Energy Efficiency Made Simple Vol IV 2015

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installed just to raise the electricity supply of the region to world levels. An average load factor closer to 60% is more normal, which would indicate the need for about 400 GW of installed capacity. Generating capacity is not cheap. Figure 3 shows the overnight capital costs for new generating capacity for various technologies [1], where the costs have been corrected for load factor – so, for instance, nuclear power typically supplies base load at 90% load factor, and the effective cost shown in Figure 3 is the overnight cost/90%. Clearly, Combined Cycle Gas Turbines (CCGTs) and hydro power are the low cost options and should be pursued wherever these re- sources are available. Coal is the next cheapest option, and significant unutilised reserves are known in the region. Nuclear and biomass are the remaining technologies costing less than ZAR40 000 per effective kW, and both present real challenges, so should only be considered as last resorts. None of the ‘new renewables’ (wind and solar) look promising in an environment where capital is a major constraint. If we assume ZAR20 000 per effective kW installed, then 400 GW of generating capacity will require a total of ZAR8 trillion, or about US$800 billion. This is a huge sum in sub-Saharan terms, and even spread over, say, 15 years, it would require over $50 billion a year to achieve. Is it affordable? How can we get there? There are huge demands for infrastructure in sub-Saharan Africa. It is therefore a challenge to find a reason for giving power supply any priority over other infrastructural demands. Fortunately, there is now a value for power. It has been possible to assess the cost to the South African economy of the collapse of its network in 2008. Each kWh that was not provided cost the economy ZAR75 in 2010 terms [1]. A shortfall of 2 400 TWh in the sub-Saharan African region outside South Africa could therefore be costing the economies in the order of ZAR200 trillion, or $20 trillion per annum. Spending $50 billion to make $20 trillion seem like a real opportunity. However, we have to remember that having adequate energy is only a necessary condition for growth. Actual growth will occur when there has been sufficient socio-economic development to be able to utilise the power. There is little point in making power available if it cannot be utilised. The fact that the value of power is far greater than its cost means that it is wise always to have a little more capacity than you need, because the cost of running short far exceeds the cost of holding a little excess capacity. But it does not follow that you must create significant excess capacity in the hopes of driving development. That has been tried on several occasions, and we know it is not a successful strategy. Another necessary condition for growth is the means to transmit power from where it is generated to where it is needed. Figure 4 shows the transmission grid in Southern Africa [4], with blue lines showing existing transmission and red dashed lines – the planned extensions. There are at present comparatively few cross-border links, and those that exist are generally of limited capacity. At present, Angola has essentially no grid, while Kenya, Tanzania and Malawi are independent, although links are planned. It is most desirable that cross-border links be created. European experience shows clearly how reliability of supply can improve when there is a high degree of

interconnection, even though the net power transferred over a year is quite small. Indeed, it is interesting that while South Africa is a major power producer, it is effectively in balance with its neighbours, importing as much as it exports. Even though transmission is in place, and there is effective local distribution, it must not be assumed that the arrival of power will result in an immediate surge in demand. It takes time to assimilate new sources of energy. A review of the South African experience shows [5] that it took about seven years after the first arrival of electricity for homes to be reasonably electrified. The early uses were low-power needs such as radio, television, computers and telephones; slowly small domestic appliances like irons and kettles were acquired; and only after a few more years the first major appliance, which was usually a refrigerator, was purchased. Creating local distribution is not cheap, and it takes time to start to recoup the investment in the system, which is something that must be borne in mind as there is more widespread power throughout the region. Conclusion The availability of sufficient electrical power is one of the key factors in facilitating economic growth. Sub-Saharan Africa is desperately short of power, and is poor as a result. Meeting its needs will demand investment of hundreds of billions of dollars, but the return on this investment should prove excellent because the value of power far exceeds its cost. Many of the nations of the region are blessed with the natural resources necessary to produce power cheaply – Tanzania, Mozam- bique, Angola and others have adequate supplies of natural gas; the Democratic Republic of the Congo has huge hydropower potential; and Botswana has an enormous and largely untapped coal resource. A recent assessment of Africa’s energy potential [6] notes that the present reliance on biofuel as a source of energy is creating huge environmental impacts. The impacts include loss of a carbon sink due to deforestation, aerosols from charcoal production and indoor air pollution from open fires. It is preferable to use more fossil fuel than to continue to rely on biomass energy. Africa has the resources. It now needs the courage to develop them. References [1] World Bank. World Development Indicators Excel Workbook. World Bank, Washington DC, 2015. http://data.worldbank.org/ data-catalog/world-development-indicators/ Accessed July 2015. [2] Electric Power Research Institute: Power generation technology data for Integrated Resource Plan for South Africa – Final Tech- nical Update. EPRI, Palo Alto CA, 2012. [3] SA Department of Energy: Integrated Resource Plan for Electricity 2010 – 2030. Revision 2, Final Report March 2011. [4] Southern African Power Pool. http://www.sapp.co.zw/sappgrid. html. Accessed July 2015. [5] Lloyd, P. Twenty years of knowledge about how the poor cook. Domestic Use of Energy Conference. Cape Peninsula University of Technology. 2012. [6] Africa Progress Panel: Power, People, Planet Progress Report 2015. www.africaprogresspanel.org

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ENERGY EFFICIENCY MADE SIMPLE 2015