Life In One Of South Africas Oldest Townships

Many in developed economies often think and speak about Africa in a one size fits all context, and of course nothing could be further from the truth. The vast continent is a diverse tapestry of sovereign nations with varied geography, demographics, religions and energy-related challenges. One challenge many countries share with regard to energy, however, is a basic need for clean, affordable and reliable power.

And whether this electricity should be generated by large, centralized power plants – the system upon which the developed world build their modern societies – or by distributed generation sources like wind and solar power is a debate that often comes down to economics, return on investment and corporate risk appetite. These are the issues that International Association for Energy Economics President Omowumi Iledare grapples with on a daily basis. Breaking Energy interviewed Iledare – who is based in Nigeria – via email and Iledare’s answers to our questions are included below.

The 37th IAEE International Conference is being held in New York next week. Keep reading Breaking Energy for coverage from the sessions.

BE: What are Africa’s greatest energy challenges?

Iledare:  The energy challenges facing Africa are multidimensional and vary from one country to the other. Nonetheless, I would think access to affordable, sustainable and clean energy is the biggest challenge in Africa keeping in perspective the global environmental challenges and Africa’s need for sustainable economic growth. However, countries in sub-Saharan Africa, where most of the African population resides, seem to have the greatest challenge with respect to access to affordable energy. This means there is a dilemma with respect to which energy sources to pursue in order to facilitate easy access to affordable energy, keeping in perspective environmental implications of using the most cost effective energy sources available as was the case in the early days of development in Europe and the Americas. Balancing environmental challenges with limited income to purchase clean energy without sacrificing economic growth is a big dilemma for these countries. These to me pose the greatest challenge in Africa where energy poverty remains a big threat to the basic quality of life that is taken for granted in the advanced society who are now pushing vigorously for clean energy at all cost.

BE: How are you involved and what are you currently working on?

Iledare: At the moment, my time is devoted mostly to building local manpower capacity to facilitate a good understanding of energy and energy resource planning, management and strategy for sustainable economic growth and development in Nigeria. I currently direct an energy institute with a vision to educate, equip, and engage professionals in the petroleum and energy sector in Nigeria and other countries in Africa.

Having lived, studied and worked in the US for 30 years, I have a good understanding of the role of energy professionals in government, industry and the academia in the framing of an energy policy debate towards a pragmatic energy strategy for a nation. I have been a part of IAEE for a long time and value the interaction of these professionals. Thus, I have been working with others to facilitate a strong IAEE affiliate in Nigeria to build a network of energy professionals that would have a voice in the framing of a workable energy policy for Nigeria in not too distant future.

BE: Understanding Africa is not monolithic, which countries face the most severe energy-related challenges and which are better off and why?

Iledare: As I mentioned earlier, countries in sub-Saharan Africa have the greatest challenge because of population and low economic output in terms of access to affordable and sustainable energy. However, in the sub-Saharan African region, South Africa seems to be light years ahead of other countries in terms of access to energy judging from the level of power generation capacity. I would not hesitate to say Nigeria has the greatest challenge using a simple affordability of power generated per capita. Perhaps, the potential is there to improve this indicator, but this will require a lot of investment. One must quickly add that the government is doing all it can to improve the situation. It would seem to me that Africa would need to rely on fossil fuel if it is to meet the minimum estimated energy requirement for a decent living standard. The notion that investing in fossil fuel development in Africa could become a stranded investment seems farfetched in my opinion.

BE: Is Nigeria making progress toward using its associated natural gas for power generation?

Iledare: To a large extent, the answer is yes. Associated gas flaring has been reduced to about 30% or less according to the data at my disposal. However, if Nigeria is to depend on natural gas for its electric power generation, then exploration and development efforts for non-associated gas must be encouraged. One of the excuses for continuous power interruption is inadequate power supply despite pipeline vandalism. Guaranteed supply of gas is a necessary condition for investment in gas-powered turbines. This is one of the reasons why the unending delay in the petroleum industry bill leaves much to be desired. More so, when for the first time in the history of fiscal system designs, gas has its own fiscal terms not indexed to oil prices.

BE: What are some of the challenges associated with using distributed generation to bring power to rural, grid-isolated communities?

Iledare: Lack of investors and the inability to guarantee returns on private investment are the challenges.  Unfortunately the government, because of fiscal limitations, is also handicapped and so it can no longer be the sole provider of energy to rural communities as was the case in the past. I also hasten to say, the drive to be on the grid is also over played by rural dwellers as well, who because of illiteracies give too much premium to receiving power from the grid.

Is there anything else you would like to add? 

Iledare: I think you said it absolutely well that one solution does not fit it all for Africa. It is a diverse continent and its energy problems are multidimensional and the appropriate solutions to its problems may not be homogeneous in approach. I would venture to say just a linear or non-linear transformation of Western Models to solve African’s energy problems may not work. Perhaps, the time has come for professionals in the west working to help solve energy problems in Africa to work with local professionals to work out a more pragmatic solution within the continent.

Breaking Energy is a long-time media partner for the IAEE/USAEE’s annual conferences.

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