Renewable Energy: A solution of the future
Question: Some experts argue that renewable energy such as biofuels and biogas are the sources of energy of the future, especially for a continent like Africa that has been in the throes of a chronic energy crisis. What is your view regarding these new and renewable energy sources?
Answer: With the recent high and volatile oil prices, African countries, the majority of which are net oil importers petroleum, have been forced to develop innovative policies to mitigate the impact of these high prices on their economies. The most effective policy in this respect is the diversification of energy supply sources. In the transport sector, liquid biofuels appear to offer the best opportunities. The development of liquid biofuels in Africa can bring about multiple benefits that include: (a) Increased energy supply security through diversification and progressive substitution of oil; (b) Reduced national oil importation bill; (c) Increased agricultural productivity through the use of agricultural residues and waste in productive processes; (d) Increased employment opportunities in associated sectors i.e. agriculture, industry, infrastructure and research in both rural and urban areas; (e) Uptake of clean cooking technologies using ethanol gel fuels and vegetable oil stoves; and (f) Reduced emission of pollutants, including greenhouse gases, thus providing both local and global environmental benefits.
Africa’s energy needs are enormous and largely go unmet. In order for biofuels to significantly contribute to Africa’s energy needs and also take advantage of potential international trade opportunities, biofuels need to be produced on large scales and require appropriate technologies and supporting policies. With this in mind, a number of potentially contentious issues will need to be considered carefully. There are legitimate concerns that the production of biofuels can compromise food production and therefore become counter-productive. This can occur through either competition for existing land or economic feedbacks. In addition, there are significant chances that small-scale farmers could be squeezed out of their land and the biofuels sector by powerful large companies. So far, it is suggested that to mitigate this challenge, land tenure policies should encourage the use of new and perhaps semi-arid land that would otherwise not be used to produce food now and in the near future. Furthermore, there is growing concern about the clearing of tropical forests for commercial production of biofuels. However, much will depend on the pace and direction of technological progress in agriculture and, even more, on our ability to design integrated food energy production systems that support existing ecosystems.
As exemplified at the recent high-level Biofuels Conference held in Addis Ababa, the ministerial declaration strongly supported development of biofuel industry. Government efforts in several African countries are at their early stages to create a formal legal and regulatory structure for biofuel sector. In terms of international context, according to International Energy Agency’s (IEA) 2004 World Energy Outlook (WEO), biomass and waste supplied 11 per cent of the world’s total primary energy demand in 2002. Much of this is used in traditional ways in developing countries. The amount of biomass consumed and the form it takes differ among regions and within countries, depending on resource availability, technologies, and accessibility of commercial fuels, cultural preferences and incomes. There appears to be a strong correlation between poverty level and use of traditional biomass in developing countries and proportion of the population using traditional biomass will remain highest in sub-Saharan Africa compared to other developing country regions like South Asia and Latin America. In sub-Saharan Africa, 80 to 90 per cent of the residential energy needs of low-income households are met by traditional biomass, mostly fuel wood or charcoal (WEO 2002).
Globally, biomass is, and will remain a major energy source in developing countries. According to IEA’s 2004 WEO, the total number of people relying on traditional biomass as a source of heating and cooking fuel will grow from just under 2.4 billion people in 2002 to over 2.6 billion in 2030. In Africa, the number is projected to increase from 646 million in 2002 to 996 million in 2030. Yet, there is no significant parallel development or investment in conventional energy production and distribution infrastructure such as electricity and petroleum. Therefore, Africa’s energy picture, both in the immediate and medium term, will significantly involve biomass energy. Given the current heavy reliance on traditional biomass energy, it is of essence that Africa’s future energy strategy be premised on the production, supply, conversion and use of biomass energy in more sustainable, efficient and cleaner ways while expanding and accelerating a broader transition to clean and efficient use of modern fuels, including modern biomass.
A wide range of proven technologies can convert the various forms of biomass into modern energy carriers or just biofuels thereby increasing access to modern energy services, increase conversion efficiency and reduce deforestation, reduce pollution, and provide energy for productive uses like industrial applications and processing of agricultural produce among others. Some of these technologies include cogeneration, gasification, combustion, and densification.
