World Energy Assessment: Context for Sub-Saharan Africa - Background Paper

World Energy Assessment: Context for Sub-Saharan Africa - Background Paper

(introduction...)

1.  Background

2. Definition of Sustainability

b-Saharan Africa - Issues Affecting Sustainability

4. Similarities

5. Emerging Issues

6. Initiatives

7. Going Forward

Comments on The World Energy Assessment

25 - 26 January 2000, Nairobi, Kenya

1. Background

Development that would lead to a “sustainable” energy development is an admirable and desirable goal for every country in the world. Every country is interested in meeting its energy needs in ways that are affordable for consumers, secure from supply and price disruptions and environmentally acceptable. However, there are many complexities in the energy, economic and environmental policies and priorities of each nation that make this goal difficult or impossible without significant changes in current policies, programs and technologies.

The World Energy Assessment is intended to provide information and analytical background to policymakers and others to better understand energy’s relationship to sustainable development, and how energy can serve as an instrument of that goal. While this is a critical step in enabling countries to define their paths to sustainability, stepping back to look at smaller segments of the world can be a useful step towards reaching the larger end objective. Countries with common interests can collaborate regionally and sub-regionally on initiatives that will contribute to sustainability.

Sub-Saharan Africa is a good example of a region where diverse conditions will influence whether, when and how sustainable energy development can be expected to take place. This paper provides insights on the differences that exist among the regions and nations of Sub-Saharan Africa, common themes that can be used as building blocks for a sustainable energy development strategy, and obstacles facing development and implementation of such a strategy.

2. Definition of Sustainability

Although there is no common definition for sustainable development, the World Energy Assessment (WEA) defines it as “development that meets the essential needs of the present without compromising the ability of future generations to meet their own needs.” Further, the WEA defines “sustainable energy” as “energy used in ways that support sustainable development, in all its economic, social and environmental dimensions.”

Although these definitions are very broad in nature, they provide a valuable framework for discussion. Each country and group of countries will need to expand these definitions to reflect the specific situations and long-term objectives of each.

b-Saharan Africa - Issues Affecting Sustainability

Sub-Saharan Africa is a region with vast energy resources and energy potential. It contains some of the richest oil, gas and coal reserves in the world. It has large potential for renewable energy. Given the region’s large and growing population and low per capita energy consumption, it has the potential for significant energy demand growth. However, several issues prevent the cost-effective and efficient use of the resources. These issues can be categorized as follows:

· Inequitable distribution of resources. There exists an uneven distribution of energy resources throughout Sub-Saharan Africa. Although many countries have at least some oil reserves, the majority of oil production is from only a few (e. g., Nigeria, Angola, Gabon and Congo-Brazzaville). Similarly, the majority of natural gas is produced in western Sub-Saharan Africa from a few countries (e. g., Nigeria, Cameroon and Congo-Brazzaville). Coal is primarily found in Southern Africa. Even renewable energy, with its great potential in Africa, is unevenly distributed. For example, eastern Africa has tremendous hydro potential, but wind power has the most potential in many coastal areas, and central Africa has the greatest biomass potential. While almost every country has significant potential for photovoltaic energy, this potential varies area to area. These inequities lead to divergent policies, programs and interests among the countries.

· Lack of Infrastructure. Although energy resources are plentiful in some regions of Sub-Saharan Africa, the energy infrastructure to transport, distribute, transform and efficiently utilize them is lacking. While efforts have been made to improve the infrastructure, in large part, these are less than adequate to supply energy services to the majority of the population.

· Social Issues. Many social issues such as population growth, poverty, lifestyle and cultural issues, and urbanization, although potentially linked to sustainable energy development, can also run counter to energy sustainability. (Africa is experiencing the highest rate of urban growth of any continent/region of the world). Consideration should be given to developing initiatives that show the linkage between affordable, clean energy and economic development, education, poverty alleviation and quality of life advancement.

