Plugged in to promising potential
Small-scale renewable energy projects have increasingly become a solution to alleviate Africa's energy access challenge
Africa has a vast wealth of resources for its sustainable development. It holds considerable renewable energy potential, including solar, hydro, wind, and geothermal energy sources and has the capacity to produce a large amount of hydrogen. The continent also boasts considerable deposits of raw minerals used in new energy technologies for electric vehicles, stationary energy storage, and green hydrogen (GH2) production, including cobalt, manganese, platinum, palladium and graphite, among others. Nevertheless, energy poverty remains a concern across the continent. Of the world's estimated 800 million people without access to electricity, 600 million are in sub-Saharan Africa. Poor access to reliable, affordable and sustainable energy has become a serious hindrance to economic and human capital development across Africa.
Small-scale renewable energy has increasingly become a solution to alleviate Africa's energy access challenge. A transition to cleaner energy sources will enable Africa to bridge the development and industrialization gap left by decades of energy poverty, provide needed energy services without damaging human health or ecosystems, and leapfrog traditional electricity models by promoting off-grid and mini-grid energy solutions for greater accessibility.
Several factors hinder renewable energy development in the region. The primary one is the lack of an enabling policy environment. Several African countries have no specific renewables policies, while others have dedicated policies that are outdated. Even when policies are effective, implementation may have been inadequate due to weak governance structures and poor handover systems for changes of administration. For businesses, navigating governmental approvals for permissions and consent has been a challenge, and projects could be plagued by delays and cost overruns.
Related to the inadequate policy environment, many African countries have limited investment in electricity infrastructure, particularly in generation capacity, distribution networks, and maintenance, which in turn leads to a combination of low energy supply and high electricity costs. Between 2010 and 2020, Africa received only 3 percent of global energy investment, with 0.5 percent of this investment in transmission and distribution networks. It is estimated that at least $25 billion in electricity grid, generation, and off-grid solutions investment is required annually to eradicate energy poverty in Africa by 2030.
Inadequate management and technical capability also make implementing new technologies difficult. There has been a shortage of project and system design, installation, and maintenance skills across many African countries. For instance, projects involving renewable energy technologies require not only initial installation but also ongoing maintenance, which can be technically demanding. Local personnel may not always have the training or the technological background needed to manage these systems effectively, which can lead to underperformance or breakdowns.
Over the years, China has become a major powerhouse in the field of renewable energy, leading the global energy transition. Its investment in clean energy has ranked first globally for many consecutive years, and its installed capacity of hydro power, wind power and photovoltaic power generation is also in a leading position. This technological advancement has become a new engine of China's development cooperation with other countries in the Global South.
The green Belt and Road Initiative and the Global Development Initiative have both highlighted climate change and low-carbon and green development. The export of Chinese photovoltaic modules and wind power equipment exemplifies a robust strategy to disseminate sustainable technology and supports African countries in increasing their utilization of renewable energy sources. China has also gradually shifted its investment focus toward green energy projects in Africa. According to the Boston University Global Development Policy Center, China has financed over $13 billion and developed over 10 gigawatts of clean energy capacity across Africa since 2000. Chinese investments in renewable energy in Africa grew at an average annual rate of 26 percent from 2010 to 2020, with solar, hydropower and wind being the top three technologies.
China has also adopted an approach of integrating capacity building with technology transfer to help overcome capacity constraints in Africa. This involves not only providing the technology but also training local technicians and engineers in its maintenance and operation. Projects include construction of low-carbon demonstration zones, climate change mitigation and adaptation projects, and local personnel capacity building. For example, the China-Africa Clean Energy Technology Demonstration Centre in Kenya showcases clean energy technologies such as photovoltaic, wind power and biomass energy, and provides technical training and advisory services to African countries. The China-Africa Green Development Fund provides financial support specifically for green technology projects in African countries. These programs ensure that the transfer of technology goes beyond mere installation and helps create a knowledge base within the community. Such a knowledge base can sustain these initiatives independently, thereby addressing one of the critical barriers to the success of green projects in the region.
To further improve the scale and effectiveness of renewable energy cooperation between the two sides, China can forge a new cooperative model with multiple activities to produce more enduring impacts than stand-alone projects.
First, China should improve communication with Africa via multilevel and multidimensional channels. The role of think tanks, businesses and civil society groups should be strengthened. This would help comprehend the heterogeneity of the continent and the disparities in the difficulties faced by each country, which are not all uniform, and significantly enhance China's involvement in African countries' energy section beyond individual project level interactions. It will also allow China to play a more active role in renewable energy consultancy or advisory, capacity building programs, and dedicated efforts in improving standards of social and environmental footprint for many of the energy infrastructure projects. The sharing of knowledge and skill sets in promoting the renewable energy market and technology capacity could be strengthened, including boosting infant wind turbine and solar panel industries from the ground up and developing manufacturing and financing capabilities to lead to the installation of a huge capacity within a limited time frame. Chinese enterprises and ministries can also actively involve themselves in various capacity-building activities among African governments, particularly engaging energy regulators to develop plans or road maps on renewable energy capacity and to establish stable policy frameworks in supporting renewable energy development.
Second, China can encourage active local participation and ownership to foster an environment conducive to technology transfer. China can enhance its own transparency through more effective data collection and regular reporting to counter misinformation and address adverse impacts on the environment as they appear. Dismantling the technical barriers that Chinese enterprises face in meeting global ESG standards will also enable technology transfer between China and Africa to become more sustainable and locally and internationally accepted. Additionally, focusing on impactful research and development partnerships and empowering local actors could drive a locally led green technology innovation ecosystem in the region.
Third, China can harness the potential of innovative financing. In the post COVID-19 context, it will be increasingly difficult to secure sovereign guarantees from many African governments that are facing debt servicing difficulties due to the pandemic and its consequent economic shocks. Renewable energy can be a very good piloting sector for encouraging project finance and equity investment because government auctions and procurement have become the mainstream practice for wind and solar energy activities worldwide, including in Africa. China can leverage public funds to catalyze private investment. Rather than blending finance project by project, a paradigm shift in establishing green development partnerships or funds with multilateral development banks could also help scale up efforts.
The author is vice-president of the Center for International Knowledge on Development. The author contributed this article to China Watch, a think tank powered by China Daily.
The views don't necessarily reflect those of China Daily.
Contact the editor at editor@chinawatch.cn.
