Africa has been a problem continent for decades now. Ever since independence, the continent has been mired in corruption and economic stagnation. But that legacy is now playing into the continent’s hands. There’s good reason to think that Africa could, in fact, be one of the primary beneficiaries of new green energy tech future. Here’s why.
It All Comes Down To Price
One of the reasons why we haven’t seen an energy revolution just yet in the West is because fossil fuels are cheap. Until now coal has been the cheapest way for us to make electricity. And until only a few years ago, solar was an order of magnitude more expensive per kWh. In that environment, there is no market-based mechanism to make solar energy work. And because of that, coal persisted.
What’s more, rich countries’ economies are based around making the price of fossil fuel energy cheaper. In developed countries, about 80 percent of people live in urban centres. And that brings down the cost of a centralised power grid. It’s just easier to deliver electricity to people when they’re all in one place. But the story in Africa is very different. Here, only about 30 percent of the population is urbanised. The rest live spread across the continent’s vast interior, many in small villages. That changes the game enormously. In that environment, centralised grids just aren’t cost-effective. It’s too expensive to run power lines to a population which is so dispersed.
The solution so far has been for people to use diesel generators. These are dirty, expensive to buy and costly to run. It is estimated that they cost anywhere between $0.30 and $0.50 per kWh. That’s way more expensive that either coal or solar right now, both of which are around $0.10.
A New Economic
Thus, now that the price of solar is hitting record lows, Africa is ripe for solar investment. Africa is poised to leapfrog traditional centralised power generation. Mobile solar units cost so much less than the alternatives that their adoption will be widespread. A dispersed population combined with no incumbent power generators is fertile ground indeed. Africa is also the least energy-intensive continent on Earth. Africans only use about a tenth of the electricity per capita compared to the world average. Thus, the underlying economic need for constant power generation is lower. Solar energy is ideally poised for such an environment.
Right now, the problem seems to be creating incentives for poor Africans to invest in solar.
As Kenya’s Renewable Energy Conference site points out, the challenge in Africa is to get solar on the grid. If Africans can’t connect their panels to local grids, they can’t sell their electricity. And if they can’t sell what they make, there’s less incentive to invest.
Perhaps the only exception to this happy story is South Africa. Here coal’s cost advantage and the urban population will fend off green energy tech for a little longer. But even here it will only be a matter of time before solar starts popping up on roofs across the country.