Medium-to-large cogeneration using biofuels is already in the market. This technology has mainly been used to generate process heat and electricity from agricultural waste such as in sugarcane processing. For example, co-generation in Mauritius now accounts for close to 40% of the electricity produced in the country with about half from sugarcane bagasse and crop residues. In parallel, biomass gasification technology based on solid biofuels has become commercially viable in recent times for both electricity generation and process heat applications in industry.
Ethanol from biomass as a substitute for gasoline is currently the main liquid biofuel globally as it has proven efficiencies, and established economics. Sugarcane, in particular, stands as the feedstock that already provides a large amount of ethanol in Brazil. There is some experience with ethanol in the sugar industry in southern and eastern Africa, although on a much smaller scale. Other crops, which can be converted into ethanol, are cassava, maize, potatoes, sorghum, sugar beet and wheat. There has been phenomenal growth in the global production and use of liquid biofuels, mainly ethanol and biodiesel over the last 5 or so years. In Africa, the longest continuously operating biofuels program is in Malawi, where ethanol from sugarcane has been blended with gasoline since 1982. Other efforts at biofuel production have been smaller or have not operated continuously. In recent years, there has been renewed interest in biofuels, resulting in a number of new pilot projects and exploratory studies in Africa and around the world.
The renewed interest in biofuels is attributable to a number of factors that include the rising and volatile price of oil, ongoing efforts to revitalize the agricultural sector in the face of low commodity prices, agricultural and trade policy reforms, local and global environmental challenges, the need to create new jobs and stimulate rural development, and the availability of new and more efficient technologies. As an example, between 2000 and 2005, the global production levels of ethanol and biodiesel rose from 18 to 33 and 0.9 to 3.9 billion liters respectively. Second generation technologies that are based on the use of non-food producing perennial crops are also being developed.
Gaseous biofuels or biogas can be upgraded to substitute natural gas (SNG) and can be fed into existing natural gas supply systems. Alternatively, it can be compressed into "green" compressed natural gas (CNG) to be used in gas-engine vehicles (buses, cars, trains, trucks etc.). Biogas-derived SNG can be "blended" with natural gas in any mixture. Biogas could further be processed into a green gas-to-liquid, thus becoming directly available as a powerful and very clean-burning liquid fuel, although this route seems uneconomic so far. High rate biomethanation process has been used in many countries to obtain biogas from industrial wastes as well as from liquid municipal wastes and used to generate power or process heat on commercial basis.
Biogas is gradually gaining popularity, especially in Africa where the lack of clean and sustainable energy sources represents a danger to the environment and its people. Biogas installations have a positive impact on health. Cooking using biogas is much cleaner, cutting the risk of contracting respiratory and eye diseases caused by the black smoke inherent in traditional methods. Women in particular will benefit from this cost-effective and clean energy use. Biogas use requires manure to be fed directly to the biogas plant, keeping the farm yard cleaner and producing valuable organic fertilizer (bio-slurry). For even more efficiency, latrines can be connected to the digester. Whether or not this is an option depends on cultural factors. It will not be forced upon customers but supplied on demand as an additional option. The design and construction of bio-digesters enable them to be connected to a latrine at a later date. In Nepal, very few households were initially interested in latrines, but more than 60% have now had them installed.
The operation of a bio-digester mainly consists of feeding the installation with a mixture of dung and water. Biogas digesters convert animal dung, human excrement and other organic materials into combustible biogas. Biogas can be used in simple gas stoves for cooking and in lamps for lighting. The bio-slurry left over from this process is easily collected and can be used as a potent organic fertilizer to improve crop yields. Various types of biogas digesters have been developed including the floating drum, fixed dome and plastic bag design. Depending on the context, any type may be used. Most of the plants built so far are of the fixed dome type. They are constructed from bricks and/or concrete and are usually installed underground in the yard. To operate, they must be fed daily with a mixture of dung and water. For farmers with livestock on site and access to water, this job will take no more then 20 to 30 minutes a day. The fermented material is removed automatically; the bio-slurry is discharged into a compost pit or channel. The robust design of this type of biogas plant (fixed dome) ensures a lifetime of over 15 years. Maintenance is restricted to occasional inspections and where necessary – repairs to pipes and fittings. The installation itself – if operated properly – needs little maintenance. Investment costs range from lower than 225 Euros in Asia to more than 450 Euro in Africa.
