A new report exploring recent developments in the clean energy sector in southern and eastern Africa shows market entry is challenging and requires targeted awareness-raising activities, increased financial inclusion and access to financing.
EEP Africa used data collected from a call for 2020 proposals, their annual survey and active portfolio to develop its 2020 Market Report Productivity and Circularity in the Clean Energy Sector. The report looks at three rapidly developing areas of the clean energy market: the evolution of productive use of energy (PUE); role of clean energy in a circular economy; and impact of COVID-19 on early-stage companies.
The EEP Africa 2020 call for proposals, Clean Energy Powering Green Growth, attracted 357 applications. These proposals included a range of agricultural processing and waste-to-energy projects, solar irrigation and cold chain solutions, e-mobility technologies and mini-grids with integrated PUE solutions.
This year’s call demonstrated strong market interest in PUE solutions as well as the continued need for grant funding to test and demonstrate clean energy innovations, products and business models. Though the quality and range of PUE appliance is growing, market entry is still challenging. The PUE appliance market often requires target awareness-raising activities, increased financial inclusion and access to financing.
The call for proposals also showed clean energy can be produced from a wide variety of agricultural and municipal waste, with some innovative strides in business models and public-private partnerships.
Resilient business measures adopted in 2020 may become permanent
These project also have the potential to produce important climate adaptation and resilience co-benefits. EEP Africa’s new study on climate co-benefits, Energising Resilience explores the climate adaptation and resilience co-benefits achieved through early-stage clean energy projects.
EEP Africa Portfolio Coordinator Chiedza Mazaimwana: “Clean energy projects also address climate change when they promote environmental protection, human health and safety, job creation and more importantly, help smallholder farmers build climate resilient value chains through productive use.”
The COVID-19 pandemic has overshadowed all activities this year and had a significant impact on clean energy companies. The biggest challenge stemmed from restrictions on movement of people and goods, which blocked supply chains and impeded sales and distribution. The pandemic demands ingenuity and resilience from companies and investors and some of the mitigation measures adopted during 2020 may evolve into lasting business solutions.
The developments have also highlighted that the clean energy sector in Africa needs to develop strong local capacity and be more inclusive. Local and women entrepreneurs as well as youth can play a larger role in the sector as leaders and change agents.
EEP Africa Knowledge Manager Tracy Dolan: “The pandemic has highlighted the need to strengthen local capacity. Resilient infrastructure depends on more off-grid energy products and systems being produced, assembled and restored in Africa.
“Clean energy know-how also needs to be more inclusive, with targeted outreach and support for women and youth entrepreneurs,” said Dolan.
Access to clean energy solutions benefit community and households
2020 has been challenging for businesses and people and it is still unclear whether businesses will return to normal or move towards a new model of production and consumption. The 2020 Market Report Productivity and Circularity in the Clean Energy Sector indicates that the businesses able to innovate and adapt will have greater potential to achieve commercial viability and lead the clean energy sector onto a path of sustainable and inclusive growth.
Energising Resilience Report Climate Co-benefits from Clean Energy Projects points out enhancing access to clean energy is generally approached through the lens of climate change mitigation. The potential for clean energy to support climate adaptation and resilience is robust and in some cases stronger than the link to mitigate. The portfolio analysis conducted in this report found many examples of climate co-benefits at community and household levels.
Lead researcher for the EEP study, Julia Larkin: “Discussions about linkages are often at the policy level, not on the level of what’s working or not working on the ground. But many developers are already naturally evolving towards projects with increase climate co-benefits as they explore more viable business models and look at the local needs.”