Powering Africa through Feed-In Tariffs

Powering Africa through Feed-In Tariffs

Report Powering Africa through Feed-In Tariffs
by
Renewable Energy Ventures (K) Ltd., Nairobi, Kenya: Joseph Nganga, Marc Wohlert, Matt Woods
World Future Council (WFC), the Heinrich Böll Stiftung (HBS) and Friends of the Earth England, Wales & Northern Ireland (FoE-EWNI)
Date of Publication: Reprint Deecember 2013
Number of Pages: 73
License: CC-BY-NC-ND

A great opportunity exists for African countries to profoundly transform their societies and economies if they improve their use of renewable energy sources. This is the central outcome of a report presented that was first launched in Johannesburg, South Africa in March 2013. The comprehensive study conducted by the World Future Council and the Heinrich Böll Foundation with the support of Friends of the Earth England, Wales and Northern Ireland shows that Renewable Energy Feed-in Tariff policies (REFiT) are a promising mechanism to unlock renewable energy development in Africa. REFiTs encourage investment in the generation of renewable energy – from individual home owners and communities as well as big companies – by guaranteeing to buy and pay for all the electricity that is produced from renewable sources.

The East African launch of the study will take place as part of a workshop of energy stakeholders in Nairobi on February 11. Policy makers, private sectors and research institutions in the East African region will discuss strategies for an energy transition that builds on the potential of significant but untapped renewable energy in the socio-economic development of the region. 

Tanzania for example has a great opportunity to become more independent from expensive and intermittent energy imports if it encourages the use of native renewable energy sources. Tanzania already opened its electricity market to independent power producers back in 1992. Its experience particularly with mini-grids should be seen as an advantage when it comes to drafting supportive frameworks for the accelerated renewable energy production. However, the lack of long-term, low-interest financing has been and remains a key challenge.

Kenya can become a manufacturing hub for East Africa in the production of renewable technology components and create many skilled jobs in the field. Kenya is one of the REFiT pioneers in Africa by already introducing this policy in 2008. This happened in the light of growing energy demand and the need to diversify its electricity generation that currently heavily relies on hydropower. However, the country has even more potential for local economic development if the programme is amended, including a more streamlined administrative process and a lower entry threshold.

Recently countries in East Africa are discovering fossil fuel resources (Oil in Uganda; Gas & Uranium in Tanzania and Oil and Coal in Kenya) and starting to extract them. Governments are directing their attention & tax revenue to subsidize this unsustainable industry. Hence, these fossil fuel budgets are no longer available to support of the renewable energy businesses of these countries. It is high time to foster a level playing field for renewable energy, considering the notion that Kenya could turn away from renewable.

The 155 page report, which is aimed at African policy makers, civil society and the private sector, provides an in-depth analysis of existing and drafted REFiT policies in 13 African countries: Algeria, Botswana, Egypt, Ethiopia, Ghana, Kenya, Mauritius, Namibia, Nigeria, Rwanda, South Africa, Tanzania and Uganda. The individual case studies examine the factors driving each policy and the socio-economic effects of REFiTs as well as presenting and analysing the prerequisites for their effective implementation. The study clearly shows that, when tailored to local conditions, REFiT policies successfully increase the overall energy production of areas both on and off the electricity grid. Moreover, the decentralised nature of REFiTs provides the opportunity to empower communities and to revitalise local democracy and self-governance by allowing for alternative models of ownership and governance.