Farmers with at least 2 cows or 7 pigs (or a flock of 170 chickens) can generate sufficient gas to meet their daily basic cooking and lighting needs. Within the same design, different plant sizes can be constructed to allow for actual numbers of livestock and the family’s biogas requirement. Clearly, the obvious advantage of domestic biogas is in providing energy for cooking and lighting. Replacing conventional cooking materials – often wood, briquettes or dung cakes – the installation not only saves money, but also reduces the workload of women and girls usually responsible for collecting and preparing these traditional energy sources. Equally important, the indoor air pollution caused by cooking on inefficient wood stoves is virtually eliminated.
With manure being deposited directly into the digester, the farmyard is no longer littered with animal droppings, so hygiene immediately improves. A toilet can also be connected to the installation, bringing a significant improvement to sanitary conditions. The bio-slurry discharged from the installation retains all the nutrients present in the original material, and it constitutes an excellent organic fertilizer. It can either be used directly or composted with other organic farm residue. Proper application produces higher yields than comparable fertilization with manure, and provides a viable solution to soil nutrient depletion in developing countries. Biogas installations reduce the demand for firewood, mitigating deforestation. Applying bio-slurry as an organic fertilizer closes nutrient cycles, and halts soil degradation and erosion. The biogas process is carbon neutral, contributing to the global reduction of greenhouse gas emissions.
Question: Africa, many people say, holds the crucial piece of the world’s energy puzzle. It’s arable and fertile lands make it possible to produce enough biofuel for the continent and beyond. How true is this?
Answer: Sure, Africa has huge arable and fertile lands to produce vast amount of biofuels for the continent and beyond. But we have to be careful, because biofuels development can make a significant difference in ending poverty and hunger in Africa or they can worsen it. The real issue is whether large-scale biofuel industries would benefit the rural poor or marginalize them further. It is therefore critical to ensure that the production of biofuels will not result in negative social, economic and environmental problems especially in developing countries. Within the context of biofuels production, there is need to address associated concerns over land use, land ownership, loss of biodiversity, the use of genetically modified organisms, greenhouse gas emissions, soil erosion and other soil degradation, water use and water contamination, human health impacts and labor conditions. Therefore, there is a need to develop and apply robust sustainability criteria that take local sustainable development goals into consideration in guiding the development of biofuels.
Africa’s conducive climate, vast land resources and availability of cheap labor are among the main advantages of developing biofuels in Africa. The continent will however need a lot of international and normative support if the biofuels potential in the continent is to be fully realized in a sustainable manner. The required support includes increasing awareness among stakeholders and decision makers of the potential and challenges of biofuels, technical assistance in project development and implementation, development of evidence-based policies, strategies and investment plans; investment mobilization; knowledge exchange and sharing of experiences, both from the South and the North, development of requisite human, institutional and systemic capacities; and technology transfer; among others.
Question: Renewable energy technology can make major contributions to the diversity and security of energy supply, economic development and addressing local environmental pollution. In addition, renewable sources of energy also have the potential to address climate change issues through the reduction of greenhouse gas emissions. Why are African countries still reluctant to embrace this technology that many see as the magic bullet?
Answer: African countries face several constraints in promoting renewable energy which comprises solar thermal and solar PV, wind power, small and large hydropower, geothermal, etc.
The solar thermal and PV is still expensive for rural use if subsidies are unavailable. Solar PV is only cost-effective for lighting (replacing the kerosene or firewood) and not for market industrial development.
Wind power (water pumping or electricity production) is still not popular in Africa due to the following constraints:
- Unfavorable investment environment
- Inadequate infrastructure (such as roads and lifting capacity)
- Lack of established and reliable legal framework, policies (procedure for Public-private Partnership, Independent Power Purchasers and Power Purchasing Agreements and Concession)
- Lack of appropriate capacity
- Lack of reliable data on wind speed
But over the last two years, and as result of the effort made by the AfDB, Private Sector Department, finalizing the wind energy (deployment of wind energy in Africa), there is an interesting project pipeline, 300 MW in Kenya, 20MW in Madagascar, 30 MW in Mauritania, and 15MW in Senegal. Wind energy for water pumping is already used in many countries in Africa, as these are small size turbines and do not require high wind speed or lifting facilities.
