In many sub-Saharan African countries, urban access rates are relatively high – and in these settings, the primary issue is poor reliability. This calls for analysis into the causes and consequences of power outages and the ways in which policy makers can address them.
Several research projects being carried out by the Energy and Economic Growth (EEG) programme, funded by the UK’s Department for International Development (DFID), are investigating ways of improving the reliability of electricity systems. Simon Trace, EEG’s programme director, explains more.
Low electrification rates affect livelihoods and economic growth, so many investment programmes in developing countries understandably aim to deliver new connections. However, as more people gain access to electricity, it is important for policy makers to understand the quality of that access.
While urban electrification rates in some sub-Saharan African (SSA) countries are relatively high (over 75% in some cases), the quality of the service is often low and unreliable. The latest Afrobarometer survey from December 2019 suggests that fewer than half (43%) of Africans enjoy a reliable supply of electricity. Homes and businesses connected to the grid are plagued by unplanned, unpredictable power outages (blackouts) that are often lengthy (lasting hours, sometimes days), and voltage fluctuations (brownouts). They must also endure scheduled and controlled electricity shutdowns (loadshedding), where power is unavailable for a few hours each day – a situation being experienced in South Africa, Zimbabwe and Zambia in particular.
Reliability issues are typically related to the capacity and quality of electricity systems. They can be a result of insufficient generation (the installed generation in most SSA countries is below the total potential electricity demand) or a generating mix that’s incapable of scaling up and down to meet fluctuations in demand.
Other problems include maintenance requirements; network fragility, which can lead to breakdowns on transmission and distribution (T&D) lines, and in transformers and other equipment; or T&D networks having insufficient capacity or flexibility to deliver generated power to end users.
The impact of unreliable electricity
If electricity is unreliable, the gains from expanding access will be limited. Poor reliability is thought to suppress demand for welfare-improving and income-generating electrical appliances, such as fans, refrigerators, sewing machines and production machinery, and will reduce the output from existing appliances – constraining the economic wellbeing of households and businesses.
Unreliable electricity across Africa hinders entrepreneurship and job creation, is thought to reduce the probability of employment, has an impact on education, and, by increasing the labour intensity of domestic chores, can also inhibit the participation of women and youth in the workforce. Meanwhile, voltage fluctuations can affect or damage commercial and industrial appliances and healthcare equipment.
The cost to business and the economy
For businesses, unreliable electricity results in increased running costs and reduced productivity and profitability, hampering growth and limiting employment opportunities. Indeed, in many SSA
countries, frequent power cuts are crippling industrial and service sectors. According to 2018 World Bank Enterprise Surveys (WBES) data, in a typical month, firms in SSA experienced 8.9 power outages. The 2013 WBES found that 61.2% of businesses in Ghana see electricity reliability as a major constraint, with firms reporting an average of over 700 hours of outages annually. In comparison, UK businesses face just 0.1 disruptions to their electricity supply each week, typically lasting less than one hour in total.
Studies suggest that in Zambia, loadshedding resulted in job and economic losses in the manufacturing sector, and voltage fluctuations and unexpected outages damaged industrial machinery. Meanwhile, in Ethiopia, power outages increased firms’ cost of production by 15%. Results from the 2015 WBES for Ethiopia suggest average losses due to electrical outages equate to 6.9% of annual sales among large firms.
For some businesses, spending money on backup generators becomes a necessity, reducing the amount they can spend on more profitable investments. In SSA (excluding South Africa), installed backup capacity is twice that of the grid. Electricity produced from generators is significantly more expensive than grid electricity; in Ghana, the cost of self-generated electricity is on average 322% more than the cost of electricity from the public grid.
Economic losses due to power interruptions are estimated to cost between one and five percent of GDP of countries across SSA. It’s been widely reported that South Africa’s recent rotational loadshedding has threatened the country’s economic growth. One report suggested it could have cost the economy as much as R5 billion a day, and GDP was forecast to grow by less than one percent last year. Poor reliability also impacts hospitals, telecom systems and government buildings – all of which are important to economic development.
Challenges to delivering reliable electricity
To deliver a reliable supply of electricity, utilities require significant ongoing investment. In many developing countries, however, there are limited resources available to maintain and upgrade aging infrastructure. Subsequently, an unreliable supply hampers a utility’s potential to generate revenue. High-capacity, reliable electricity boosts the ability and willingness to pay for consumption; a study in Ghana found that firms would be willing to pay 12.6% more for uninterrupted electricity access.
Furthermore, electricity tariffs tend to be set below cost-recovery levels (in Nigeria, for example, revenue currently covers approximately only 35% of total distribution company costs). Inaccurate meter readings, non-payment of electricity bills and theft (through meter tampering or directly tapping into electricity lines) make revenue collection challenging. Utilities also need fine-grained information about grid performance. But, with a lack of sophisticated measurement and data collection tools, many won’t know there’s been an outage unless a customer reports it, and won’t know when it started or how long it lasted, how many customers were affected, or what fix may be needed.
In addition, utilities face an evolving landscape, with increasing amounts of intermittent, variable renewable generation potentially impacting system stability. Independent Power Producer (IPP) agreements are also becoming common, and new tariff and market structures are being utilised. The scope of these problems and challenges is not currently well understood – but, fortunately, there is growing interest in the quality of on-grid electricity. Electricity access remains a fundamental issue for developing countries, but attention also needs to be paid to reliability of supply and the operations of the utilities tasked with the day-to-day delivery of on-grid electricity. In order to make improvements, many challenges and knowledge gaps need to be addressed.
Several EEG projects are addressing knowledge gaps and are investigating ways of improving reliability.
Measuring electricity reliability
A team from the University of California, Berkeley, has developed and deployed a suite of remote sensing devices, collectively called GridWatch, to measure power outages, voltage fluctuations and frequency instabilities across households and businesses in Accra, Ghana. The team has assessed how reliability data can inform and improve grid infrastructure decisions, and has started to develop rigorous measures of the socio-economic impacts of poor reliability and voltage fluctuations.
The effect of smart metering
Led by the University of Chicago, this project is evaluating the ability of smart metering with prepayment to break the cycle of low payment leading to restricted and low-quality supply. It aims to answer whether such technology can improve cost recovery, and thereby energy reliability and access.
Monitoring and assessing power quality
In Ethiopia, there is growing interest in the quality of voltage and current at customers’ points of connection, due to the numerous industrial customers and recently emerging industrial parks. In this project, Mekelle Institute of Technology at Mekelle University is assessing the current power quality profile of Ethiopia, investigating the occurrence, causes and consequences, and will propose optimal solutions for various power quality issues for different types of customers.
The Ethiopian government is revising the existing tariff rate structure to achieve cost recovery and help incentivise private sector participation in the power market. The main focus of this research project, led by the Environment and Climate Research Centre at the Policy Studies Institute, will be micro-and macro-level analysis of the reform.
The team is also investigating energy audit programmes, prepaid metering, and the barriers and opportunities for private sector participation in the power market via tariffs/pricing reform and other policy mechanisms.
It is critical that health checks are performed on dispatch practices not only to reduce costs, but also to explore ways to introduce much-needed flexibility so that variable renewable energy can ramp up rapidly without jeopardising system reliability. The Power Systems Planning Group, part of the World Bank’s Energy Sector Management Assistance Program (ESMAP), is conducting a dispatch optimisation study in Nigeria and in Pakistan. ESI