Africa must consider demand when producing energy

Despite having roughly a fifth of the world’s population, less than 4% of the world’s power is used on the continent of Africa. 380 million of the 570 million people without access to power worldwide live in Africa.

The paradox is that despite having insufficient electricity, this “Dark Continent” actually produces a lot of energy, but without a clear pathway that sustains the generated energy through productive use, it will be impossible to fully harness the energy, leading to high electricity prices and a lot of wastage.

To put it briefly, when it comes to addressing Power Poverty in Africa, we’ve been focusing on the incorrect solution. Instead of generating demand, we have been concentrating on increasing supply.

We must first understand what driving demand entails. Demand has to do with business activity. Unfortunately, small-scale consumption is currently what drives the demand.

The adoption of and willingness to pay for electricity is frequently low in many communities, mainly due to the low usage rates of those who are connected. For instance, you’ll discover that in many rural areas, typically, one room in a home is lit up with electricity, a socket or two, an iron box or a radio in some cases.

We must immediately leave this reality behind, because we need to change from a consumerist to a producerist mindset. Consumption shouldn’t be done for selfish reasons, but a by-product of a bigger end. So how do we attain this?

This is the solution: with an eye toward the economy, we must work to produce energy. In order to reduce poverty in Africa and provide money, employment, electricity has to be part of a package. On its own, it may not be enough to make a difference. Energy is an enabler. It cannot be the centerpiece.

Only when we link energy production to an industry that will produce income to support it does it make sense. In other words, the best projects have multiple positive outcomes for minimal cash input.

Let’s take an example of a private or public solar powered farming project. The project will achieve economic objectives from production of crops, climate change objectives from use of clean energy, and social impact objectives by creating jobs, including micro enterprises. Another by-product of this venture is that the excess energy that is generated can be distributed to the communities around the project. The same applies to on-grid electricity.  Large energy driven operations reduce the cost of energy on aggregate, thereby trickling down the cost reduction to consumers, including MSMEs who would otherwise not start up, or find energy too expensive to keep their doors open.

In short, if we solve the demand question through generating economic demand such as manufacturing, energy consumption will be a natural, affordable by-product.

Original Article courtesy of:

Jane Mwangi, AJW Africa CEO in The Standard 22 Aug 2021