenya Power and Lighting Company, which owns and operates most of the electricity transmission and distribution system. In 2015 it introduced a subsidised connection fee of US $150. This was done through the <a href="http://www.kplc.co.ke/content/item/1120/last-mile-connectivity">Last Mile Connectivity Project</a>. In one year, this installment-based payment plan led to a <a href="http://www.worldbank.org/en/news/feature/2015/08/17/bringing-electricity-to-kenyas-slums-hard-lessons-lead-to-great-gains">30-fold increase</a> in legal electricity connections in impoverished neighbourhoods.</p>
<p>But the project was <a href="https://www.nation.co.ke/lifestyle/smartcompany/1226-3483888-miyytdz/">marred</a> by cost overruns and inflated and misreported new connection numbers. On top of this, newly connected households often have very low consumption levels and low-income customers were often unable to make payments, even at subsidised rates.</p>
<p>Without the necessary infrastructural development, experts <a href="https://www.standardmedia.co.ke/business/article/2001233193/shocking-kenya-power-details-of-fake-meter-activations-to-please-president-uhuru">argue</a> that the program puts a strain on the technical, commercial and financial resources of the utility. This means that the programme may find it difficult to generate revenue, recover costs or provide the service intended to new customers.</p>
<h2>Decentralised renewables</h2>
<p>Decentralised renewable energy technologies offer an <a href="https://theconversation.com/what-senegal-needs-to-do-to-close-its-energy-gap-by-2030-88575">important solution</a> for “under-the-grid” electrification. They are simple, fast and agile. They have short installation times, and offer a reliable electricity service for informal settlements.</p>
<p>Pay-as-you-go solar systems and appliances, for example, <a href="http://www.wri.org/publication/stimulating-pay-you-go-energy-access-kenya-and-tanzania-role-development-finance">can provide</a> a much lower barrier to entry. Compared to the high upfront connection costs noted earlier in Kenya, a 15-watt solar home system costs <a href="http://www.wri.org/publication/stimulating-pay-you-go-energy-access-kenya-and-tanzania-role-development-finance">on average</a> USD $9 per month for 36 months after which point the household owns its system.</p>
<p>The renewable energy sector recognises this under-the-grid market. In fact, <a href="https://www.kenyacic.org/sites/default/files/publications/KCIC%20Solar%20Survey-3.pdf">about 35%</a> of solar lighting product sales in Kenya are made in peri-urban areas. And it’s a good bet. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2889673">Evidence</a> shows that the willingness to pay for decentralised renewables is much higher than a grid connection because they are seen as more reliable.</p>
<p><a href="https://static1.squarespace.com/static/532f79fae4b07e365baf1c64/t/58e3f73ce4fcb5a3a0989855/1491334979777/Decentralized-Renewables-From-Promise-to-Progress-March-2017.pdf">Policies to support</a> decentralised technologies include: integrated energy planning that incorporates these solutions, adopting and enforcing product quality control standards and providing financial incentives – like reduced import duties for products or local loan and grant programs.</p>
<p>These solutions show that with the right approach, and simple innovations, Africa’s prospective urban customers can finally get access to electricity.</p>
<p><img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/92211/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><em>Ben Attia, a Research Consultant with Greentech Media, contributed to the writing of this article</em></p>
<p><a href="https://theconversation.com/profiles/rebekah-shirley-440192">Rebekah Shirley</a>, Research Director at Power for All and Visiting Research Scholar, <em><a href="http://theconversation.com/institutions/strathmore-university-2081">Strathmore University</a></em></p>
<p>This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/millions-of-urban-africans-still-dont-have-electricity-heres-what-can-be-done-92211">original article</a>.</p>


Millions of urban Africans still don’t have electricity: this is how to fix the problem…

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<p>Energy Minister Jeff Radebe is finally going ahead with the signing of 27 renewable energy power projects after the North Gauteng High Court&#8217;s dismissal of a court bid by the National Union of Metalworkers and Transform RSA to block the projects.</p>


Energy minister to finally sign 27 renewable energy power projects

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<p>CNBC Africa reporter Lubabalo Mashiqana is joined by the president of TransformSA, Adil Nchabeleng to get his views on the IPP case currently being heard at the North Guateng High court.</p>


Why TransformSA is opposed to Eskom’s IPP deals

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<p>The National Union of Metalworkers of South Africa has made its representations at the North Guateng High court, following an urgent interdict to stop government and Eskom from signing contracts with 27 IPPs.</p>


