The rise of alternative energy in Africa_Geothermal power generation

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By Lisa Dutiro, Candidate Attorney, Manokore Attorneys, DLA Piper Africa member firm in Zimbabwe


 While climate conditions threaten the hydropower industry, solar and wind power continue to offer commercial viability. But much of Africa’s renewable energy potential remains untapped and the scope for growth could create investment opportunities across the continent. Could geothermal energy be the solution to Africa’s energy crisis?

Africa is undergoing a period of accelerated economic growth and transformation in response to global pressures and demands. The availability of energy is a fundamental requirement for Africa to be able to foster and harness its sustained growth and achieve economic and social development. It has been estimated by the International

Renewable Energy Agency that by 2050 the continent will be home to at least 2 billion people – almost double its current population. The rapidly increasing populace has led to power production capacities in Africa failing to meet current levels of consumption and demand.

The deficiency in the supply of power across African nations is likely to hinder the continent’s drive to achieve its economic growth projections. The lack of power supply in various African countries can be attributed to the poor management of power utilities, the high costs involved in processing fossil fuels, the large losses that are experienced from the aged electrical grids as well as high tariffs. With the lowest electricity generation capacity and the most acute form of energy poverty in the world, Africa is in crisis because of the failure of traditional methods of power generation on the continent.

A move towards renewable energy

As Africa labours to seek sustainability through dependency on costly and polluting energy generation solutions, global efforts to eradicate reliance on finite fossil fuels have ushered renewable sources of energy into the spotlight. The use of renewable energy allows countries to enhance their self-sufficiency and limit dependency on

costly imports. Renewable energy is clean, nondepletable and has a much lower environmental impact than conventional energy sources. It guarantees sustainable future energy supplies and has the potential to provide Africa with the opportunity to achieve its economic objectives.

The growth of the use of renewable resources on a global scale has led the cost of associated technology to fall dramatically. According to statistics provided by the African Development Bank in 2017, Africa’s untapped renewable energy potential shows estimates of 350 GW for hydroelectric energy, 110 GW for wind energy,

15 GW for geothermal energy and 1,000 GW for solar. If this large reserve of renewables is exploited,

its effect could potentially alter the economies of many African countries, thus making it a key priority of sustainable development.

Historically, hydropower has been the most commonly used renewable source of energy in Africa. However, given climate change, hydropower generation has become very unpredictable as droughts continue to sweep across

the continent. More recently wind and solar power have become commercially viable, and although they are similarly reliant on weather conditions, solar energy potential in Africa remains high due to the continent’s location. Options for power generation from solar energy include utility-scale conventional or concentrated photovoltaic (PV) and concentrated solar thermal power (CSP) as well as small-scale PV systems suitable for off-grid power generation. Solar energy can also be used to produce heat for domestic users or non-intensive

industrial users.

Top ranking solar markets are South Africa and North African countries due to their strong policies and commitment to investment. The Ouarzazate Noor solar complex in Morocco is currently one of the largest

concentrated solar plants in the world; the plant aims to produce 2,000 MW by 2020, 680 MW of which has already been successfully launched. Wind turbines are widely used in most countries and are central assets for many rural communities.

Factors determining the potential of wind power are wind speed, pressure gradients and the geography of the landscape. The presence of deserts, coastlines and natural channels also make for favorable wind speeds. Consequently, the best regions in Africa for wind farms are in the rugged regions of the Sahara, along coasts and in the Southern African mountains and the horn of Africa. Wind power production in Sub-Saharan Africa is currently booming, and East Africa is leading the way with Kenya’s recently unveiled wind power project – Lake Turkana

Wind Power Farm, which is the largest wind farm in Africa. It has 365 turbines and a capacity to dispense 310 MW of reliable, low-cost energy to the national grid.

 

Much like wind and solar power, geothermal energy has the potential to support the African power sector as it moves away from being over-reliant on hydropower and towards becoming drought resilient. Africa’s known geothermal potential is predominantly present in the geologically active area of the Great Rift Valley, which extends from Djibouti to Mozambique. The valley is known to have over 30 active volcanoes and countless hot springs. With only 0.6% of Africa’s known geothermal potential being exploited, this energy source has been described as a hidden gem in Sub-Saharan electricity production.

