Africa’s renewable energy sector in context image

Africa’s renewable energy sector in context

Evaluating Africa’s renewable energy sector in comparison to other regions

Over the past three decades, the African continent has made tremendous strides in harnessing the potential of renewable energy. According to World Bank statistics recorded in 1990, over a dozen African nations were unable to provide reliable electricity to more than 10% of their population. In the years since then, many African countries have been able to make use of the continent’s vast natural resources; Kenya, Botswana, and the Republic of Congo are just a few of the continent’s inspiring success stories.

However, Africa’s energy progress does not occur in a vacuum, and it is valuable to evaluate the continent’s efforts in comparison to other regions of the world. In addition to offering a benchmark to gauge Africa’s overall development, these comparisons also offer potential roadmaps to success. By studying the steps taken by nations with thriving renewable energy projects, government leaders and investors could discover new avenues for growth in Africa.

Sweden: the Gold Standard for Government Support

While the efforts of the European Union in general could serve as inspiration for international unions throughout the world, it is Sweden in particular that stands out as a true world leader in energy efficiency. In 2014, EU nations agreed to a set of renewable energy targets for the year 2030 set forth by the European Commission; according to recent reports*, Sweden is on target to reach this goal later this year - 12 years ahead of schedule. By 2040, the Scandinavian nation aims to run entirely on renewable energy.

Sweden’s remarkable energy success is the result of innovative regulations and incentive programmes introduced by the Swedish government. A special incentive introduced by the government in 2005 offered tax relief to companies in power-intensive industries that made efforts to reduce their energy consumption. The introduction of “green energy certification” in 2003 required that power producers receive certification for their renewable resources, while electricity companies were mandated to purchase a certain percentage of green energy as part of their overall supply.

While government efforts have undoubtedly played a large role in driving the country’s renewable energy progress, many Swedish businesses have also done their part to move towards renewable resources. One of Sweden’s most famous brands, IKEA, has invested heavily in renewable resources, and the company aims to operate entirely on renewable energy by 2020.

Private Participation in South America

Like Africa, the continent of South America presents an array of opportunities and challenges due to the region’s unique climate, resources and politics. Undoubtedly, South America benefits from a stronger starting point than Africa; all South American nations delivered reliable electricity to at least 60% of their population as of 1990. However, there is still room to grow in terms of improving energy access and boosting the overall share of renewable resources in the region’s power supply.

South American energy projects demonstrate the potential offered by private investment in renewable energy. This is particularly evident in Brazil, where private companies have invested millions in wind and hydro projects. The largest nation in South America, Brazil has developed 8 gigawatts of installed wind power capacity as of 2015, with foreign investors competing to take advantage of the nation’s significant resources. Private investments have also made a noticeable impact in Chile and Argentina, where investments in solar, wind, and hydro projects have introduced thousands of megawatts of renewable power.

Africa: All Hands on Deck

The success of African energy projects has come as a result of both government policies and private investment, with the two forces working in tandem to complete game-changing renewable energy projects. One of the most significant players in this effort is Power Africa, a major initiative by the United States Agency for International Development. Created to bring together policymakers, investors and technical experts, Power Africa has served as a steward for power projects throughout Africa. The initiative has the potential to add over 75,000 megawatts of power to the African energy grid.

A similar initiative, the Africa-EU Renewable Energy Cooperation Programme (RECP), works to connect investors and developers in Africa and Europe. These partnerships provide a useful framework for foreign developers to bring their expertise to new regions of Africa; the foreign investors reap the significant financial reward of developing previously untapped resources, while local communities benefit from access to reliable electricity.

It is crucial to note that many African nations have had to develop energy infrastructures from nothing over the last three decades. While the incredible accomplishments of developed nations like Sweden may serve as long-term inspiration, it is unrealistic to expect some African nations to achieve these statistics within the next few years. However, this room for growth can be viewed as an opportunity for both policymakers and investors. A combination of strong leadership and private support could make the difference in turning Africa into the global leader for renewable energy.