Can we balance Africa’s electricity needs with global decarbonization?

ZEGA RAS-WORK: The Biden administration will divest from fossil fuels internationally, as indicated by U.S. Climate Envoy John Kerry’s speech at the World Economic Forum in Davos on January 27, stating that the U.S. would halt “international financing of fossil fuel projects with public money.” This has been demonstrated in the international donor community’s policy toward Africa. In March, 260 NGOs urged banks not to finance a $3.5 billion oil pipeline in East Africa, because of concerns around local environmental destruction and greenhouse gas emissions. This decision prompted scholars and activists from the continent to ask: what alternatives are western donors, and the Biden administration in particular, offering Uganda, Tanzania and other nations to generate electric power and stimulate their economies?

In this case, the NGOs had no answer. This is significant because, of the 770 million people without electricity access around the world, 75 percent live in Africa, a share that has risen over recent years. The problem of how to factor the basic electricity needs of developing countries, particularly in Africa, into climate change mitigation goals represents a conspicuous gap in U.S. foreign policy and in the global energy transition discussion more broadly. This issue has engendered divergent perspectives; some have argued that solar power, given its falling costs, independence from the grid and job creation potential, can significantly electrify Africa without simultaneously increasing carbon emissions. Others maintain that the west’s policy of rejecting fossil fuel projects in Africa is counterproductive, because African states will opt for “dirty” fuels with worse health and environmental impacts like coal if prevented from using “cleaner” natural gas for electrification. These views aren’t mutually exclusive; renewable energy has a significant role in the future of Africa, but U.S. foreign policy should not attempt to force African nations to adopt renewables at an unprecedented scale, before they have the capacity and resources to do so.

When Joe Biden took office in January, his Defense Department officially recognized climate change as a threat to national security. The administration has signaled that international climate financing will play a major role in its foreign policy response to the climate crisis, having released the first ever International Climate Finance Plan on April 22. Among other commitments, the plan states that “Departments and agencies will seek to end international investments in and support for carbon-intensive fossil fuel-based energy projects.” This follows actions taken by U.S. allies in Europe, whose development finance institutions have begun divesting from fossil fuels internationally. However, policy experts believe that an indiscriminate ban on fossil fuels in Africa could hurt regional economic development and electrification, and even stifle the continent’s efforts to adapt to climate change.

It is true that solar power can drive African development. There are 70 countries with excellent conditions for solar photovoltaic (PV) power generation (in terms of kilowatt hours per installed kilowatt peak) the vast majority of which are African. This potential is already starting to be explored; 2020 saw $1.3 billion of venture capital invested in African tech startups, matching a record set in 2019, with a significant amount going to solar startups. Despite this, massive under-investment is holding Africa’s clean energy transition back, and the continent needs climate finance from rich nations to take advantage of its electricity potential. Without this funding, African countries have turned toward fossil fuels, which are often naturally abundant within their own borders. Climate-smart policy would finance clean energy development in Africa, an example being the historic deal between Ghana and Switzerland to finance green technology such as solar PV and clean cookstoves through private sector partnerships. Indeed, a key component of the new International Climate Finance Plan is increasing investments in clean energy abroad, through public and private finance.

There are some important limitations to this solution though, however. Some of the most important aspects of ending energy poverty have less to do with generation but rather involve improving the grid, expanding energy storage and fixing utilities firms. There is also the question of how to proceed with “transition fuels” like natural gas, which are cheaper and less environmentally harmful than fuels like coal and wood. Utilities companies in Africa are making net losses, which impacts their ability to provide consumers power; a 2016 World Bank study of 39 African nations found that only Uganda and Seychelles have utilities that recovered their capital and operational costs. There are many reasons for the financial woes of Africa’s utilities sector, including volatility in oil prices, but a relevant one is the intermittency of renewables. For example, in Kenya, large scale projects like the 310 megawatt (MW) Lake Turkana wind farm and 50 MW Garissa solar PV farm have put massive strain on the power grid, which has driven up the costs of managing the grid to respond to these fluctuations and compromised the reliability of electricity.

These issues require targeted investments into transmission and grid management technology, support for utilities and most importantly energy storage, where there is currently a significant market gap. Until African development can reliably depend on renewable energy, there will likely be a role for gas-to-power projects to act as a transition to a clean energy future, which the U.S. should support. Indeed, Power Africa, the US Agency for International Development (USAID)’s initiative for electrification in Africa has funded and partnered with African countries to build gas-fired plants, such as the new 450 MW power plant in Mozambique, and develop critical electricity infrastructure. USAID is also working with the African Development Bank to finance 343 kilometers of transmission lines to connect grids in the northern, central, and southern regions of Angola, addressing a major supply gap and increasing electricity access. While countries desperately need more power, the infrastructure needs to be developed in order to support it, and this is especially true for renewables.

As agencies like USAID and the U.S. Development Finance Corporation release the specifics of their climate finance strategies, in line with Biden’s Climate Finance Plan, they should also support natural gas development in low-emission energy-poor countries, which are disproportionately concentrated in Africa. Experts believe that, even under extreme scenarios, natural gas power would not substantially increase the continent’s share of global carbon emissions and could replace more carbon-intensive fuels like wood that are widely used across the continent for cooking and other purposes. Additionally, if U.S. development finance institutions ban financing for natural gas as a transition fuel entirely, Africa may be incentivized to turn toward China, which is financing several dirty coal plants in Africa, or Russia, which is investing in Africa’s oil sector. In other words, providing finance for some natural gas development would be more effective at lowering Africa’s carbon emissions than a blanket ban on fossil fuels, which would be detrimental to long term U.S. foreign policy objectives.

Further, the U.S. should increase investments in off-grid solar, as part of the administration’s commitment to scale up green technology financing. This would transform the lives of people in countries with unreliable or non-existent grids and even allow factories to generate power independently as well. With a 90 percent reduction in the cost of solar over the last decade, and the Department of Energy aiming to cut solar costs by an additional 60 percent over this decade, the economic prospects of this option align comfortably with Africa’s electrification and development goals. This could function as a way to alleviate energy poverty on the continent while it develops the generation capacity and infrastructure for utility-scale renewables.

Overall, global decarbonization and African development are interconnected, and balancing priorities such as the immediate electricity needs of impoverished populations or building costly electricity infrastructure all while trying to limit carbon emissions is difficult. However, these challenges can be met using innovative technologies like off-grid solar, transition fuels like natural gas, and innovative public-private partnerships between the U.S. and Africa.

Zega Ras-Work is a writer interested in renewable energy, economic development and agriculture. He is a sophomore studying political economy and environmental studies in the College.