ReviewAn indicative analysis of investment opportunities in the African electricity supply sector — Using TEMBA (The Electricity Model Base for Africa)
Introduction
Access to modern energy services is extremely low in a number of African countries, particularly in Sub-Saharan Africa. National electrification rates vary greatly from country to country; for instance, this figure is at 85% in South Africa, while it only reaches 3% and 4% in Central African Republic and Chad respectively. Even within countries, there is great disparity between urban and rural communities; electrification rate in Cameroon ranges from 88% for urban and 17% for rural communities. At the same time, demand of electricity on the whole continent is projected to grow from 385 TWh in 2012 to about 1250 TWh in 2030 and 1870 TWh in 2040. This corresponds to an average annual growth rate of 4.6% in Sub-Saharan Africa, while it reaches 7.6% and 7.1% in East and West Africa respectively (IEA, 2014).
The electricity supply sector in Africa faces two major challenges; (a) to improve access rates and (b) to cope with the rapidly increasing demand for electricity. Extensive investments in generation, transmission, and distribution are needed to address these two challenges. There are a large number of publications that examine the issue of the underdeveloped African power sector. Some provide an overview of the current status of the system and recognize the problem (Eberhard et al., 2008), others argue for action and call for the necessary investments (Eberhard et al., 2011, Foster and Briceño-Garmendia, 2010), while others focus on the required measures and investigate scenarios that will enable universal access to modern energy services (Bazilian et al., 2012, Brew-Hammond, 2010). Relevant to this latter point, a comprehensive review of African energy policies pertaining to sustainable energy development has been conducted to examine whether existing policy making is heading in the right direction (Mandelli et al., 2014). Long-term explorative scenarios have been used by the World Energy Council to conclude that besides introduction of appropriate energy policies, an environment that can attract internal and external capital and innovation is important (Panos et al., 2015). The International Renewable Energy Agency argues that renewable energy integration can reduce the continent's generation cost (IRENA, 2012), while smart-grids are also suggested as way of leapfrogging traditional power system design and accelerating the achievement of electrification targets (Welsch et al., 2013).
The United Nation's Sustainable Energy for All and U.S. President Obama's Power Africa Initiatives offer important impetus. The former has the goals of increasing energy access, improving energy efficiency and doubling Renewable Energy Technology (RET) investment (SE4All, 2015). The latter has similar goals. It focuses explicitly on Africa. It aims to electrify some 60 million homes and support the investment of 30 GW of clean power generation (Power Africa | U.S. Agency for International Development, 2015). As of yet, however, there is no coherent ‘by country’ and ‘by region’ set of investment scenarios, nor an open long-term energy planning toolkit that may be used to investigate detailed scenarios.
The purpose of this paper is to examine the potential for and relationship between electricity investments and power trade between countries in Africa, making use of a higher geographical resolution than what has been developed previously (Taliotis et al., 2014a). An open source long-term cost-optimization tool is used to estimate the most economic generation technology mix on a national scale. Two key scenarios, in which the transmission system is either limited to existing and committed projects or expanded, allow the identification of countries with the greatest export potential, as well as those with the largest expected demand for cost-competitive electricity. Beyond the substantial fossil fuel reserves present in specific regions of the continent, there is considerable renewable energy potential (IRENA, 2014), which largely remains unexploited due, in part, to the lack of required infrastructure. This paper identifies areas where extensions would be required in the grid network, so as to unlock part of this potential, thus leading to a cost-optimal growth of the African electricity supply system. Despite the potential for electricity exports from North Africa to Europe (Trieb et al., 2012), the paper's scope does not consider this aspect and only focuses on intra-continental electricity exchanges.
Methodology section of the paper briefly presents the methodology and the adopted model structure. The main results from the selected scenarios are presented in Results and discussion section, where there is also a discussion on the main energy-planning insights offered by the analysis. The paper concludes with a summary of the key outcomes in Conclusions and suggests future steps and model enhancements to build on existing research efforts.
Section snippets
Methodology
The work presented in this paper builds on previous efforts in terms of research scope and model structure (Taliotis et al., 2014a). The following sub-sections describe the methodology followed to develop and apply TEMBA, a model of the African electricity system. The methodology includes details on the model structure, the modelling tool used, and the key assumptions. Further, the model from source code to data is open source to ensure repeatability and access.
Generation capacity
As a result of the underdeveloped power supply on the continent and the rapidly increasing demand in electricity, investments in power generation capacity are needed. As shown in Fig. 2, total installed capacity in Africa grows from 177 GW in 2015 to 520 and 527 GW by 2030 and 772 and 773 GW by 2040 in the Reference Trade and Enhanced Trade scenarios respectively.
Significant additions are made in all power pools but, comparatively, the most substantial expansion is achieved in Central Africa,
Conclusions
The work presents indicative coherent national, regional and continental investment and trade scenarios for Africa. Continuing current trends and assuming an efficient market, RET investments (including large hydro) of between 573–589 GW are anticipated. Significant efficiency gains can be achieved by increasing trade and transmission investments. Comparative RET investments are anticipated to account for 77% and 79% of new investment in the Reference and Expanded Trade scenarios respectively.
Acknowledgements
Financing from the Vetenskapsrådet (Swedish Research Council) (621-2014-4964), Swedish International Development Cooperation Agency (Sida) (51050071/11) and ABB is gratefully acknowledged. Collaboration with the International Renewable Energy Agency (IRENA) and the World Bank were essential in developing this effort and are sincerely appreciated. Interactions with Dolf Gielen, Asami Miketa, Nawfal Saadi, Vivian Foster, Raffaello Cervigni, Morgan Bazilian and Holger Rogner have been
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