Tuesday, 1 May 2018

Energy, Aid and Africa

Fossil fuels still account for around 80% of the energy used globally. With concerns about climate climate and air pollution rising, change is underway, but it will be particularly hard in some developing countries. For example, around 90% of South Africa’s electricity comes from coal burning plants and oil and gas exports are the main sources of income for several African countries. At the same time, many people in Africa and other developing areas are still off-grid. Aid programmes have sought to extend energy access, but spreading renewables is an uphill struggle- many of these areas have many other problems, including widespread poverty.

My new Palgrave Pivot book, with Terry Cook, ‘Renewable energy: from Europe to Africa’, is based in part on extensive survey work Terry carried out under contracts with European Commission funded development aid programmes in Africa, aiming to spread the use of renewable energy. It looks at the successes, but also at some of the weaknesses of these and other current aid programmes. They are often well funded, but not everyone is convinced they are well run or even needed.
The book makes clear that, given the huge economic and social problems that exist in Africa and elsewhere in the developing world, aid is definitely needed and can be very valuable. But its form may need to change.  For example, as the book notes, it is often hard to reconcile the obvious poverty and needs of parts of the population, in Africa especially, with extensive resources made available to those involved with the aid programmes and agencies: they are usually very well paid, and many live something of a jet set lifestyle.  They may work hard and with commitment, but it would be good to see local people playing more of a role: most of the Agencies are relentlessly western in recruitment terms.   The development and use of local technical expertise is vital.

However, it is not just a matter of who gets the remuneration: the emphasis of the work may need to be reconsidered, with, rather than high level policy frameworks, more of a focus on practical technology action and support.  The structure of many of the aid programmes can make this hard- they are usually focused on meeting agency staff support costs, not on direct project investment. Even so it is possible to support local technical skill development.

In terms of technology focus, as the book shows, local off-grid and mini grid systems are vital in Africa, but so are wider grid links.  There are wider plans for supergrids, but, although the World Bank/IMF and other global funds might help at some point, so far it seems to be mainly China, now quite heavily involved in investing in energy projects in Africa, that is supporting new grid links, in order to ensure that its generation projects can find paying consumers. It will be embarrassing if China’s essentially commercial strategies and pragmatic ‘no strings’ approaches turn out to be more effective in delivering sustainable power than the finely nuanced sociotechnical policy prescriptions emerging from the Western aid agencies and programmes. Equally though it will be devastating if projects go ahead that are poorly thought out in social and environmental terms.  Local involvement in selection, planning and deployment is clearly needed and, once again, that requires the development of local technical expertise. 

Current development policies do usually emphasise ‘capacity building’ in terms of technical and business skills, and clearly that is that something that will be vital if local enterprise is to thrive. However, the current emphasis on private sector led projects, and the drive towards privatization, may diminish a valuable existing source of technical capacity, the state owned utilities. They are not all hopelessly unwieldy and backward looking, and represent a significant technical resource, in Africa especially. Along with the national governments and civil society groups, they may also offer a locally based bulwark against commercial ‘short-termist’ pressure from profit-seeking foreign companies, and hold out for ‘local content’ in projects. That seems especially needed in the African context, but most developing countries need to find a way to resist exploitation by rich and powerful overseas interests, often backed, unwittingly or otherwise, by large aid agencies and/or their contracted-out consultants. 

Getting access to capital will always be an issue for poor developing countries, especially for large infrastructure projects, as attempts are made to expand and integrate the use of renewables. Trade may well replace aid to some extent, as proposed by Germany in its ‘Marshal Plan for Africa’, which aims to help create new markets and local enterprise: see my recent Renew Your Energy post: http://blog.environmentalresearchweb.org/2018/03/31/development-aid-and-renewables-from-aid-to-trade/

Although there may be issues with that, it may help with smaller local projects. However, it may not yield sufficient capital for major grid-link/infrastructure projects for some while. To get the large scale funding needed for that will still involve and require major investment from overseas. So some big questions remain: what sort of trade, what sort of investment, how much residual aid, and who will benefit most from it and from trade.

So what is the overall prognosis? As the book explores, there are various agendas.  Climate change is only one, and it is not always seen as central in many African countries: they have more urgent economic and health problems, as well as rapid population growth and rising demand for energy. To deal with all this they want economic growth, even it means using fossil fuel, although the renewable options are beginning to look increasingly attractive as a way to create growth.  Meanwhile, the EU is increasingly looking to aid and trade as way to create and sustain employment in Africa, so as to reduce immigration. In the energy context, renewables are usually seen as the best bet in that regard. 

So there may be an agenda confluence, although also some potential for conflict, not least given sometimes strong residual, and in some cases expanding, commitments to fossil fuel and interest in some quarters in nuclear power.  The latter may not be too significant given its high cost, but for those countries in Africa heavily reliant on fossil fuel use and export, significant diversification may not yet be high on the agenda. However, that may change, given the shifts in global fossil fuel markets, and, given the falling cost of renewables, their use may expand to meet rising energy demand in Africa.

There are clearly many uncertainties, but renewables are spreading in most of Africa, and, hopefully, by exploring what has happened so far in some key areas, and the options available for the future, this book will help to move the debate on as attempts are made to spread the use of renewables globally.  The potential is certainly there. For example, IRENA says Africa could get 50% of its electricity from renewables by 2030, and the new scenarios from the German Energy Watch Group and Finland’s LUT include one for Africa with over 92% of its electricity coming from renewable by 2050: https://www.researchgate.net/publication/320758165_Global_100_RE_System_Sub-Saharan_Africa

*Interesting, although President Trump has called for major cuts to USAID, he has decided to continue with Obama’s $7bn Power Africa programme, evidently since it mostly involves US private sector investment. But he may also be worried about China’s increasing role: http://sweetcrudereports.com/2017/09/20/donald-trump-set-to-continue-obamas-power-africa-program-official/  For a very different take on development options in Africa see: http://aidc.org.za/download/climate-change/OMCJ-booklet-AIDC-electronic-version.pdf

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