Africa is home to 12 of the 20 fastest-growing economies; its strong manufacturing, services and technology sectors are fueling economies around the globe. Africa is achieving these successes without being able to make full use of all its resources because access to electricity is still lacking in many areas.
Approximately 600 million people in Africa do not have access to power. In Kenya and Tanzania, more than four out of every five people live without electricity. In Nigeria — Africa’s largest economy — less than half the population has electricity. This situation takes a toll on human health, access to opportunity and economic growth.
Developing reliable power supplies across the continent is therefore a global priority and a critical necessity to ensure Africa can reach its economic and human potential.
To realize reliable power across Africa, a host of partners — governments, non-governmental organizations, the private sector, the global investment community — must work together to transform Africa’s power challenges into power opportunities. The good news is that the hurdles before us are not insurmountable, and with the proper steps and sustained commitment, Africa can achieve its goals and raise living standards.
Addressing Three Challenges
Today, three primary challenges exist that, if addressed in smart ways, can mean energy can flow across Africa more easily to more areas: fuel availability, speed to power, and affordability and financing.
Despite the fact that Africa is blessed with rich energy resources, fuel availability is a problem in many parts of the continent. Africa’s abundant natural gas resources aren’t always co-located with power generation sites. This means that while the raw ingredients needed to support sustained growth are in place, in many cases the technology is not yet there to convert those resources into electricity.
There are success stories, thankfully, in addressing this difficulty. In Nigeria, a factory installed a virtual gas pipeline using trucked-in CNG to power their gas engines and reduce fuel costs by 45 percent. In Kenya, independent power producers and smaller power generation companies are using available resources — such as agricultural waste — to generate local power using engines that are capable of running on a wide range of fuels. These two examples are successful case studies that came to life through collaborative efforts between governments and the private sector. They were completed with key input and agreement between government, trade organizations, the private sector and financing partners.
With a high, urgent demand for electricity in Africa, speed to power is another challenge that must be addressed. It can take years to develop the necessary infrastructure to deliver power across large — at times, remote — areas. These delays impose a huge opportunity cost because they defer commercial activity and its compounding effects.
Technologies like distributed power — flexible, decentralized power systems — can be installed in a matter of weeks, reducing wait time and speeding up economic activity. Local generation projects are scalable, too — if one engine is installed and the electricity need rises in a community later on, additional engines can be added relatively quickly. Algeria recently installed multiple aeroderivative gas turbines in a matter of a few months — unheard of a decade or two ago, but this is now a promising reality.
While we are seeing that the technology exists to solve specific challenges, economic challenges remain in terms of affordability and financing for power projects. Here, too, there is a bright note. For smaller-scale projects with gas engines and gas turbines, lower installed costs and smaller increments open up more financing choices and bring power to African countries quicker. These smaller distributed power and local generation projects do not require transmission infrastructure, also known as a power “grid,” that is both costly and complex. Users with capital constraints can even choose to rent their power equipment through our exclusive rental channel.
Partnerships in combination with technologies like distributed power can bring electricity to African countries at speeds once unheard of. Together, we can ensure Africa overcomes its energy challenges.
Lorraine Bolsinger is President & CEO of GE Power & Water’s Distributed Power business.