Africa has good potential for Hydropower (small and large-scale), specifically, medium size. The small-medium size hydro can meet the energy need in rural areas as these do not require any big investment for transmission line, if the solution of local network/grid is applied. The East African rift valley has a good geothermal potential, but due to the exploration drilling costs the geothermal is still not yet fully developed. The AfDB has taken the lead to develop the Assal project Djibouti in collaboration with a private sponsor from Iceland.
Question: The African Development Bank Group is the leading development finance institution on the continent and this institution is supposed to be at the forefront of efforts aimed at resolving the continent’s chronic energy crisis. Could you help our readers understand the role the Bank Group has been playing in efforts aimed at helping the continent meet its energy needs?
Answer: The Bank’s current investment focus in the energy sector is to reduce poverty mainly by increasing access to sustainable energy. Operations have encompassed: multinational projects; rural electrification and the deployment of renewable energy technologies; institutional and human capacity building; power sector reforms, including preparation of national energy strategies; and the construction of new and rehabilitation of existing power infrastructure. The Bank recognizes the importance of the energy sector to the development of the continent. Between 1967 and 2004, 10% of loans and grants approved by the Bank, amounting to US$ 4 billion, were allocated to the power supply sector. The electricity sub-sector was, however, allocated 90% of the resources invested in the power supply sector. The Bank has launched a significant internal initiative regarding the update of its 1994 Energy Sector Policy based on the current state of affairs regarding the energy sector in Africa and issues faced in that regard; and prepare a strategy on renewable energy and energy efficiency projects.
From 2002-2006, new approvals in the energy and power sector, including renewable energy, have amounted to UA 938 million (1 UA is approx. 1.5 USD). Of this, 28.7% was from the AfDF window in the form of grants and concessional loans to lower-income countries. The rest was from the AfDB window: consisting of 45.1% for non-concessional financing for energy projects and programs in the middle-income countries, and 26.2% for private and non-sovereign project financing, of which 18.1% financed private projects in lower-income countries. Bank Group energy and power sector approvals for the period 2002-2006 are listed below:
- at least 5 approvals with a commitment value of UA 111 million specifically focused on rural electrification;
- a number of energy and power sector studies with a combined commitment value of UA 21.8 million, on master plans for rural electrification, renewable energy strategies, and the feasibility of multi-country grid interconnections and power trade arrangements;
- 8 operations with multi-national scope with a commitment value of about UA 121 million, including UA 51 million of financing for 2 sub-regional power grid interconnection projects: a connection between Djibouti and Ethiopia to enable the former to tap the considerable hydro-power potential of the latter and reduce dependency on fossil-fuels, and an interconnection between Nigeria, Togo and Benin to enhance the smaller countries’ electric power supply security;
- financing for the enhancement of power transmission grids and distribution networks in Morocco and Tunisia in 2002 and 2003, respectively, with a total commitment of UA 121 million;
- support to sector investment programs in Cameroon (UA 51 million) and Mozambique (UA 26 million) in 2006;
- a total commitment value of UA 270 million to finance a combined cycle power generating plant in Egypt, a thermal and solar power plant in Morocco, and a thermal generator in Senegal;
- support for 3 major projects for the supply of modern commercial fuels: liquid natural gas exporting capacity in Nigeria (UA 78 million in 2002), the SASOL natural gas project in South Africa (UA 55 million in 2003), and reduction and control of negative environmental impacts control by SAMIR refinery in Morocco (UA 58 million in 2005);
- 2 approvals in support of energy sector policy reforms and institutional strengthening, with a total financing commitment of UA 13 million.
In 2007, two additional projects from the Bank’s private sector window were approved: a 15 MW micro-hydro in Madagascar and 250 MW hydropower plant in Uganda.
Question: A Netherlands Ministry of Foreign Affairs Mission led by the Deputy Director of the Department for Environment and Water, Paul Hassing, was recently in Tunis to meet with African Development Bank (AfDB) Group officials. The purpose of the mission, we have been told, was to explore possibilities for partnership with the AfDB Group on a biogas project. How fruitful was their mission and what other issues did you discuss with the delegation as a renewable energy expert?
