How Africa can drive the global clean energy transition

 
Africa’s power and energy challenges – but abundance of renewable energy sources – also make it the continent best positioned to lead the transition to clean energy
 

In this episode, the panel unpacks the concept of renewable energy – how it differs from other forms of energy, where it fits into the overall energy universe – but also discuss why renewables could be the solution for reducing the world’s dependence on fossil fuels as well as why Africa can drive that change.

The panel is made up of Abel Mjiyako, Chief Technical Officer at Revego Fund Managers and Dieter Matzner, a power and infrastructure consultant at Investec Bank. They help to demystify renewable energy, including wind and solar PV and battery storage and other technologies and how this impacts on the climate and CO2 emissions in terms of reducing our carbon footprint when compared with older generation technologies.

The team is interviewed by Chris Yelland, an energy analyst and managing director at EE Business Intelligence.

 

What is renewable energy? 
 

Mjiyako says the main thing about renewable energy is that it is clean – it does not add to the carbon emissions that cause climate change. “In terms of generating electricity, renewables do not cause any harm to the atmosphere,” he says.

Matzner argues that the definition of renewable energy is that it must be limitless – it shouldn’t depend on the earth’s resources – which means energy sources derived from the sun.

“Ultimately solar, wind, hydro as well as biomass are dependent on sunshine,” he says. “And as long as the sun shines these four resources will be there. We know that the sun probably has another five billion years left so for all practical purposes, the threats to the earth or life on earth are definitely not energy.”

 

On the technologies that support renewables
 

Yelland poses the question that while renewable energy sources may be abundant, they require supporting technologies to make them dispatchable and reliable, to overcome their intermittent nature (for example the sun doesn’t shine 24 hours a day and the wind can vary significantly).

Matzner says digitisation is one of the first applications of technology that needs to be looked at.  

“In other words, you can create smart platforms where energy can be provided on a controlled basis,” he points out.

“So the matching of the amount of supply through the digitisation of the power supply grid is very important and is of course supported by the whole concept of the internet of things and the ability to let all these devices communicate with each other across the grid.”

Energy storage is another key area of technology development.  

“There’s been major progress made over the last few years in energy storage, using all sorts of technologies. Batteries are well known but pump hydro, liquid air storage and all sorts of storage technologies are coming to the fore,” Matzner notes.

“What’s really exciting is the massive scale up of factory capacities over the last 10 years when it comes to solar photovoltaic (PV) panels, wind turbines and battery technologies. This has caused the price curve of these technologies to drop to an extent that it can compete today with any other energy source, and that’s really driving the rollout of renewable energy.”

An example of the exciting technologies are bifacial panels, which are increasing the performance ratios of solar PV plants from around 70% almost 90%. Wind turbine hub heights and rotor diameters are another.

“The turbines are becoming bigger and more efficient,” says Matzner. “Even offshore wind has become much more competitive and is being rolled out on a massive scale.”

Finally, there are developments around green hydrogen.  “One thing I never thought I would see in my life, is hydrogen becoming a commercially viable component in the energy system,” says Matzner.

“But we are seeing reductions in electricity costs from hydrogen and the likely scale up of electrolyser capacity will again reduce the costs.

“I think there’s a high likelihood that in the next five to 10 years we will see massive growth in the so-called green hydrogen markets and roll out of infrastructure.”

Matzner says this energy transition towards renewable energy-dominated supplies is fast becoming a reality: “It’s taken a long time. It’s been coming for the last 40 years, but I think over the next 20, 30, 40 years, we are certainly going to see massive jumps being made.” 

 

Shifting from coal
 

South Africa has a history of using coal as its main energy source, which presents specific challenges, notes Mjiyako. However, we are starting to see a shift, especially towards renewable energy.

“In the next few decades the power stations that Eskom own will start getting decommissioned. A lot of the gap [in providing power] is going to be filled by renewable energy sources and that makes me believe that going forward in the next few years we will see more renewable energy coming on stream,” he explains.

Mjiyako says this is mainly being driven by foreign direct investment, away from coal into more sustainable sources.

“I know that we always talk about getting investments into the country.  These particular plants are basically funded by commercial banks, and by sponsors and developers mainly from the developed world where they’ve actually demonstrated their experience in terms of developing these assets.

