Four things Power Africa's new roadmap gets right (and one thing it gets wrong)

Ilmi Granoff
5 February 2016
Articles and blogs
‘Power Africa’, the Obama administration’s flagship energy programme for the continent, has just released its roadmap. It is backed by Congress’s near-simultaneous passage of the bi-partisan 'Electrify Africa Act'.

The initiative has already leveraged $43 billion in commitments, and the roadmap spells out how it will supply 30,000 megawatts of power and 60 million electricity connections by 2030. This new capacity, and the prioritising of regionally integrated renewable energy, will be great for Africa’s economic productivity. Power Africa also focuses on delivering electricity access on- and off-grid, rather than assuming it will ensue from new capacity: this should help get power to the poorest. However, a key weakness is the roadmap’s vague limits on high-carbon fossil fuel investment: it needs a clear standard.

Here are four reasons the roadmap is on the right track.

1. Developing 30,000 megawatts of power capacity is great for economic productivity

Power Africa’s target will generate a 30% increase in power capacity in sub-Saharan Africa. New capacity will help improve the quantity and reliability of electricity – if accompanied by improved transmission and management reforms. Both are targets of Power Africa.

ODI analysis shows that expanding power supply and reliability is critical to meet growing demand in industrial and service sectors. Grids in the region typically experience nearly 100 power cuts each year, and almost half of firms identify inadequate access and poor supply quality as serious constraints to production.

2. Prioritising Africa’s abundant clean energy resources makes investment sense

The initiative has prioritised wind, solar, sustainable biomass, and 'environmentally and socially appropriate' hydropower. It is a good investment strategy for Africa. ODI analysis of energy supply scenarios through 2035 showed that growth in fossil fuel power remains relatively constant under most scenarios, while scenarios with high levels of power capacity are driven by exploitation of Africa’s abundant renewable energy resources.

This is because renewable costs have fallen rapidly, driven by maturing technology, better access to finance, economies of scale and increasing project experience. They have already reached parity with fossil fuels in many cases.

Contentiously, Power Africa will continue to develop natural gas. While there is inherent risk in developing fossil based energy as the global economy decarbonises, ODI research (looking at China’s shale gas) supports the view that sensible natural gas development can – if given the right policy context – accelerate the expansion of renewable energy capacity because of its 'grid-firming' attributes. If managed to complement rather than compete with renewable sources, Africa’s abundant gas reserves can help accelerate a low-carbon energy system.

3. Integrating regional electricity grids are crucial to unlock renewables

Many of the best sources of renewable energy exist long distances from the biggest markets. Power Africa’s support for the development of regional cross-border transmission will help pave the way for increased electricity trade. This will bring economic viability to the development of sub-Saharan Africa’s remote renewable energy resources. 

The strategy also emphasises the need to strengthen and reform national and regional power authorities. This is critical. Regional integration is hindered as much by governance challenges as by technical ones, and national reforms are necessary for ambitious power sector objectives with or without regional integration. 

4. Prioritising electricity access, not assuming it, is a cornerstone of Power Africa

The biggest challenge in delivering energy access is distribution, not generation.

Many power initiatives in the past have built new capacity and 'inferred' that electricity connections for the poorest would ensue. It’s a bad inference: up to 68% of expansion will power industry and commercial consumers, the remainder mainly going to wealthier households. Almost 60% of sub-Saharan Africa’s population live rurally where grid infrastructure is expensive and distributed systems like solar home systems and mini-grids are cheaper. Even on the grid, adding new connections will require utility reforms and new financing tools more than new megawatts.  

Power Africa rejects 'inferred connections' and takes distribution seriously, aiming to roll out the electricity grids to 35-40 million homes and businesses, primarily in urban areas. A sub-initiative ‘Beyond the Grid’ supports the distributed system market, connecting an additional 25-30 million homes, accelerating off-grid solar market expansion. New ODI research highlights how solar will be critical to meeting electricity access targets rapidly and equitably and sustainably

Despite all this, the roadmap has one key weak point.

Vague limits on fossil fuel investment 

Power Africa will support higher-carbon power, like fuel oil, only ‘where there are no viable affordable alternatives.’ This is equivalent language to the World Bank’s policy on coal-fired power projects. It is a fair principle from a development standpoint, but its vagueness makes it difficult to apply and hold USAID accountable.  Where are these contexts?  What does ‘affordable’ mean? As renewables continue to get cheaper, there will be fewer and fewer contexts where they don’t present a viable, affordable source.

For several years, Power Africa lacked a clear strategy, but the roadmap is notable in its comprehensive approach to improving Africa’s electricity future. Power Africa is laudably able to balance people, economy and climate in a sensible and ambitious policy framework. Here’s to hoping it succeeds.

Ilmi Granoff