Climate Adaptation: The Socio-economic benefits of clean energy

Cleaner energy advances, innovative ideas and capital investments are slowly changing Africa’s climate adaptation and mitigation practices. Wanjohi Kabukuru examines some success stories and their impact on development.

Guled Ahmed was struggling to raise funds to design and build a solar-powered irrigation pump for a farmer in Somalia. The fundraising snag ended up delaying the entire schedule. While exploring financial options, he heard of a lady bringing up 10 children who had difficulty paying her electricity bill of $50 per month. This prompted a new challenge, as he put aside his fundraising concerns to embark on designing for the lady an affordable 250 watt solar-powered home system which could provide electricity for her house and also meet other essential energy needs within her compound. The entire set-up plus labour totalled $300. 

The positive impact Ahmed’s design had on the family inspired him to conduct a quick survey on how much off-grid communities were spending on electricity in Somalia. His findings led him to set up Power Offgrid, a renewable energy start-up with offices in the US and Somalia.

Today Ahmed’s work, which is aiming to reach some 50,000 Somalian homes in the next decade, is lighting up the Horn of Africa nation, where essential government services are heavily limited and hampered by decades of civil strife.

“We want to disrupt energy use in Somalia by introducing decentralised hybrid wind grids, bio-grids and mini-grids to increase energy access, both in rural and urban communities, at an affordable rate,” says Ahmed.

“In addition, we aim to change regulations in our country to make it more effective to move towards renewable energy models. Africa must adopt sustainable clean energy pathways because Africa’s hindrance to industrialisation and growth is due to lack of energy access and reliable electricity.”

Aside from solar electricity provision, Power Offgrid has also initiated other projects in Somalia, such as Jikobiogas and Hirshaelle, which provide access to clean piped water in the town of Mahad Waye.

 

Pay-as-you-go M-Kopa Solar

In Somalia’s next-door neighbours of Kenya, Uganda and Tanzania, a ground-breaking micro-financing pay-as-you-go scheme through mobile money dubbed M-Kopa – a name which combines ‘mobile’ and the Swahili word for ‘borrowed’ – has seen the rise of solar energies, replacing paraffin lanterns and candles and reaching the parts where state energy utility  firms have failed to go. With a simple deposit of $30 and $0.43 daily payments for using the M-Pesa payment system for up to one year, one easily secures the M-Kopa Solar Home System, a package consisting of a solar panel, four 1.2W LED light bulbs, a control unit with a port for charging cell-phones, one rechargeable LED torch and a rechargeable radio.

Today M-Kopa, which launched in 2012, has lit more than 700,000 homes with solar energy.

These cleaner energy advances in the Horn and eastern Africa are now being replicated all over the continent, complementing strained public sector infrastructure in providing electricity for the unreached masses.

In South Africa, the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) encourages private-sector investment in renewable energy. This programme, which started as a feed-in-tariff scheme, has transitioned to competitive auctioning, reducing the costs of renewable energy uptake.

Under REIPPPP, private companies tender for the electricity tariff of solar, wind, concentrated solar power, landfill gas projects, small hydro and biogas. So far, more than 6,300MW of renewable energy generation capacity has been procured, amounting to $20.5bn of investments in more than 50 projects.

From small micro projects to multi-million-dollar energy projects, Africa is embracing climate adaptation and mitigation through renewable energy uptake.

Away from the tales of doom and gloom that accompany most climate-change narratives, innovative ideas and heavy capital investments are slowly trickling and streaming in respectively towards climate adaptation and mitigation. 

 

Climate-resilient investments

Billions of dollars from the major global lenders, governments, donors and even the private sector are now finding their way towards what is generally referenced as “low carbon, climate-resilient” investments, which are essentially cleaner, eco-friendly, renewable energy alternatives such as solar, wind and geothermal power sources.

On the solar front, there is Morocco’s $9bn 350MW Noor-Ouarzazate concentrated solar power plant and Egypt’s planned harnessing of 2GW from solar, which has made it spend $3.5bn more to shore up the 150MW Kuraymat Solar Thermal Power Plant. These are but two of Africa’s solar power benchmarks.