NUMSA outlines position on renewable energy

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<p>The AECF and  Swedish International Development Agency have signed a US$48 million agreement to fund Renewable Energy. Victor Ndiege, Portfolio Manager at AECF joins CNBC Africa for more on the agreement.</p>


SIDA, AECF to fund SMEs in renewable energy

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<p>France&#8217;s Consular General to Nigeria says France is interested in other sectors of Nigeria’s economy besides oil and is setting its sights on Nigeria&#8217;s renewable energy space.</p>


Nigeria, France seek ways to increase trade

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<p>Nigeria’s Vice President Osinbanjo has urged oil majors to invest in renewable energy to reduce the country’s dependence on crude oil. The country is targeting an energy mix with renewable energy of 30 per cent of the gross energy produced by 2030.</p>


Can Nigeria achieve its renewable energy potential?

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<p>Energy availability and affordability remains a top priority Rwanda with 8 per cent year on year demand growth. Davide Bonsignore, COO &#038; Founder of OffGridBox unpacks their role in ensuring clean water and renewable energy in rural Rwanda.</p>


OffGridBox aims to provide clean water, power in rural Rwanda

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<p>Rwanda hosts Renewable Energy for Sustainable Growth conference in a bid to showcase technology with an aim to scale up renewable energy, CNBC Africa spoke to Ivan Twagirashema, Chief Executive Officer at Ngali Holdings.</p>


Renewable energy players meet in Kigali

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<p>Nigeria&#8217;s minister of Finance, Kemi Adeosun has asked the World Bank and International Monetary Fund to scale up provision and access to renewable energy in Nigeria in order to deliver development results and meet global climate goals.</p>


Investing in Nigeria’s energy mix

<p data-reactid="39">Mozambique offered a portfolio of small renewable energy projects to foreign investors on Tuesday which it hopes will attract $500 million in investment and give everyone in the southern African country electricity by 2030.</p>
<p data-reactid="40">Around 60 percent of people living in Mozambique, which is highly indebted, have no access to electricity.</p>
<p data-reactid="41">“The initiative is intended to ensure that within a 15 year horizon the Mozambican population has access to electricity outside the national power grid, thanks to small autonomous systems,” the Ministry of Mineral Resources and Energy said.</p>
<p data-reactid="42">It plans to do this by providing electricity to some 332 villages around the country using hydro and solar power.</p>
<p data-reactid="43">The portfolio has identified potential sites for projects using solar, hydro or a combination and could attract an estimated investment of $500 million, it said</p>
<div class="Attribution_attribution_o4ojT" data-reactid="44">
<p class="Attribution_content_27_rw" data-reactid="45">Reporting by Manuel Mucari; editing by Alexander Smith</p>
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Mozambique hopes to raise $500MN for renewable energy projects