Although countries around the continent are exploring renewable energy potential and engaging in many notable projects, few countries have specific renewable energy laws or investment incentives. This creates difficulties

in attracting foreign investment into the sector, and more so, into less-developed energy sources such as geothermal energy, despite its abundant potential.

The untapped potential of geothermal energy

Geothermal energy is a form of renewable energy that can produce sustainable electricity using the Earth’s own resources. It is generated and stored in the earth and can be captured from hot water springs or reservoirs located near the surface. These hot springs are found where water percolates into areas of volcanic activity in the Earth’s crust and becomes superheated before forcing its way back to the surface. Heat derived from the  hot water can be converted into electricity through electromagnetic induction. Geothermal heat can provide electrical power that is not dependent on weather conditions, making it a reliable renewable source of energy.

The three most known types of geothermal power plants which convert thermal energy to mechanical energy and finally to electrical energy are binary plants, dry steam plants and flash plants. Binary plants can exploit low temperatures and do not release geothermal fluids or environmental hazards into the environment, making them a preferable mechanism for geothermal power generation. Other innovative ways in which geothermal power

can be generated are through the conversion of waste heat from industrial processes, power stations and transportation into electricity through engineering that will permit the thermal energy produced from the waste to drive a turbine.

Although the necessary technology is not widespread in Africa, geothermal energy can also be used in industries that need heat at low temperatures. Kenya is currently the largest geothermal energy producer in Africa, with its power production contributing to over 40% of the country’s electricity generation. The East African nation has

successfully harnessed its geothermal capabilities, generating an estimated 630 MW, with nearly 400 MW of that production coming online since 2014. Kenya began exploring geothermal power in the late 1970s, and according to

the Geothermal Council Resource (a US industry association), the rise of Kenya’s geothermal industry ranks ninth in the world.

The Infrastructure Consortium for Africa and the United Nations Environment Program has estimated the potential of 20,000 MW of geothermal energy across Eastern Africa, and nations such as Tanzania, Uganda, Rwanda, Djibouti, Eritrea and Comoros have undertaken preliminary exploration for geothermal potential. Ethiopia is

currently harnessing its geothermal capacity, and according to Reuters, is aiming to reach 1 GW by 2021.

Burundi, Zambia and Uganda are also currently operating small-scale geothermal plants.

Geothermal exploration can be expensive and risky. Much like oil and gas exploration, the exact potential of a site can only be assessed and known once drilling has taken place. Further impediments to the harnessing of

geothermal potential in Africa are the lack of funding, lack of technical expertise and poor governance. Many governments are still developing knowledge capacity for the sector. Countries that have not included geothermal production in their legal frameworks need to amend existing frameworks or craft legislation regulating investment

schemes, development activities, the generation and distribution of electricity and the rights and obligations of holders of different kinds of licenses (exploration, development, use and selling) for geothermal exploration and production.

Various incentive schemes that apply to renewable energy projects or projects that are likely to have national and economic impact tends to draw investor interest. However, a lack of regulatory frameworks specifically pertaining to geothermal production has the potential to ward off prospective investors, emphasizing the need for legislative development in this area.

What’s next for Africa?

 In order for Africa to remain economically competitive and succeed in the rapidly growing global economy, its future energy needs will need to be considered and addressed at a legislative, technological and commercial

level. Reliance on costly fossils fuels has failed to meet current power demand across the continent and there is a need for further engagement of alternative energy sources by African governments, FDIs and regulators. Renewable sources of energy will assist in the eradication of poverty and deprivation among the African population and stimulate economic growth and activity in the region.

Further exploration into the mostly untapped potential of geothermal generation should be encouraged due to its reliability and ability to provide long-term, sustainable energy to the continent.

Source: DLA Piper Africa Connected Issue 3: Energy in Africa – Innovation, Investment and Risk