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The future of energy in East Africa: 20 years in the making

The energy industry is changing – the role of the utilities is evolving as IPPs become more prevalent, self-generation and off-grid solutions impinge on an industry that was once highly regulated.

Just look to East Africa, home to a thriving energy economy with a unique set of challenges and opportunities, to witness this ‘migrating’ industry.

The 20th edition of Future Energy East Africa is set to thoroughly explore the diversification of the region’s energy market; ESI Africa spoke with several members of the conference advisory board to gauge market offerings ahead of the conference taking place on 12-13 September 2018 in Nairobi, Kenya.

This article first appeared in ESI-Africa Edition 3, 2018. You can read the full digital magazine here or subscribe here to receive a print copy.

According to Eng Christopher Maende, deputy director of Kenya Power & Lighting Company, the global push for universal access to electricity is a determining factor in many countries’ energy planning – including Kenya where government is focussed on achieving universal access by 2020.

Christopher Maende’s watch list

• The role of minigrids especially in helping to achieve universal access has been highlighted and it is now clear that grid connected access may help to connect only up to 30% of households. The rest will have to be connected through minigrids. Unlike in the past where minigrids referred to grids in off-grid areas, there is an emerging trend of grid-connected minigrids. The Energy Regulatory Commission in Kenya is developing tariffs that will also cover such minigrids.

• Cost, stability and reliability of energy supply. Increased contribution of energy from thermal sources especially HFO diesel fired plants and Kerosene Open Cycle Gas plants has been cited as cause for increased cost of energy in Kenya and there is now increasing realisation that energy from new renewable technologies like solar and wind may be cheaper if firmed up through storage.

• This has largely informed current initiatives for hybridisation of off-grid stations and there are plans for HFO to gas conversions of existing HFO plants. Measures have been put in place to limit dispatch of HFO-fired plants whenever there are alternatives like hydropower and geothermal. In addition, the government has approved several PPAs for the development of solar and wind power plants by IPPs.

• While largely recognised that energy storage could help stabilise supply from intermittent sources like solar and wind, there are currently no incentives in Kenya to promote rapid deployment of these technologies. The Feed-In Tariff policy instrument, which governs development of renewable energy in Kenya, does not provide for energy storage.

• In the background, reducing the cost of energy from solar, and challenges of reliability of power supply, several manufacturers in Kenya and other businesses are in the process of considering development of solar power generating facilities for their own supply.

In some cases, the manufacturers are seeking to develop the facilities through Build Own Operate and Transfer (BOOT) arrangements.

Daniel Brose warns of bottleneck

Our next conversation is with Future Energy East Africa advisory board member Daniel Brose, founder and president of Songa Energy, who observes the most obvious trend in East Africa is that many new generation projects are filling the pipelines.

“Some are beginning to generate electricity, and with many more projected to come online in the coming decade. As a result, the clear bottleneck is projected to be lack of regional interconnectivity and insufficient distribution infrastructure in each country,” states Brose.

“If this bottleneck is not addressed, then new generation projects will not be approved and the pipeline will eventually run dry,” he stressed.

At the same time, we are seeing a growing emphasis and focus on minigrids – but these are largely very small and connected to micro-scale solar generation, with scalability challenges. As a result, we see a future trend developing whereby the private sector takes on concessions to distribute electricity in MW-scale minigrids.

As these minigrids get large and require base load generation, small hydropower (where possible) will be the preferred approach to power the minigrids.

Solid policies and codes are required to regulate these larger minigrids and generation projects that supply electricity simultaneously onto both the national grid and the private minigrids.

Ralph Nyakabwa-Atwoki on hydropower

Looking back on future planning, Ralph Nyakabwa-Atwoki, technical director of Sustenersol Uganda, exclaims that at 23 years of age during his engineering training, the constructed commissioning of Owen Falls Hydropower Station (now Nalubale) was “an example of planning for the future national electric energy needs”.

According to the engineer, regional trends include the formulation of policies embracing renewable energy, awareness and mitigation of effects of greenhouse gases and climate change and unprecedented international and bilateral programmes availing multimillion financial resources for the development of energy resources.

The general challenges affecting hydropower in East Africa:

• Uncertainty of weather patterns that have seen rivers run dry during severe droughts and alternating with equally severe flooding and bursting of dams and river banks;

• Uneven development and distribution of technical and expert human resources for hydropower projects;

• Lack of long-term pertinent data – for example, river flows – where existing data is not updated or hindered by the unavailability of modern analytical, laboratory and field data processing equipment; and

• Regional disharmony in sharing and developing dams on the River Nile.

Nyakabwa-Atwoki adds that there is need for harmonising hydropower policies to ensure even development transpires and he raises the need to address the question of national mind-set. “There are statutory agencies and public sector officials who stick to an outdated outlook of energy development.”

Wim Jonker Klunne talks tech

The energy sector in the region, and in particular the renewable energy sector, is very much in a flux, states Wim Jonker Klunne, lead coordinator of the EEP Africa Trust Fund. “In the region, most governments have set targets for universal access to energy.

But we all know that, to say the least, these targets are very ambitious. If providing energy access will be based on extending the national grid only, I really doubt whether those deadlines will be met.”

On a positive note, Jonker Klunne spots signs of discussions underway between government and private sector on how they, together, can advance this access to energy.

“From EEP Africa we have supported more than 200 projects in Southern and East Africa that prove private sectors can play a significant role in providing basic energy access.”

Based on the EEP Africa supported projects, the fund has witnessed a wide variety of technologies being applied in East Africa. “Ranging from the typical solar PV products to minigrids powered by biomass and small hydro indeed. Most of the innovations we see are related to how the specific renewable energy technology is being managed and how it interfaces with for example ICT solutions.”

The region is clearly taking the lead in the use of mobile payment solutions in the provision of energy, allowing customers to make small payments to their energy service providers.

In general, Jonker Klunne advises that the future lies in combining technologies: “Clever business models that take advantage of new developments in mobile payment, remote access, ICT and big data, and that are able to combine that with suitable technical energy solutions, is where our future lies.”

From the advisory board members’ insights, it is clear that the level of dialogue ESI Africa will uncover at the conference in September will prove highly informative on these emerging trends. ESI

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This article first appeared in ESI-Africa Edition 3, 2018. You can read the full digital magazine here or subscribe here to receive a print copy.