“So when you look at it from that perspective, when it comes to all that infrastructure spend, the pressure gets on the state and Eskom reduces, so that’s why I believe that we will start seeing more of these renewable energies coming on stream.”

When and how will it become a dominant supply of energy? “I think that we will see that in the next 15, 20 years, definitely,” says Mjiyako.

 

Can we manage the transition and leapfrog existing technologies?
 

To change an energy system takes a long time and requires meticulous long-term planning.

“It’s not just about building a wind farm or a solar farm or whatever it is,” Matzner points out. “It’s about how will you interface this infrastructure in such a way that it that it also makes use of the current infrastructure’s lifetime because massive investments have gone into that existing infrastructure and it needs to serve its lifetime out in terms of the African power system.”

He adds that most of South Africa’s coal and nuclear plants will go out of service by between 2040 and 2045. So it is for the next 25 years, where a meticulous plan will need to be carried out.

 

Public and private sector cooperation
 

Another factor is to create the right infrastructure, which requires cooperation between the public and private sector. “I fully agree that government control over the transmission grid is justified to allow access for everybody into the grid,” says Matzner. “But we need to leave the rest, that is generating power and distributing it to the private sector and public private partnerships.”

Mjiyako says there is some low-hanging fruit in the process of managing the transition. There’s talk about Eskom restructuring in terms of unbundling it into separate divisions. I think that will accelerate renewable energy coming on to supply directly onto particular customers (or even homes),” he says.

“I think the biggest challenge that we have is regulation.  Sure, you’ll always have regulations that will govern the environmental aspects (and some of the commercial ones) but to a certain extent we need movement towards amending this in terms of allowing those renewable energy sources to come on grid,” he adds.

 

How is renewable energy going to make a big difference in Africa? 
 

Building large power stations with large transmission grids is just not feasible in Africa and is also environmentally destructive. But Africa’s population growth dynamics could be a driver for all parties to come up with renewable energy solutions.

“Africa is the continent with the most diverse and abundant amount of solar, wind and hydro, and the land mass to produce biomass,” says Matzner. “We have enough of the right resources in Africa to supply the entire world with electricity, with liquid fuels, and so on.”

“In addition to this, if we were to focus on this vision of a 100% renewable energy strategy for Africa, it would provide us with the cleanest energy system on the globe and the most competitive energy system,” he adds.

Furthermore, if Africa can establish partnerships with technology suppliers from Europe, Asia and the US, it can create a manufacturing industry geared towards renewables, making solar panels, wind turbines, hydro systems and others.

“If that could be organised, it would be an administrative impetus for industrialising, not just in South Africa, but across the continent,” says Matzner.

Adds Mjiyako:  “If you look at a lot of our African economies, the major constraint is the consistent supply of electricity. I know that in South Africa we have our own challenges but in other countries, it’s much bigger and worse than we have here.”

“If you look at Zambia, Kenya or even Botswana right now, they are embarking on solar renewable energy supply that would also result in the benefits cascading down to other industries and other sectors within those economies,” he adds.

“Once we resolve this issue of electricity supply and make it predictable and consistent, I think a lot of African countries will start achieving their potential and it’s mainly going to be driven by the implementation of renewable energy”.

“That will allow us to construct those plants to support the grid. We’ve seen this in other countries as well as in Africa where they’re starting to do many grids. Some transmission lines may be a challenge, but putting in mini grids, this would also resolve the issue in many African countries.”

Africa’s energy transition may have a more profound effect on the economy than for example, the switch from fixed landlines to mobile phones, argues Metzner.

“The transition will produce a lot of new products and services. In my view, the abundance of clean and cheap energy will really help deal with those key challenges of humanity, of which we have many in Africa: energy security, water security, food security. If you can deal with those three things, then health, wealth and education will be sorted out as well.

“It is not just a pipe dream. It is now possible. The technologies are mature. They are commercially available. We have a really opportune time now with the next 30 to 40 years to make that that switch and make that happen.”

 

The views expressed in this podcast or not necessarily those of Revego Africa Energy Fund or a Revego Africa Energy Limited and do not constitute financial or other advice. Revego Fund Managers (Pty) Ltd. is an authorised financial service provider (FSP number 47561)