<p><strong><em>Bhavtik Vallabhjee| Barclays Africa</em></strong></p>
<p>Africa’s power and energy sector is a critical driver of growth and development across the continent – so in order to ensure that the industry reaches its full potential and addresses the energy needs of citizens, it is necessary for businesses and producers to keep up to date with a rapidly changing landscape.</p>
<p>In this way, we have identified five key trends that will impact on the way that people live and work:</p>
<ol>
<li><strong>Coal power plants and projects are becoming more difficult to finance as there is a greater move towards investment in low-carbon technologies and green energy </strong></li>
</ol>
<p>More countries and companies worldwide are focusing on going green and investing in low-carbon technologies – a move that became more pronounced following the commitments made at the COP 21 United Nations Climate Change Conference in late 2015.</p>
<p>Appetite for coal projects is declining globally, but the trend is particularly noticeable and growing in OECD (the Organisation for Economic Co-operation and Development) member states. Organisations headquartered in some of these countries have  largely exited investing in of coal power plants , making public statements that they are focusing more intensively on low-carbon tech. China, too, is starting to make strides in the move away from its reliance on coal plants towards cleaner energy.</p>
<p>As low-carbon technologies and green energy continue to become more commonplace, financing coal power plants will become increasingly difficult. Similarly the pool of potential suitors to acquire such assets in mergers and acquisitions (M&amp;As) deals will also consequently shrink.</p>
<ol start="2">
<li><strong> The growing appetite for renewable energy in emerging markets</strong></li>
</ol>
<p>What’s more, there is a growing push from African countries such as Morocco, Senegal and South Africa, among others, to move from coal as feedstock to sources such as gas to fuel power plants. 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, (e.g. through the shale gas revolution in the USA) gas power plants have increasingly become more competitive compared to clean coal technologies. Connecting renewable energy onto the grid is becoming more affordable as Africa is blessed with abundant natural resources such as great solar irradiation and wind resource. E.g. the best solar sites  in the Northern Cape in South Africa, for example, receive over 2 500Kwh/ m2 hours of sunshine every year, with average solar radiation levels of between 4.5 and 6.5 kWh/m2 (kilowatts per metre squared per hour) every day. To put things in perspective, this is over two and a half times what Germany – a world leader in solar energy – receives, indicating the immense potential to tap the continent’s natural resources.</p>
<p>As such, it stands to reason that it is this dynamic that will ultimately impact on and alter the power landscape in Africa. While 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.</p>
<p>A critical part of the uptake of renewable energy is the use of an auction tariff regime as opposed to a feed-in tariff. South Africa already has the auction tariff system in place, as the country studied the best-of-breed practices in other markets globally before deciding to adopt a similar approach here in S.A.  . 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.</p>
<ol start="3">
<li><strong> The rise of battery storage</strong></li>
</ol>
<p>There has been massive investment in battery storage and research and development in the field by leading global companies such as Samsung, Tesla, Total and BYD in the past five years – and it is going to continue to gain momentum going forward, particularly when coupled with solar photovoltaic plants for storage of energy.</p>
<p>What will drive the growth of battery storage further is that the costs will drop substantially in the next three to five years.</p>
<ol start="4">
<li><strong> The power of distributed generation and the rise of smaller grids</strong></li>
</ol>
<p>It is well documented that African countries have endured challenges in the past with providing their citizens with electricity – more than 600 million people across the continent are still without power, illustrating that much still needs to be done in this space. It is my view that with the rise of trends like decentralized distributed generation, closing that gap will become more easily achievable.</p>
<p>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. This also assists in reducing transmission losses as power would not need to be evacuated over long distances. 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.</p>
<p>There are huge opportunities in the decentralisation of renewable energy and businesses and countries that embrace the shift and invest in the space will yield good returns.</p>
<ol start="5">
<li><strong> The long-term move towards integrated grids through increased investment in transmissions projects</strong></li>
</ol>
<p>In developed markets such as the US and Europe, many countries’ grids are linked or integrated to evacuate power from a country with a surplus to one that has a deficit and is in need of power. This is not the case in Africa, where there are very distinct regional power pools  – such as the northern, southern, eastern, western, and central  power pools  –  with very little overlap and integration between them.</p>
<p>Although investment in transmission projects to link grids is slowly increasing in prominence, with many examples of transmission projects in countries such Ethiopia, Kenya and Mozambique, it is a gradual development and an expensive exercise. It is for this reason that growth in this area will continue to be slow and developments will only be visible over the next decade or even longer. However, as transmissions projects serve as a pre-cursor to power generation, investment in this space is a necessity and, as such, will continue to occur.</p>
<p><strong>Conclusion:</strong></p>
<p>Due to the large supply-demand gap in power on the continent, 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 Africa a strong investment case for international developers. Despite the frustration of long lead times associated with developing infrastructure projects, on a risk-return adjusted basis, Africa still boasts far better returns than developed markets. Projects are generally well structured making the default rate on projects almost negligible. With its abundant natural resources for power (good solar radiation, wind, hydro and biomass potential, gas finds, amongst others), the energy landscape is changing – Africa will continue to be a compelling investment case.</p>


Five trends to watch in Africa’s energy and power sector

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<p>According to the President of the Renewable Energy Association of Nigeria, Segun Adaju, adoption of renewable energy in Nigeria will lead to an efficient source of power distribution in Nigeria.</p>


