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Renewable energy/energy efficiency policy study Report

By

AFREPREN/FWD


EXECUTIVE SUMMARY

Africa is endowed with substantial renewable energy resources. The region has an estimated 1750 TWh/year of hydropower capacity, 9,000 megawatts of geothermal potential (hot water and steam based), abundant biomass, and significant solar and wind potential (Karekezi and Ranja, 1997; IHA, et al, 2000; BCSE, 2003; Hydro4africa, 2008; Nepad, 2003; Bartle, 2008).

If successfully exploited, renewables can contribute to addressing two key challenges of the energy sector in Africa, which are at the forefront of policy makers’ list of priorities: provision of improved and modern energy services to the majority of the population, who are poor; and power unreliability and risks associated with over-reliance on imported oil and hydro power.

Renewables can contribute to poverty alleviation and assist in addressing the Millennium Development Goals (MDGs), while providing modern improved energy services to the poor. This is particularly true of small-scale renewable energy technologies that are made locally and operate on the basis of small scale solar, thermal, wind or animate power options. Such systems can not only provide energy that is affordable to the poor but can also be a source of employment and enterprise creation for both the rural and urban poor in the Eastern and Southern Africa.

The report looks closely at the renewable energy sector in the CABURESA project countries with particular emphasis on policies on renewables. The governments, private sector, donors and renewable energy practitioners should all work towards ensuring an enabling environment for renewable energy development, by identifying and putting in place favourable policies to strengthen renewable energy, especially now with the advertently increasing oil prices.

Section 2 of the report gives an overview of the renewable energy in the CABURESA project countries. This section is divided into two: The energy provision and the potential of renewable energy by country. The energy provision includes data on: main fuel sources for direct use and power generation, degree of reliance on imported energy; extent of connection to electricity network (households and businesses; rural and urban); capacity concerns (power generation and/or transmission/distribution) and the potential for renewable energy and energy efficiency. The third section of the report attempts to answer some critical questions like existence or not, of an explicit energy policy framework (e.g. a recent White Paper) and key policies (e.g. privatization, liberalization, rural electrification plan etc); what role is envisaged for sustainable energy and the fourth and last section provides key lessons that can be discerned from supportive renewable energy policy in the CABURESA project countries.

Kenya’s energy picture is dominated by predominant reliance on dwindling biomass energy resources to meet energy needs of the rural households and a heavy dependence on imported petroleum to meet the modern sector needs. Biomass energy sources account for 68% of the total national energy consumption, followed by petroleum – 22% and electricity at 9%. Kenya relies heavily on imported petroleum for local consumption. In 2007 Kenya imported 57,000 bbl/d of crude oil.

Kenya has between 4-6 kWh per square metre per day of solar insolation which offers huge potential for solar projects. Kenya’s wind speeds average between 3-10 m/s. The estimated installed capacity from wind generated power is 0.55 MW. It is estimated that about 300-350 wind pumps have been installed in the country. The technical potential for geothermal energy is estimated at about 3,000 MW but only 127MW has been exploited.

In Kenya the Energy Act of 2006 was enacted into law by the president on 30th December 2006. Sessional Paper No. 4 of 2004 laid down the policy framework for the promotion and development of renewable energy sources. Under section 6.6.6.4 (ii) the government is required to enforce usage of solar water heating and natural ventilation in all new buildings where technically feasible; and amend building by- laws under the Local Government Act, Cap 265 to make it mandatory in urban areas to include solar hot water systems in building designs. In section 7.1.4 (5) it is government policy to increase market penetration of renewable energy systems.

Tanzania’s energy sector is characterized by a low per capita consumption of commercial energy (petroleum and electricity), and a large dependence on biomass energy (in form of firewood, charcoal and agricultural waste).The energy balance of Tanzania shows that biomass use accounts for over 90% of energy consumption. Petroleum and electricity account for about 8% and 1.2% respectively, with the remaining 0.8% coming from coal and other renewable energies (IEA, 2003). About two-thirds of electricity generation in Tanzania is from hydro (both large and micro). Other sources are diesel oil, imports (from Zambia and Uganda), coal, biomass, and to a minor extent, solar photovoltaic.

The application of renewable energy technologies in Tanzania is at various stages. The focus is on wind, solar, micro/mini hydro and biomass, since it is felt that these technologies are the ones that could most easily be disseminated in the short term. Geothermal energy also has a potential in Tanzania, although it may not be exploited for some time due to the high development costs.

The national energy policy formulated in 2003 supports research and development of renewable energy and also promotes the use of efficient biomass and end-use technologies. The Government is implementing an extensive restructuring of the electricity sector in order to attract investment and increase efficiency. In the new electricity industry structure, TANESCO will be divided into separate segments responsible for power generation, transmission and distribution. Generation and distribution activities will further be divided into a number of companies to allow private participation and competition in those areas.

