Energy Efficiency Made Simple Vol IV

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installed just to raise the electricity supply of the region to world levels.
An average load factor closer to 60% is more normal, which would
indicate the need for about 400 GW of installed capacity.
Generating capacity is not cheap. Figure 3 shows the overnight
capital costs for new generating capacity for various technologies [1],
where the costs have been corrected for load factor – so, for instance,
nuclear power typically supplies base load at 90% load factor, and the
effective cost shown in Figure 3 is the overnight cost/90%.
Clearly, Combined Cycle Gas Turbines (CCGTs) and hydro power
are the low cost options and should be pursued wherever these re-
sources are available. Coal is the next cheapest option, and significant
unutilised reserves are known in the region. Nuclear and biomass are
the remaining technologies costing less than ZAR40 000 per effective
kW, and both present real challenges, so should only be considered
as last resorts. None of the ‘new renewables’ (wind and solar) look
promising in an environment where capital is a major constraint.
If we assume ZAR20 000 per effective kW installed, then 400 GW
of generating capacity will require a total of ZAR8 trillion, or about
US$800 billion. This is a huge sum in sub-Saharan terms, and even
spread over, say, 15 years, it would require over $50 billion a year to
achieve. Is it affordable?
How can we get there?
There are huge demands for infrastructure in sub-Saharan Africa. It
is therefore a challenge to find a reason for giving power supply any
priority over other infrastructural demands. Fortunately, there is now a
value for power. It has been possible to assess the cost to the South
African economy of the collapse of its network in 2008. Each kWh
that was not provided cost the economy ZAR75 in 2010 terms [1].
A shortfall of 2 400 TWh in the sub-Saharan African region outside
South Africa could therefore be costing the economies in the order
of ZAR200 trillion, or $20 trillion per annum. Spending $50 billion to
make $20 trillion seem like a real opportunity.
However, we have to remember that having adequate energy is
only a necessary condition for growth. Actual growth will occur when
there has been sufficient socio-economic development to be able to
utilise the power. There is little point in making power available if it
cannot be utilised.
The fact that the value of power is far greater than its cost means
that it is wise always to have a little more capacity than you need,
because the cost of running short far exceeds the cost of holding
a little excess capacity. But it does not follow that you must create
significant excess capacity in the hopes of driving development. That has
been tried on several occasions, and we know it is not a successful
strategy.
Another necessary condition for growth is the means to transmit
power from where it is generated to where it is needed. Figure 4
shows the transmission grid in Southern Africa [4], with blue lines
showing existing transmission and red dashed lines – the planned
extensions. There are at present comparatively few cross-border
links, and those that exist are generally of limited capacity. At present,
Angola has essentially no grid, while Kenya, Tanzania and Malawi
are independent, although links are planned. It is most desirable that
cross-border links be created. European experience shows clearly
how reliability of supply can improve when there is a high degree of
interconnection, even though the net power transferred over a year
is quite small. Indeed, it is interesting that while South Africa is a
major power producer, it is effectively in balance with its neighbours,
importing as much as it exports.
Even though transmission is in place, and there is effective local
distribution, it must not be assumed that the arrival of power will result
in an immediate surge in demand. It takes time to assimilate new
sources of energy. A review of the South African experience shows
[5] that it took about seven years after the first arrival of electricity for
homes to be reasonably electrified. The early uses were low-power
needs such as radio, television, computers and telephones; slowly
small domestic appliances like irons and kettles were acquired; and
only after a few more years the first major appliance, which was
usually a refrigerator, was purchased. Creating local distribution is
not cheap, and it takes time to start to recoup the investment in the
system, which is something that must be borne in mind as there is
more widespread power throughout the region.
Conclusion
The availability of sufficient electrical power is one of the key factors
in facilitating economic growth. Sub-Saharan Africa is desperately
short of power, and is poor as a result. Meeting its needs will demand
investment of hundreds of billions of dollars, but the return on this
investment should prove excellent because the value of power far
exceeds its cost.
Many of the nations of the region are blessed with the natural
resources necessary to produce power cheaply – Tanzania, Mozam-
bique, Angola and others have adequate supplies of natural gas; the
Democratic Republic of the Congo has huge hydropower potential;
and Botswana has an enormous and largely untapped coal resource.
A recent assessment of Africa’s energy potential [6] notes that the
present reliance on biofuel as a source of energy is creating huge
environmental impacts. The impacts include loss of a carbon sink
due to deforestation, aerosols from charcoal production and indoor air
pollution from open fires. It is preferable to use more fossil fuel than
to continue to rely on biomass energy.
Africa has the resources. It now needs the courage to develop
them.
References
[1] World Bank. World Development Indicators Excel Workbook.
World Bank, Washington DC, 2015.
data-catalog/world-development-indicators/ Accessed July 2015.
[2] Electric Power Research Institute: Power generation technology
data for Integrated Resource Plan for South Africa – Final Tech-
nical Update. EPRI, Palo Alto CA, 2012.
[3] SA Department of Energy: Integrated Resource Plan for Electricity
2010 – 2030. Revision 2, Final Report March 2011.
[4] Southern African Power Pool.
html. Accessed July 2015.
[5] Lloyd, P. Twenty years of knowledge about how the poor cook.
Domestic Use of Energy Conference. Cape Peninsula University
of Technology. 2012.
[6] Africa Progress Panel: Power, People, Planet Progress Report
2015.
8 ENERGY EFFICIENCY MADE SIMPLE 2015