Developing Nigeria’s renewable energy

<p>There is no shortage of quality wind projects coming to market in Africa right now, and the will, capital and technology are in place to create a wave of wind project development across the continent.</p>
<p>However, amidst all the talk of renewable energy in Africa, not one utility scale wind project reached financial close in 2016. This may come as a surprise to many in the industry given how prominently renewables have factored into recent national government plans, as well as in the plans and projections of transnational organisations on the continent.</p>
<p>To provide some context, IRENA’s ‘Renewable Scenario for Africa’ predicts that the share of renewables in Africa will increase from 17% in 2009 to 50% in 2030, and nearly 75% by 2050. Total installed renewable capacity would grow from 28 GW in 2010 to around 800 GW by 2050, with solar photovoltaic accounting for 245 GW, and wind at 242 GW.</p>
<p><strong>So what is the hold up?</strong></p>
<p>The main obstacles to renewable energy projects being built in a timely manner in Africa today, have been governance and politics, and in particular an excess in bureaucracy and a lack of technical capacity in key government departments.</p>
<p>However, there are bright spots. Kenya’s flagship Lake Turkana wind farm – the largest in Africa is set to be fully operational later this year with investment from global tech giant Google and others. There is also strong momentum in countries like Egypt and Morocco who are second and third behind South Africa in terms of installed wind capacity.</p>
<p><strong>What is driving change?</strong></p>
<p>There is growing consensus among the investor community and society at large that the ‘tipping point’ from fossil fuels to renewable energy has been reached. For Africa in particular, the stakes are high. The ‘renewable energy revolution’, provides Africa with a one off opportunity to leapfrog fossil fuels and the 20<sup>th</sup> century model of energy development and move towards a clean, efficient system based on 21<sup>st</sup> century technology the same way Africans skipped ahead to mobile phones over fixed telephony &#8211; and embark on a different industrial development path.</p>
<p>The political will is there. It seems one government after another have been setting ambitious clean energy targets in an initiative to transform their energy mix in favour of a more sustainable future. East Africa is a good example beginning with Uganda’s 61% renewable goal by 2017, followed by Kenya’s 42% by 2033 and Tanzania’s 70% by 2026. Not to be outdone, Ethiopia was among the most daring signatories to the Paris Agreement on climate change, committing to cut carbon emissions by 64% by 2030.</p>
<p>The most powerful factor influencing policymakers is that renewables and wind in particular make solid financial sense. The costs of developing solar in Africa fell 50% from 2010 to 2014 and continue to fall, but the cost of wind on the continent is on a very interesting trajectory as the recent tender in Egypt resulted in bids as low as USD 0.041/kWh, a new record for Africa. We have seen the cost of offshore and onshore wind drop dramatically where scale has been reached in places like Europe, China and the USA, demonstrating a way for Africa to follow suit.</p>
<p><strong>Solar paves the way for Wind?</strong></p>
<p>The barriers to entry for utility scale wind projects, are higher than with solar, but the potential of wind is not to be underestimated, especially where it can complement solar power. Recent studies, namely in India and Brazil, revealed how wind and solar projects can complement each other by minimising the variability of the power output and easing pressure on the grid.</p>
<p>India’s Ministry of New and Renewable Energy has released a draft national Wind-Solar Hybrid Policy targeting 10GW by 2022. In a similar move, Brazil&#8217;s Senate Committee for Environment has approved a bill that allows hybrid renewable energy projects to take part in the country&#8217;s energy auctions.</p>
<p>Using similar logic, certain African countries that initially welcomed solar projects on their home soil are now turning to wind power, as the technology gains ground and its symbiotic relationship with solar becomes clearer.</p>
<p>Two telling yet very different examples come to mind, Egypt and Zambia.</p>
<p>Egypt’s target of 7.2 GW of wind power by 2022 will lead to considerable investments in the near future. The North African country’s estimated investment potential for wind power is $11 billion by 2020, compared to just $5 billion for solar projects.</p>
<p>Zambia, on the other hand, made headlines as the home of Africa’s cheapest solar just over a year ago. Now, the Southern African country known more for its formidable solar and hydropower, is turning to wind with the help of the US Trade and Development Agency (USTDA) grant funding for a 130MW wind farm that Access Power will develop with EREN Renewable Energy.</p>
<p><strong>Only the beginning…</strong></p>
<p><strong> </strong>Things are going in the right direction, so there is reason to believe in the potential of Africa’s wind industry as certain countries, whether likely or unlikely, are showing the way. The next couple of years should see a lot exciting wind projects come to fruition, and it seems inevitable that the current constellation of goodwill, capital and innovation will allow Africa to take the opportunity to chart its own industrial path, towards a clean energy future.</p>
<ul>
<li><em>This article was written by <a href="http://www.access-power.com/">Access Power</a>&#8216;s Executive Chairman <a href="http://www.access-power.com/our-people">Reda El-Chaar</a> </em></li>
</ul>