The energy sector in Uganda is dominated by traditional energy sources, especially biomass. An energy balance analysis carried out by the Ministry of Energy & Mineral Development in its Annual Report (2002) indicates that biomass is still the dominant source of energy in Uganda, with a contribution of 92.3 % of total energy consumption. This is followed by petroleum products, which contribute 6.4%, and electricity, which contributes only 1.3%. The annual energy consumption is estimated to be 20 million tonnes of wood, 430,000 tonnes of oil products. All petroleum products are imported. These products account for a significant percentage of the country’s per capita income. The petroleum import bill is estimated at USD 160 million per year. This constitutes about 8% of total national imports and represents slightly above 20% of total export earnings, oil imports stood at 10,870 bbl/day (2004). Uganda has a great deal of potential for several types of renewable energy resources, most of which have remained unexploited. Most notable potential energy resources include: geothermal, biomass, solar and wind. In spite of this large potential, the country has been experiencing a growing deficit in power supply during the 3rd quarter of 2004 caused by an unexpectedly long drought that hit the country in the middle of that year.

There is a national energy policy which was formulated in 2002, and seeks to promote the use of renewable energy technologies.

Zambia’s commercial energy use has risen gradually from 3.9 million tons of oil equivalent (TOE) in 1971 to 6.2 million TOE in 2000. In terms of consumption, households mostly consume wood-fuel while commerce and industry (particularly the mines), are the dominant consumers of petroleum, electricity and coal. In 2004, it was estimated that wood-fuel accounted for over 70% of total national energy consumption in Zambia. Households accounted for about 88% of wood-fuel consumption and it is reported that cooking and heating are the major household uses of wood-fuel.

Electricity is the second most important energy source after woodfuel contributing 10% to the national energy supply. The country’s hydropower resource potential stands at an estimated 6,000 MW while the installed capacity is a mere 1,786. Hydroelectric plants represent 99.5 percent of electricity production in the Zambia with the major sources being Kafue Gorge, Kariba North Bank and Victoria Falls Power Stations. The other 0.5% is complimented by thermal. With a projected electricity demand growth estimated at 100 MW per annum, the country has already started experiencing power deficit.

Zambia is richly endowed with a wide range of indigenous energy sources, particularly woodlands and forests, hydropower, coal and renewable sources of energy. Petroleum is the only energy resource that is currently wholly imported. Renewable energy sources are increasingly being used but still remain insignificant in terms of contribution to the total national energy supply. So far, there are only a few projects in application of solar energy (photovoltaic and solar water heating) and biogas, mostly supported by international donors on a full first cost grant basis.

The first National Energy Policy (NEP) formulated in 1994 sought to promote optimal supply and utilization of energy, especially indigenous energy forms, for socio-economic development in a safe and healthy environment. While the essence of the 1994 Energy policy objectives remains valid, the social, political, environmental and economic situation has undergone significant changes. The National Energy Policy has also been revised and the draft was published in 2007.

Mozambique has vast energy resources that have considerable potential for national energy intensive industry and for export, including hydropower, gas, coal, and perhaps petroleum. The energy sector in Mozambique is characterized by abundant resources with generally a low level of exploitation and internal use. Forest resources provide more than 85% of the energy requirements overall and more than 95% in rural areas.

Mozambique has a huge potential in all fields of renewable energy that can play an important role in the process of development of the country. However, very little research has been done to assess these opportunities and to define supporting strategies, policies and adequate financing. Local capacities to design, market, finance, install and maintain RE technologies are notoriously scarce and there is no dedicated and significant external assistance schemes acting in Mozambique to fill up the gap.

The legal energy policy and planning framework in Mozambique is comprised of three formal and one unofficial document. The main policy document is the National Energy Policy (1998). The Government's Energy Policy is straight-forward and provides a clear statement on the need for providing energy to the household and productive sectors, building capacity and improving management in the sector, increasing exports and efficiency, and other relevant matters.

The key recommendation is that government, private sector, donors and renewable energy practitioners should all work towards ensuring an enabling environment for renewable energy development, by identifying and putting in place the aforementioned prerequisites. Once the pre- requisites are in place, subsequent policies, incentives and supportive measures for renewable energy are likely to succeed. The pre-requisites provide the framework for implementation of key supportive policies measures such as:

  • Long term financing mechanisms
  • Incentives and attractive pricing for renewable energy (Standard Power Purchase Agreements (PPAs) and Feed-in tariffs and price per litre)
  • Targets for Renewable Energy
  • Other supportive measures

This paper is available on an exchange basis. If you find it to be useful, we encourage you to send us any relevant publications from your organization. To request for the full paper, please fill in the publications request form

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