· Lack of Awareness and Financial Resources to Address Environmental Priorities. Although per capita use of energy in Sub-Saharan Africa is the lowest in the world, its energy-related environmental problems are very serious. Unsustainable forest practices are leading to deforestation and soil erosion. Inefficient use of traditional fuels for cooking are creating unhealthy conditions in residences. General lack of potable water creates serious health problems. In addition, decision-makers in many countries are not aware of the environmental problems or have other pressing issues (e. g., poverty alleviation, political instability, etc.), making environmental protection a low priority.

· Institutional Reform. Significant progress has been made in a few Sub-Saharan Africa countries in introducing competition, foreign investment and privatizing government petroleum operations. In addition very few have fully introduced such reforms in the electric power sector, due in part to the lack of institutions and qualified personnel to develop and implement improved policies. Therefore, in almost every country, energy prices do not reflect market prices and in only a few places do energy prices reflect environmental and other externalities. As a result, most energy decisions are not market driven, adding costs and inefficiencies that run counter to a sustainable energy future. There is also a greater need for transparency in regulatory structures and government organization.

· Pricing Policies do not exist in most countries in Sub-Saharan Africa. Energy subsidies are prevalent throughout the region. Lack of pricing policies, and more specifically, energy subsidies, drain precious resources, run counter to more efficient use of energy and further complicate the ability to attract foreign investment.

· Sluggish Economic Growth. Economic growth in Africa occurs at rates slower than Western and Asian countries. Sluggish economic growth makes demand for goods and services low, slowing the introduction and expanded use of clean energy options.

· Environment for Foreign Investment Lacking. Most of the Sub-Saharan Africa countries are deep in debt and unable to service many loans. Several foreign investments are receiving lower returns than needed to make them competitive. Political unrest adds significant investment uncertainties. As a result, it is becoming more difficult to attract foreign investment needed to provide adequate, reliable and sustainable energy resources to the population.

These issues create difficulties in setting and reaching consensus on goals to achieve energy sustainability in Sub-Saharan Africa.

4. Similarities

Despite the many issues and diversities, there are many common energy/environmental interests among all Sub-Saharan African nations that can be used as building blocks for approaching policies on energy sustainability. These include:

a) All have interest in economic development to help alleviate poverty. All recognize the need for, and the importance that energy plays in creating new jobs and improving standards of living, both essential aspects of sustainable development.

b) Many have expressed interest in and/or programs under way to create more market-based and competitive energy processes to the extent possible consistent with national development policies. As is pointed out in the draft World Energy Assessment, market-based pricing, competition, and the other attributes of reform are the foundation upon which sustainable energy programs are based.

c) Many have expressed interest in improved environmental protection. Although the priorities of countries may differ, reducing harmful pollution is a goal supported by all. Thus, developing economically viable strategies -- that reduce deforestation, improve the quality of drinking water and reduce high levels of air pollutants (like particulates, sulfur dioxide and nitrogen oxides caused by inefficient utilization of fuels in stoves and for other reasons) and address the control of carbon emissions -- is desirable. This is especially important for Africa where, based upon a World Bank study, food shortages and increased diseases from greater rainfall variability that can result from global climate change, could be significant.

d) Many have interest in expanding the utilization of natural gas and/or LNG. Natural gas is of interest because it can be found in many Sub-Saharan Africa countries. However, today very few of the countries produce gas (i. e., Nigeria, Cote d’Ivoire, Angola, and Gabon). In the case of Angola, most or all that is produced is flared. Investment in gas infrastructure is required take advantage of these resources.

e) Almost all of the countries in Sub-Saharan Africa have oil reserves and are producing oil. However, with the exception of the oil-exporting countries, lack of know-how, lack of domestic oil markets and lack of proper pricing and other policies, impedes the ability to attract needed investment.

f) All of the countries have interest in accessing technology for cleaner, more efficient and cheaper energy production, transport and utilization systems. However, many lack the wherewithal to conduct their own research and the human capital to maintain and manage modern technologies. In most of the countries, R&D budgets are non-existent because limited funds are used for more basic energy needs.