When it comes to wind power, the east African nation of Kenya has taken the lead from Ethiopia with its commissioning   of the largest wind farm in the African continent, the €623m Lake Turkana Wind Power Project in July 2019.

By connecting the 310MW project to the national grid, Kenya echoed the
approach of Ethiopia’s Ashegoda Wind Farm, which was built at a cost of €210m, with a generation capacity pegged at 120MW of power, and Morocco’s Tarfaya Wind Farm on its South Atlantic coast.

When it comes to geothermal energy, Kenya is ranked seventh globally. Kenya’s  installed geothermal generation capacity stands at 726.6MW and it is Africa’s leader in exploiting this form of clean energy.

Ethiopia has already contracted Reykjavik Geothermal, a power developer, to start exploration drilling shortly for a $4.4bn energy project, constructing two 500MW geothermal plants in Tulu Moye and Corbetti, south of Addis Ababa. 

Tanzania has identified some 50 sites in the River Rufiji and Lake Natron basins and set aside $821m for geothermal production, estimated to produce some 600MW of power. 

Africa’s footprint in the renewable sector signifies a continent where countries are keen to develop their economies by embracing cleaner energy and curbing emissions at the same time.

 

The Paris Agreement

With the entry into force of the climate change pact best known as the Paris Agreement in 2015, a surge of renewable energy uptake has been experienced in the last four years. Renewable energy sources which are accepted as the best alternatives to combat climate change and limit emissions are now competing with fossil-fuel-based energy sources.

The International Renewable Energy Agency (IRENA) says a third of global power capacity is now based on renewable energies. In its annual Renewable Capacity Statistics 2019, the Doha-based UN agency specialising in renewables noted that globally, there was an annual increase of 7.9 per cent from new additions in solar and wind energy. Asia accounted for 61 per cent of total new renewable energy installations and grew installed renewables capacity by 11.4 per cent. Oceania experienced the highest growth with a 17.7 per cent rise. Africa was third as it experienced an 8.4 per cent increase.

“Through its compelling business case, renewable energy has established itself as the technology of choice for new power generation capacity,” says Adnan Amin, IRENA’s CEO. “The strong growth in 2018 continues the remarkable trend of the last five years, which reflects an ongoing shift towards renewable power as the driver of global energy transformation.”

According to IRENA, since the year 2000, non-renewable energy generation capacity has expanded by an annual average of 115GW.

“Africa could meet nearly a quarter of its energy needs from indigenous and clean renewable energy by 2030. Modern renewables amounting to 310GW could provide half the continent’s total electricity generation capacity. This corresponds to a sevenfold increase from the capacity available in 2017, which amounted to 42 GW,” IRENA’s Scaling up Renewable Energy Deployment in Africa 2019 report notes. “A transformation of this scale in Africa’s energy sector would require average annual investment of $70bn to 2030, resulting in carbon-dioxide emissions reductions of up to 310 megatonnes per annum.”   

However in its recent assessment, the Paris-based International Energy Agency (IEA) notes that the investments in cleaner energy technologies are not enough and Africa has the least share of energy investments globally.

According to the IEA, global energy investments, which stabilised last year, totalled more than $1.8tn in 2018. The US and China remained as the world’s largest energy investment destinations. IEA’s World Energy Investment 2019 report says Africa received 15 per cent of the $1.8tn total global energy investment in 2018.

“Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies,” says Dr Fatih Birol, the executive director of IEA. “But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, or investing enough in cleaner energies technologies to change course. Whichever way you look, we are storing up risks for the future.”

Echoing the sentiments of IEA is a report by the consortium consisting of Rainforest Action Network, Bank Track, Indigenous Environmental Network, Oil Change International, Sierra Club and Honor the Earth, with an endorsement by some 160 other organisations globally, which shows that some 33 global banks have provided some $1.9tn to fossil fuel companies since the signing of the Paris Agreement in 2015. 

 

Red alert

The Banking on Climate Change 2019 report found out that “business practices of the world’s major banks continue to be aligned with climate disaster and stand in sharp contrast with to the recent IPCC special report on global warming.”