Answer: AfDB has had a long and fruitful association with the Netherlands in the area of renewable energy. Biogas is gradually gaining popularity, especially in Africa where the lack of clean and sustainable energy sources represents a danger to the environment and its people. In this regard, a Netherlands Ministry of Foreign Affairs Mission led by the Deputy Director of the Department for Environment and Water, Paul Hassing, was recently in Tunis to meet with African Development Bank (ADB) Group officials where it made a presentation on Biogas for Better Life which is an African initiative. The purpose of the mission was to explore possibilities for partnership with the ADB Group on the Biogas for Better Life: An African Initiative. This initiative’s vision is to establish market-oriented partnerships between governments, the private sector, civil society and international development partners. The initiative is modeled after an earlier, successful program in Asia. Biogas for Better life Initiative is an African initiative offering investment and business opportunities. The initiative seeks to find the right partners and encourage local ownership. It will also promote local companies selling biogas installations to households willing to buy and this will result in households enjoying better health and more comfort as well as having more opportunities.
The mission was very fruitful and conclusions reached included (i) possible Bank participation through select country projects such as the Lake Chad Natural Resource Management Project aimed at reversing the deforestation and consequent siltation of the lake; (ii) possible visit by Bank staff to Nepal where the program has been successfully implemented. The bank is also willing to provide soft loans to national biogas programs if countries request the Bank to do so. Other areas of discussion included continued Dutch government support to the Bank through the Finesse program which is aimed at building capacity of the regional member countries and assisting them to identify and prepare projects in renewable energy.
The initiative is estimated to result in clean cooking for at least 10 million Africans, 5000 fewer deaths among women and children each year, a rise in agricultural production of up to 25% and, at least, 50,000 new jobs. The initiative will also result in household workloads being cut by two to three hours a day, better health and quality of life, fewer trees being cut down for firewood, more fertile, soil, higher agricultural production, fewer green house gas emissions. Health costs will be cut by between 60 and 100 Euros per family per year, a saving of 6,400 tons of fossil fuel per year, a saving of 3 to 4 million tons of wood per year and an annual reduction in greenhouse gas emissions of 10 tons of CO2.
Question: Biogas use in Africa will certainly reduce poverty and help check illnesses relating to biomass burning on the continent. From an economic perspective, do you think the ordinary African, who unfortunately lives on less than a dollar, will be able to afford such services?
Answer: The cost of a biogas plant (US$ 600-800) is relatively expensive for the majority of the households in Africa, even for many of those that have cattle. In order to be able to develop a sustainable market, the national programmes will use a combination of household contributions - cash and labour -, credits by households, and subsidies. The provision of subsidies has many functions. It will help:
- To make the investment more attractive for households.
- To give more confidence at the demand/supply side of the technology.
- To guarantee quality, through the so-called "carrot and stick" approach. Companies could be penalised for not complying with quality standards, they can even be banned from participating in the programme.
Subsidy creates higher demand and helps develop the market, this will introduce competition, which in turn can lead to a decrease of the price of the biogas installation. When the subsidy is kept constant the latecomers – who are mostly poorer – will have to pay less for the installation. The very poor that can not afford a biogas plant – also because they do not have any animals – can indirectly benefit as the pressure on dwindling forestry resources is reduced by the biogas programme, and because of increasing employment opportunities. The total subsidy per installation is estimated at US$ 300-400. It is assumed to be funded by national government, the international community and the market for carbon credits.
A biogas plant avoids the use of (unsustainable) fuelwood and/or charcoal and kerosene, besides offering multiple development benefits for the country. This means that there are greenhouse gas (GHG) emissions avoided which will not contribute to global warming. In Nepal, these emissions are on average 5 tons CO2 equivalent per year. These avoided emissions have a value in the international emissions market, and are called Certified Emission Reductions (CER). To cash on this one has to comply with very strict rules of the CDM mechanism, and at the moment this door is closed, after an initial success with the approval of a baseline and monitoring methodology for the biogas programme of Nepal. Over the last months the opportunities of the voluntary carbon market has developed quite fast. This might present new funding for the initiative.
However, there is an expanding market being developed supported by people wanting to compensate for the GHG emissions resulting for their lifestyle, companies and industries wanting to perk up their corporate image, and even cities and regions of countries adopting a global intervention as a result of political choices. This market is still being developed and follows rules that are as close as possible to the CDM rules, but take into account the specificity of developing countries. The product being traded is called Voluntary Emission Reductions (VER). The use of proceeds of selling the carbon credits could make a biogas programme sustainable, because it would provide the funds for programme development and subsidy. The advantage of domestic biogas for this market is impressive because of not only the climate benefits but also for the burden on women, avoided deforestation, new jobs and better health.