Op-Ed: Africa is on the cusp of a wind energy revolution, it’s time to grasp it

<p>Kenyans pay high prices for electricity <a href="http://www.coastweek.com/3732-latest-news-Kenya-plans-to-axe-electricity-price-by-47-per-cent-in-three-years.htm">up to</a> USD$0.19/kWh for residential customers compared to about <a href="http://www.htxt.co.za/2016/04/01/here-is-how-much-youll-pay-for-electricity-from-today/">US$0.10 in South Africa</a> which is a barrier to the country’s sustainable economic development. The country is also expecting <a href="https://www.nema.go.ke/index.php?option=com_content&amp;view=article&amp;id=33&amp;Itemid=118">a steep rise in demand</a>.</p>
<p>To address this Kenya is modernising its electricity system and shifting away from costly diesel generators. Investments in new infrastructure are being made to <a href="https://www.nema.go.ke/index.php?option=com_content&amp;view=article&amp;id=33&amp;Itemid=118">lower</a> prices. New projects are moving forward such as <a href="http://www.renewableenergy.go.ke/index.php/content/28">geothermal</a>, <a href="https://www.esi-africa.com/news/kenya-to-build-gas-fired-power-station-in-mombasa/">natural gas</a>, wind – such as the <a href="http://ltwp.co.ke/">Lake Turkana Wind Farm</a>, and a solar photovoltaic (PV) <a href="http://cleanleap.com/kenya-build-east-central-africa%E2%80%99s-largest-solar-power-plant-garissa">project</a> in the northeastern city of Garissa.</p>
<p>But the most ambitious, and most controversial, is a coal-fired power plant <a href="http://www.sourcewatch.org/index.php/Lamu_Power_Project">proposed</a> for the seaside town of <a href="http://whc.unesco.org/en/list/1055">Lamu</a> – a Unesco World Heritage site.</p>
<p>Electricity from the Lamu project is <a href="http://www.engineeringnews.co.za/article/kenya-2016-08-05">expected</a> to have a much <a href="http://www.engineeringnews.co.za/article/kenya-2016-08-05/rep_id:4136">lower market price</a> than current prices, selling for about US$0.08/kWh. But this doesn’t include the costs of pollution, including greenhouse gases like carbon dioxide (CO2). When these are factored in, the full price of coal-fired electricity is much less attractive.</p>
<p>Also, although Kenya has recently identified domestic coal deposits, there is no infrastructure in place to deliver coal to the proposed facility at Lamu. The coal would be <a href="http://www.the-star.co.ke/news/2017/04/08/lamu-coal-plant-works-to-start-in-two-months_c1540169">imported from South Africa</a> until a 350km rail line is constructed from coal-producing Kitui County to Lamu.</p>
<p>The timeline for such a railway is uncertain and <a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/01Executive%20Summary.pdf">may take five to ten years</a> to build. The power plant will consume about <a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/01Executive%20Summary.pdf">3.6 million tonnes</a> of coal annually at an expected price of <a href="http://www.the-star.co.ke/news/2017/04/08/lamu-coal-plant-works-to-start-in-two-months_c1540169">US$50/ton</a>. The total cost of importing coal for this one facility, about $180 million each year. Kenya already has a significant trade deficit and, unless the Lamu plant significantly displaces diesel imports, coal imports could exacerbate it.</p>
<p><strong>Social cost of carbon</strong></p>
<p><a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/Project%20Details.pdf">According to the project’s</a> environmental and social impact assessment, the Lamu facility will produce about 8.8 million megawatt-hours (MWh) of electricity each year. The assessment also states that each MWh of electricity from this type of plant results in one ton of carbon dioxide – making a total of 8.8 million tonnes of CO2 per year.</p>
<p>Environmental economists have estimated the economic value of the damage caused to human health and the environment from climate change – known as the “<a href="https://www.brookings.edu/testimonies/the-social-costs-of-carbon/">social cost of carbon</a>”.</p>
<p>Using the same methodology as these <a href="https://www.epa.gov/sites/production/files/2016-12/documents/social_cost_of_carbon_fact_sheet.pdf">calculations</a>, adding the social cost of carbon (USD$0.05/kWh in 2017 dollars) to the proposed coal plant’s market price (USD$0.08/kWh) results in a total cost of $0.13/kWh in coal-fired electricity production. The total cost to society of coal-fired electricity from the Lamu facility is therefore at least 40% higher than the market price which ignores the human health and environmental effects of pollution.</p>
<p><strong>Lower cost options</strong></p>
<p>That’s the bad news. The good news is there are lower cost options for Kenya to meet its electricity goals.</p>
<p>The price of renewable energy is now competitive with fossil fuels. Electricity from the <a href="http://cleanleap.com/kenya-build-east-central-africa%E2%80%99s-largest-solar-power-plant-garissa">50 MW solar PV project in Garissa</a> is priced at US$0.12/kWh. The feed-in tariff for geothermal projects is <a href="https://www.usaid.gov/sites/default/files/documents/1860/Kenya%20_IG_2015_05_03.pdf.">US$0.09/kWh</a> and the 310 MW <a href="http://ltwp.co.ke/lake-turkana-ready-to-inject-33-percent-of-the-agreed-power-into-the-national-grid/">Lake Turkana Wind project</a> is priced at just US$0.08/kWh – just a fraction of a cent above the price of coal-fired electricity and much less of the coal’s total cost when pollution is included.</p>
<p>These technologies are pollution-free and do not depend on fuel imports. Although wind and solar are intermittent resources and more difficult to integrate into the grid, geothermal provides baseload power – a more reliable energy source that isn’t affected by factors like weather conditions. Advances in energy storage are also making higher penetrations of solar and wind more feasible.</p>
<p>The outlook for solar PV is even more encouraging. In recent months, India has <a href="https://cleantechnica.com/2017/05/16/gujarat-cancellation-4-gw-power-plant-line-indias-goals-reduce-reliance-upon-coal/">cancelled</a> the construction of coal power projects – the equivalent of 14 Lamu projects – because the price of solar PV has dropped precipitously. The <a href="http://ieefa.org/ieefa-asia-indias-electricity-sector-transformation-happening-now/">most recent</a> in a string of record-breaking solar projects was a 500 MW priced at 2.44 rupees per kWh, or USD$0.038/kWh. That price is nearly half that of the Lamu coal plant ignoring the cost of pollution. It seems reasonable to expect declines in Kenya’s solar prices, even if less dramatic than those in India.</p>
<p>The combination of increasing global concern of climate change and the dropping costs of zero-carbon energy technologies presents a risk that the Lamu coal plant could become a stranded asset.</p>
<p>An OECD working paper <a href="https://www.oecd.org/sd-roundtable/papersandpublications/Divestment%20and%20Stranded%20Assets%20in%20the%20Low-carbon%20Economy%2032nd%20OECD%20RTSD.pdf">notes</a> that</p>
<p><em>energy-using equipment in electricity and other economic activities will have to be retired at an accelerated pace to make space for less carbon intensive technologies and practices. As climate policies drive this transition, some assets will become ‘stranded’ – ie. unable to recover their investment cost as intended, with a loss of value for investors.</em></p>
<p>The Lamu plant has a design life of <a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/Project%20Details.pdf">at least</a> 30 years. There is a risk that the Lamu coal plant could become a financial liability sooner than 2050, perhaps much sooner.</p>
<p>Coal-fired electricity was the engine of economic growth in the 20th century, but for a variety of reasons, it’s unlikely to power the 21st. Kenya has abundant solar, geothermal, and other energy resources that, thanks to technological and financial innovations, are now cheaper than coal.</p>
<p>The climate change costs of coal will only increase in the coming years while innovation is driving the price of renewables down. Compared to coal, renewable energy sources such as solar, geothermal, and wind, have lower total costs, less long-term risk, and greater potential to power Kenya’s sustainable economic development.</p>