Speaking at the launch of the report, Alison Kirsch, who is the climate and energy lead researcher at the Rainforest Action Network, cast aspersions on the global financial sector. “Alarming is an understatement. This report is a red alert. The massive scale at which global banks continues to pump billions of dollars into fossil fuels is flatly incompatible with a livable future,” Kirsch says. “It’s an insult to logic, to science and to humanity that since the groundbreaking Paris Climate Agreement, financing for fossil fuels continues to rise. If banks do not rapidly phase out their support for dirty energy, planetary collapse from man-made climate change is not just probable, it is imminent.” 

In addressing the clean energy catch-up and reduction on fossil fuel dependency, there have been heightened activities within the global lending fraternity aimed at shifting the focus to shore up the uptake of renewable energies as alternatives to dirty fuels. This is especially urgent in Africa where the OECD notes that 670m people lack electricity access.

Early in March this year, Akinwumi Adesina, the president of the African Development Bank (AFDB), announced in the Kenyan capital, Nairobi that from 2020 to 2025, the Abidjan-based continental lender will be scaling up its funding, committing some $25bn on climate finance between 2020 and 2025. “The required level of financing is only feasible with the direct involvement of the entire financial sector,” Adesina says. “Consequently the bank launched the African Financial Alliance for Climate Change (AFAC) to link all stock exchanges, pension and sovereign wealth funds, central banks and other financial institutions of Africa to mobilise and incentivise the shift of their portfolios towards low carbon and climate-resilient investments.”

This announcement was made at the high-powered One Planet Summit convened in Nairobi, Kenya and attended by among others, France’s President Emmanuel Macron and Kenya’s President Uhuru Kenyatta.

This was no surprise. It has been a growing interest spanning well over a decade now by all of the world’s multi-lateral development banks to channel their funds towards what are referred to as “climate-smart, low carbon investment opportunities”. The move by AfDB to allocate 40 per cent of its funding to climate finance makes it the highest among other development lenders in the world.

 

Desert to Power initiative

Indeed as part of its Climate Change Action Plan, the AfDB mobilised $12bn between 2011 and 2015 to support what it refers to as “climate resilient and low-carbon development in Africa”. 

In 2017 AfDB raised its stakes again when it launched the $10bn “Desert to Power” initiative, which is set to inaugurate a 10GW grid in the Sahel region targeting Senegal, Nigeria, Mauritania, Mali, Burkina Faso, Niger, Chad, Sudan, Ethiopia, Djibouti and Eritrea with an aim of providing electricity to 250m people by 2025.

Earlier in 2016 the World Bank had launched the Africa Climate Business Plan, which is a platform for climate action that finances some 176 projects totalling $17bn. Now in its third year, the climate business plan is being trialed in the eight countries of Côte d’Ivoire, Rwanda, Mali, Namibia, Uganda, Mozambique, Zimbabwe and Kenya covering adaptation, mitigation and resilience. In the same year, the German lender Deutsche Bank established the $500m Universal Green Energy Access Program as an investment fund to finance energy service companies for rural off‑grid and mini-grid systems in Africa. The programme which was endorsed by the pilot nations of Benin, Kenya, Namibia, Nigeria and Tanzania was presented to the Green Climate Fund and approved three years ago. According to data from GCF, the Deutsche Bank has so far disbursed some $301.6m.

The Deutsche Bank programme aims to reach more than 400,000 homes and reduce the emissions equivalent of 50.6m tons of carbon.

Through a collaborative partnership with IRENA and the African Union, the AfDB and participating governments together with private sector entities have already mapped out the Clean Energy Corridors which are earmarked to integrate renewable energies into national grids.

According to IRENA, the clean energy corridors were first started in the East African Power Pool before moving to South Africa and are now a vital link in the Central and West Africa Power Pools respectively.

“Renewable energy deployment needs to grow even faster, however, to ensure that we can achieve the global climate objectives and sustainable development goals,” Amin says. “Countries taking full advantage of their renewable potential will benefit from a host of socio-economic benefits in addition to decarbonising their economies.”