g) Most are interested in accelerated and widespread development of renewable energy to help meet their country’s needs. In Sub-Saharan Africa, tremendous renewable energy resources, large rural populations and current lack of large electric grid systems, is well-suited for use of renewable energy. In fact, biomass in various forms is currently the major energy source. However, poor biomass harvesting practices and inefficient utilization technologies are causing serious deforestation, erosion and other problems. Existing hydroelectric capacity has been impacted by seasonal droughts, and success in developing geothermal, solar and wind energy has been limited.

h) All can benefit from improved energy efficiency. As illustrated in Table 13, Chapter 6 of the WEA, the potential for improved energy efficiency, especially in household, industrial and transport sectors, is significant throughout all of Sub-Saharan Africa. For example, studies show that lack of reliable electricity supply networks creates need for individual generators, creating extra up-front capital costs for businesses.

5. Emerging Issues

All currently known energy options face continued pressures into the future. To ensure energy sustainability, solutions must be found to address them. For example:

a) Inability to attract foreign investment for oil development. Oil is produced by only a few countries. However, it is available in most. Although the major oil-producing countries of Africa have been able to obtain foreign investment for oil exploration, production, and transport, the majority of the countries have not. Until a conducive environment for foreign investment is created, and markets are found that are willing to pay market prices for it, this attractive revenue and energy source will not be available.

b) Natural gas is a clean and efficient energy option found in many countries in Africa. However, expanded utilization of gas requires more exploration, infrastructure investments and the introduction of efficient and economically viable end-use technologies.

c) Expanded use of renewable energy will continue to face cost pressures. There is great potential for use of solar, hydroelectric and wind energy in Sub-Saharan Africa to generate electricity (see WEA Chapter 5, pages 45-60). Reliance on biomass, the primary energy source consumed in Africa today, will continue to cause deforestation and other adverse affects unless it is produced and used more efficiently and cleanly. New technologies for the more efficient and economic use of biomass and other renewable energy options are needed.

d) Sustainable development requires energy access for all. However, only about 25% of today’s rural population (which comprise 70% of the total population in Sub-Saharan Africa) have any access to electric grids. Limited programs exist to expand access of the rural population to modern energy services.

e) Institutions to create and train personnel to implement energy policies are few in number in Sub-Saharan Africa.

f) The infrastructure to sustainably produce, transport and utilize energy is insufficient. Gas pipelines, electric transmission and distribution systems, modern end-use technologies, and other infrastructure are required to significantly develop Sub-Saharan Africa’s energy industries.

g) Regional cooperation in developing sound policies that will enable transfer of energy resources between African countries is needed. Electric power grid and gas pipeline interconnections, for example, could result in efficiencies that could reduce costs, increase foreign investment and improve service.

h) The private sector must play an increasing role in energy development in Africa. Government control of energy resources has proven to be less efficient than private sector petition reduces costs, attracts foreign investment, attracts appropriate technologies and results in better services.

i) Increased urbanization may exacerbate energy and environmental concerns. Unless planned and implemented properly, growing concentrations of people in cities, who require energy and other services, could result in accelerated deforestation, more severe pollution, in addition to other problems.

6. Initiatives

There are many initiatives under way in Sub-Saharan African countries to address several of the impediments to energy sustainability. Although they are diverse in nature, reflecting the diversity of the region, they offer good insights and lessons learned that can benefit other countries. Many of these are discussed in the World Energy Assessment. For illustration, some are summarized below.

a) Renewable Energy Initiatives

The increased utilization of renewable energy is an important element of a sustainable energy future. Renewable energy technologies have advanced dramatically over recent years; costs have been reduced significantly and performance has increased. Many renewable energy projects are now in use and/or under development.

Innovations have been undertaken in many African countries to bring modern techniques to use renewable energy in a sustainable manner. Some of the initiatives include:

Geothermal Energy

· Kenya currently generates from 10-20% of its electricity from geothermal energy (45 MWe installed). Efforts are also under way to develop other geothermal sites in the country.

Hydroelectric Power

· Major efforts to further develop Ethiopia's hydro resources are underway -- increasing installed capacity from 372 MW hydro in 1998, with 341 MW announced projects to be completed over the next 5 years.

· Other countries are also working to develop their own resources, e. g., Ghana, Kenya, Mozambique, Niger and Tanzania.

