Vast business opportunities in renewable energy sector.

By Polite Ndhlovu

Energy is very crucial in human lives. It transforms lives, not just socially but economically. It is one of the major drivers of development.

It’s high time serious investors explore this field which presents vast opportunities especially in Sub-Saharan Africa. The region is conducive for green energy production. Renewable resources are in abundance in Sub-Saharan Africa for the advancement of renewable energy.

In my view, the African market is ready for sustainable energy innovations.

According to Stephen Koopman, Research and Development Manager (energy sector) at the Council for Scientific and Industrial Research in South Africa, 13 percent of the world’s population lives in Sub-Saharan Africa. However, the region only has 3 percent of the world’s total electricity generating capacity.

Only South Africa has the capacity, but still millions of its citizens do not have legal access to energy. Some households are installing solar panels for themselves instead of waiting for supplies from the national grid. At some point and for an extended period of time, Zimbabwe had to resort to load shedding to deal with electricity shortages.

According to the International Energy Agency on World Energy Outlook in 2014, more than 620 million people in Sub-Saharan Africa (two-thirds of the population) live without electricity and nearly 730 million people rely on dangerous, inefficient forms of cooking. The use of solid biomass (mainly fuel wood and charcoal) outweighs that of all other fuels combined.

People who are not connected resort to fossil fuels for energy. These emit greenhouse gasses causing climate change.

In Zimbabwe, fuel wood is the most used type of fuel with 61%, coal 8%, liquid fuels 18% and electricity 13% (Primary Energy balance 2000). Due to energy shortages and the current cash crisis, urban dwellers are now banking on fuel wood for energy. According to the Central Statics Office (2002,  about 15-30% of urban households are now using fuel wood.

Investors can make a viable business investment while also promoting sustainable renewable energy options. Kyoto Protocol Article 1a (IV), calls upon parties to research on, promote, develop and increase use of new and renewable forms of energy, carbon dioxide sequestration technologies and advancement of innovative environmentally sound technologies.

This shows that investing in renewable energy in Sub-Saharan Africa has great business potential. Not only is it profitable, but it is in line with the Sustainable Development Goals.

Effective and efficient technologies are available. A single wind fan can provide electricity to power more than 1 000 homes. A hectare of solar panels can power at least 200 homes.

Meanwhile, the price of renewable energy has reduced significantly in the past years.  According to Scientific and Industrial Research, photovoltaic cells price has dropped by 80% and that for wind fans by a third. This means that renewable energy is becoming cheaper than other convectional systems.  The Levelised Cost of Energy (LOE) of renewable energy is lower. In South Africa, the cost of solar energy is 62c/Kwh. This is much lower than coal which is R 1, 05/Kwh and nuclear which is pegged at R 1,17/Kwh.

Other factors that make the business more viable and profitable are the conditions which are conducive for the production of renewable energy. Sub-Saharan Africa has abundant renewable resources.

The region is well known for its high wind speeds throughout the year. It also receives about 3 000Kw of solar radiation per square metre per year. This means we have more than 20 times more than the energy amount Sub-Saharan Africa uses per year. Much of this energy is lost as there is very little efficiency in its use.

According to Dr Peter Mukoma of the Council for Scientific and Industrial Research, South Africa; renewable energy also has the advantage of Distribution Generation. This is when energy is produced right where it is consumed thereby cutting transmission costs. These factors reduce grid parity making renewable energy cheap and affordable.

Some investors might worry as to how they can provide a steady supply to meet demand, but research has proved that high tech storage systems can be made available. Energy is affected by base load which is the time when minimum amount is required. This is when energy use is very low.

There is also the peak load which is the time when usage is at its highest. Operators have to balance this with the energy supply so that required amounts are achieved. Now with renewable energy it becomes trickier since renewable resources like solar and wind also vary. Operators will have to juggle with variables from the demand and supply side.

There are storage mechanisms that ensure that when demand rises energy will be available. Energy can be stored in magnetic fly wheels and the use of pump hydro storage which can store water in a reservoir on a hill.

When the water source dries up, the water will use gravity to go downhill and drive turbines. The other method is the use of compressed air. Air can be compressed and stored into underground caverns. This air will be released when the need arises. The use of batteries can help a lot in storing energy for supply during the peak load.

The Zimbabwean government is strongly pushing for the adoption of renewable energy sources in the country. Zimbabwe’s National Strategy on Climate Change promotes the use of renewable energy and energy conservation. It also aims at introducing policies that promote the use and adoption of clean and efficient energy in industries.

For an investor looking to have a business that is viable now and into the future, renewable energy is the answer.

Post Author: Muaz Cisse

Leave a Reply

Your email address will not be published. Required fields are marked *