Op-Ed: Why the Lamu coal plant doesn’t make sense. Kenya has better energy options

<p>General Electric (GE) and the Addis Ababa Institute of Technology (AAiT) have signed a Memorandum of Understanding to &#8220;frame an ongoing collaboration&#8221; with the aim of &#8220;enabling capacity development programs focused on renewable energy.&#8221;</p>
<p>In a news release on Monday, GE added that the ultimate goal was to develop a renewables &#8220;center of excellence&#8221; at the AAiT. The center would, among other things, act as both a learning hub for undergraduates and a research incubator for graduates.</p>
<p>GE said that it had been working with the AAiT since the end of last year to develop and implement programs focused on skills development. In March this year, engineers from GE Renewable Energy Hydro gave seminars to AAiT students and staff on hydro turbines and generators.</p>
<p>According to the International Hydropower Association (IHA) the untapped potential of hydropower in Ethiopia &#8220;amounts to around 45,000 MW (megawatts).&#8221; In addition, the IHA says that hydro is responsible for more than 80 percent of electricity produced in the country.</p>
<p>&#8220;The MoU with AAiT is a new milestone for GE Renewable Energy in Ethiopia,&#8221; GE Renewable Energy&#8217;s Yves Rannou said during the MoU&#8217;s signing ceremony.</p>
<p>&#8220;It enables sharing current industry expertise and experience with students and faculty at AAiT in order to build a highly-qualified workforce that will support the social and economic development of the country,&#8221; Rannou added.</p>


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