Photovoltaic

· Kenya has a high penetration rate of household photovoltaic systems. More than 80,000 systems are in place and annual sales are approximately 20,000 systems. This market operates without significant aid, subsidies or other forms of support (WEA, chapter 10).

· Shell International Renewables Ltd. and Eskom are investing $30 million in rural solar power development in South Africa from 1999-2001. This venture will provide stand-alone solar power units to as many as 50,000 homes currently without electricity, at a cost of about $8/month (about as much as these homes currently spend on less efficient fuels) (WEA, chapter 10).

· Other photovoltaic projects are also underway in Ghana, Mali, Niger, Sudan and Zimbabwe, for example.

Alternative Fuels

· Zimbabwe has a program that produces 40 million liters of fuel ethanol each year from sugar cane (WEA, chapter 7)

· A pilot program in Mali increased the deployment of diesel sets for electricity that by sharing costs with local women. This program’s emphasis is now is on shifting to cleaner biofuels to replace the diesel fuel. (WEA, chapter 10).

· Kenya is producing large quantities of alcohol-based fuels used as part of the transportation fuel mix.

Efficiency Improvements

· The World Bank has financed programs to disseminate jikos--efficient ceramic cookstoves--in Kenya, Uganda, Rwanda, Tanzania, Sudan, Ethiopia and Malawi. These efficient stoves direct 25-40% of heat to the cooking pot, as compared to only 10-20% delivered by the traditional metal pot cooked over a fire.

· The program was first implemented in Kenya, and now over 700,000 homes use the charcoal stoves, which are produced domestically, thereby providing a new product/revenue source for the country, as well as improving the environment because of significantly lower levels of pollution from these stoves.

· Fifty-two thousand of these stoves have been disseminated in Uganda resulting in shorter cooking times, reduced fuel consumption, and improved health.

Incentives

· Tanzania has offered attractive financial terms (e. g., 100% depreciation allowance in the first year of operation) for developing renewable energy.

· Other countries have also initiated forms of incentives, e. g., the Gambia, Mali, Nigeria, Senegal, Zimbabwe.

b) General Policy Initiatives Undertaken in Africa

Some Sub-Saharan African countries have taken steps towards sustainability. They have enacted laws and regulations, initiated pilot programs, established collaborations, and more, to create the institutional environment and understanding needed to achieve energy sustainability. For example:

Energy Assistance

· South Africa has sponsored successful clean and efficient energy assistance programs.

· A number of other countries are also interested in devising ways and means of insuring improved energy efficiency and the use of clean fuels.

Rural Electrification

· In South Africa ESKOM pioneered electrification programs to urban townships, rural homes and facilities, medical clinics and schools, with joint venture partners including Electricité de France and the UK regional electricity company East Midland. Between 1992 and mid-1999 over 2 million connections had been made. Between 1995 and 1998 over 320,000 urban homes and 855,000 rural homes were connected for electricity.

· Other countries have also initiated rural electrification programs, e. g., Ethiopia, Ghana, Kenya, Uganda, Zimbabwe.

Energy Privatization and Reform

· While most countries have state-owned energy industries, Côte d’Ivoire, Kenya, Ghana, Mali, Senegal, and other countries have move towards privatization and competition in their electric power sectors.

· Chad has created favorable policies for foreign investment in oil production by creating production sharing and full recovery of exploration costs on commercially viable oil discoveries.

· The World Bank is funding an energy development project in Ethiopia to improve the efficiency and sustainability of Ethiopia's power sector through institutional capacity building, rural energy development, and the construction of a hydroelectric power plant

Natural Gas

· Angola is developing strategies to reduce natural gas flaring and develop commercial usage of natural gas.

In addition, several organizations have been created to support Africa in its drive towards sustainability. For instance:

· The World Bank, in collaboration with the U. N. Economic Commission for Africa, has developed an Africa Live Data Base by working with local statisticians to improve the uniformity of collected data and statistical analysis to provide a clearer picture of trends and needs across the continent, and to monitor the impact of policy on development.

