Energy Policy in Subsaharan Africa. Benefiting Local People.
Greg Coleman, David Bamford, Temur Japaridze
07 August 2018
As many will already know, eight out of 10 people in Sub Saharan Africa do not have access to electricity. In Uganda it is 9 out of 10 people that do not have access to reliable electricity. Six hundred million people in Sub Saharan Africa do not have access to electricity. Electrification varies widely between rural and urban areas. In sub-Saharan Africa only 14 percent in rural areas have access to electricity (World Energy Outlook ).
Now the American Government is getting into the act. China has been providing capital for infrastructure development such as roads, airports, hydro dams, railways and ports for a a number of years as part of their Belt and Roads initiative. The Americans have just announced that they will support the development of a natural gas power plan for a number of African countries with over $170 billion USD. The majority of this capital is from private companies to develop the discovered natural gas in Mozambique and Tanzania. The focus seems to be on those countries which have discovered natural gas resources. They have excluded Uganda for example. Many countries such as Kenya are hugely in debt to China and even with rapid growth are going to have trouble repaying their debts to China and the World Bank.
Each country will hopefully require increasing access to electricity and fuel for heat/cooling, light and transportation. We all know how much our lives improve when we have reasonable cost access to reliable sources of electricity for our phones, for cooling and some day for our vehicles. We still require hydrocarbon fuel for our transportation needs. Electric vehicles are for the future.
Where do solar, geothermal, wind and hydro fit into the future these same countries? Costs continue to come down such that solar and wind can compete on a cost basis with hydrocarbons. However, they both require a low cost source of energy storage in the form of batteries or backup power from hydro or natural gas. You will note that we are not advocating using crude oil, or coal or peat or wood for backup. Of course they are available and in some cases dominate the energy sources today. However, as noted in a recent study by the IESE MICI study, African cities do not rate very well in terms of transport efficient, air quality, city planning or higher education (IESE, 2018). Use of renewable energy is very low.
It is time to take a look at the broader picture and plan for the future beyond tomorrow. Thinking 10-50 years forward is going to be required. Selling natural gas to those that can barely afford it is not going to work when that same natural gas can be sold to wealthy developed nations like the United Kingdom, Japan and China.
Questions to consider
Does the government of Uganda have plans/mechanisms of cooperation with their neighbours to align with the energy policy?
Are there any short, mid and long-term government plans on gradual extension of energy supply grids to areas where there is no electricity today?
Are there any monopolies, both natural and market-originated, in the country? and if positive – does it jeopardize development of free energy market?
Can a foreign energy company have a stand-alone business unit in Uganda, or they would need to establish a JV with the local entity, commercial or state, to operate?
Can the region or country bypass the need for natural gas and go to completely to renewable energy now?
Is energy independence a worthwhile goal?
These issues will be explored by the Virtual University of Uganda as part of the International Development Program.
1. International Energy Agency’s electricity database and methodology, World Bank, Worldwatch Institute, NASA. Washington Post
2. IESE Cities in Motion- Business School University of Navarra, 2018
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