How to Tap into Africa’s Energy Mix to Accelerate Economic Development

File photo: 6.2% of sub-Saharan Africa’s energy mix depends on oil

The Executive Secretary of the Public Utilities Regulatory Commission (PURC), Dr Ishmael Ackah, presented a paper at the 3-day follow-up meeting of the Commonwealth Science Conference on Sub-Saharan Africa on Monday 14 February 2022. March 14-16, 2022 at the Ghana Academy of Arts and Sciences.

During the energy session, Dr. Ackah was among the speakers who spoke about future technologies for the energy transition.

PURC’s Executive Secretary made a presentation on “The political economy of the energy transition”.

The energy economist in his presentation suggested that Africa’s energy mix is ​​dominated by hydropower technology, with the exception of South Africa.

According to a 2018 report from the International Energy Agency.

He believed that economies such as Nigeria, Angola and others are structured around the oil and gas industry.

In Angola, oil contributes around 70% of government revenue. He reiterated that oil revenues were used for investments, social interventions and debt repayment.

For example, oil revenues in Ghana are a major contributor to the Free Senior High School Initiative which was rolled out as part of the Human Capital Development Strategy.

He again said that about 730 million people in sub-Saharan Africa depend on the traditional use of solid biomass, mainly firewood, charcoal and dung for cooking – usually with inefficient stoves or simple three-stone fires, in poorly ventilated spaces.

Therefore, he was quick to add that the transition involves diversified and competitively priced energy sources that meet the continent’s need for industrialization and access in an environmentally sustainable way.

He felt that there should be research, capital, a resource base and good governance to achieve this.

According to the UNESCO report, 2021, Africa’s gross research expenditure as a share of GDP is around 0.5% on average, compared to a global average of 2.2%. No known country in Africa devotes 1% of its GDP to research.

Dr Ackah said in his presentation that while some countries in sub-Saharan Africa lack reliable electricity infrastructure, there is a potential opportunity to develop this infrastructure in a more sustainable way than other countries have done in the world. past by moving towards national electrification.

He said countries that can provide low-cost, zero-carbon generation can thrive on abundant solar and wind resources.

How can these be funded?

Investing in cost-cutting technologies, adopting a pay-as-you-go system to help spread the initial cost of renewable energy technologies; structure payments for new renewable energy technologies so that they are similar to the costs of the energy sources they replace; collaborative investment and local investment engagement; as well as alternative funding sources such as bonds, enhanced refinancing opportunities.

On governance, Dr Ackah mentioned that policy, regulatory and institutional frameworks can lead to the unbundling of utilities to open up competition, establish multi-year tariffs with adjustment clauses, clear renewable energy, aligning with climate and sustainability goals, and clear and transparent targets. procurement process.

Again, information and technical capacities such as public education, research development, technical capacity building as well as national innovation capacity building – including skills for installation, l maintenance and repair of renewable energy technologies – and engagement with local communities, including women, in the training and maintenance of these systems.

He concluded by saying that Africa must be part of the value chain and not just a consumer of technologies.

In addition, natural gas as a fuel Transbridger – Gas is cleaner and a good complement to renewable energies.

Natural gas can support the economic transformation of the continent through the production of chemicals, the manufacture of fertilizers, cement and clean cooking fuels. Leaving natural gas in the ground will only delay or prevent Africa from industrialising.