· "A Special Program of Assistance for Africa (SPA) was launched by the World Bank in 1987 to mobilize resources and coordinate support for economic reforms in Africa in response to the region’s severe debt and development crisis.

· The UN Special Initiative for Africa works with the World Bank, the UNDP and the UN Economic Commission for Africa to mobilize resources for sectoral development programs in education, health, and water supply, and cooperate on governance and the use of information (connectivity).

· The World Bank created the African Capacity Building Foundation in 1991, to develop capacity in economic policy analysis and development management

· The U. S. Overseas Private Investment Corporation (OPIC), has launched a $350 million New Africa Infrastructure Fund (NAIF) to support up to $2 billion in investment. OPIC also supports three private equity funds focusing on investment in Africa. These funds, the New Africa Opportunity Fund, the Modern Africa Growth & Investment Fund, and the African Growth Fund, total $290 million including private funds.

· The African Energy Commission, the Organization for African Unity and other regional entities are working to further the goals of sustainable development.

Lessons learned from these African initiatives provide assistance to other countries in focusing efforts to achieve sustainable development goals.

7. Going Forward

A broader range of issues and options for addressing them are discussed in detail in the World Energy Assessment. This background document, together with the World Energy Assessment, can be used as a basis for focusing discussions on the steps necessary for developing a sustainable energy strategy. Discussion at the regional workshop on Sustainable Energy can identify issues needing attention, the priorities of each issue and specific actions that can be taken to address them, either collaboratively between countries and/or by regions. Participants are encouraged to provide written comments, using the attached forms, if ments will be considered in discussions and policies initiatives developed in conjunction with the UN General Assembly meeting in 2001.

Comments on The World Energy Assessment

1. Provide comments of a general nature. For example, is the document complete? Does it adequately address the topics? Are areas overemphasized or under-emphasized? How can the WEA be improved?

2. In your mind (or that of the country you represent) what are the major issues that will impede sustainable energy development in your country and the world? For example, the following are highlighted in the World Energy Assessment. How would you prioritize these and additional issues not on the list?

· Uneven distribution of energy resources.

· Lack of energy infrastructure.

· Environment for foreign investment lacking.

· Lack of awareness and financial resources to address environmental issues.

· Social issues including lack of policies to provide energy access to rural regions.

· Lack of institutional reforms.

· Lack of access to advanced energy technologies.

· Lack of institutions and trained personnel to develop and implement energy policies and programs.

· Lack of regional cooperation to enable transfer of energy resources among countries.

· Increased urbanization.

3. Similarities exist in the interests and priorities of many of the African countries. Which of the following interest areas do you believe to be common to all/many African countries? How important are they? How can they be used to forge consensus on sustainable energy strategies?

· Poverty alleviation through the expanded and more efficient use of energy.

· Creation of market-based energy processes.

· Improved energy-related environmental protection.

· Expanding the utilization of natural gas.

· Expansion of oil production.

· Expansion of hydroelectric energy, biomass and other renewable energy options using modern, clean, efficient and affordable technologies.

· Energy/environmental technology transfer.

· Increased energy efficiency.

· Other

4. Initiatives are underway in many countries to use energy in a more sustainable manner. Several of these initiatives are summarized in this Background Paper. Are there examples of successful initiatives that you believe can be successfully expanded to other Sub-Saharan Africa countries? What are they? What conditions/steps are needed to expand their use more broadly throughout Africa?

5. What ideas do you have for elements of a framework for international energy cooperation (e. g., more efficient use of energy)? What initiatives to assist in the movement towards a sustainable energy future do you believe would have the most positive impact (e. g., education, training, financial support, research, etc.)? Which would be the least valuable? Why?

6. What additional comments do you have?

Please provide written comments to either Dr. Gururaja or Dr. Arungu-Olende:

J. Gururaja
United Nations
Room DC1-870
New York, NY 10017
USA
tel: [phone]
fax: [phone]
email: *****@***org

Dr. Shem Arungu-Olende
United Nations
Room DC2-2278
New York, NY 10017
USA
tel: [phone]
fax: [phone]
email: *****@***org