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The energy challenge in sub-Saharan Africa: Ways forward

Focus on the financing

To help promote investment in technologies that increase energy access, it will be important to develop policies that reduce risk for private investors, such as making grid expansion plans transparent, and to create institutes to train the relevant technicians. Finally, there is a need to promote financial inclusion and increase access to credit for both potential consumers and local entrepreneurs. 

Focus on institutions

There is, therefore, an absolute need to maintain core advocacy work on creating public energy institutions that are responsive and accountable. It would be an error, for example, to assume that the private sector can resolve the challenge of energy access and that debates over the privatization of state utilities can now be neglected. If this occurs, the ongoing failure of power sector reform to benefit the poor is likely to continue. Further, given the role of subsidies and the scale of tenders that will likely be involved in increasing energy access, the scope for misuse of funds is significant. Given that utilities are already cited as sites of patronage in Africa, the focus on energy access could well result in a greater need to ensure institutional accountability. 

Do not neglect traditional fuels

Although electricity is a unique source of energy that creates unique opportunities for improving people’s standard of living, the empirical evidence is clear: use of solid fuels will remain prevalent regardless of whether households are connected to electricity and regardless of whether they are connected via the grid or distributed energy sources. The use of biomass is actually expected to increase, not decrease, in sub-Saharan Africa. Since as much as 90 percent of household energy needs come from cooking and heating, any serious policy on energy poverty needs to dedicate significant effort to ensuring that such needs can be met safely and sustainably. Policies must account for managing the use and collection of solid biomass rather than simply trying to replace such fuels and ignoring the conditions of their use. To this end the challenges and opportunities around promoting petroleumbased fuels, such as kerosene and LPG, need to be weighed against the challenges and opportunities of meeting energy needs through solid biomass fuels such as fuelwood and charcoal. 

Address uncertainty around grid expansion

Debates about the merits of centralized, on-grid approaches versus distributed energy technologies for addressing energy poverty are overstated. Both strategies will need to be deployed simultaneously. Electricity will best be introduced to most rural households through distributed technologies, but this will likely be a temporary solution. The eventual goal should be grid expansion, which will achieve the lowest cost of electricity for any household and allow for high rates of renewable energy penetration. 

Mix technologies for access

Efforts at grid expansion are likely best undertaken by a centralized state body owing to the fact that the grid represents an almost prefect monopoly. Beyond grid expansion, a mix of private and public approaches can productively generate and sell electricity. Likewise, the provision of distributed energy technology can take place through a variety of hybrid arrangements involving the state and the private sector. 

Support the whole distributed energy supply chain (not just up-front costs)

Policies should focus not only on addressing challenges related to the costs of generation, storage, and distribution, but also on the entire supply chain. This will include creating institutions that train technicians, installers, construction staff, economists, and engineers. It will require ensuring that parts for servicing and replacement are available and affordable, undertaking resource assessments, and creating institutions for financing for both entrepreneurs and consumers. 

Place electricity access within the broader context of development

Although access to abundant energy is clearly a precondition for the levels of economic productivity and well-being experienced in industrial and post-industrial economies, simply providing households with electricity is unlikely, by itself, to drive the large development outcomes that are possible. As such, while improving electricity access is an important development imperative in and of itself, it must be conceived of within a broader development agenda that focuses on the provision of other infrastructure such as roads, markets, and sanitation, and the availability of other services such as credit, education, health, and policing. In this respect it will be important to integrate energy poverty alleviation into efforts to close the energy gap in sub-Saharan Africa. Such a large-scale integration of development efforts is challenging because it will involve many different government departments and ministries, but this integrated planning is likely to be necessary to realize the development opportunities made possible by electrification.

 

Excerpt of: Morrissey, James, “The energy challenge in sub-Saharan Africa: A guide for advocates and policy makers: Part 2: Addressing energy poverty” Oxfam Research Backgrounder series (2017).

 

Download the full report here.