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Leaping Backwards: Why is Energy Poverty Rising in Africa?

By Sean Sweeney - New Labor Forum, July 18, 2022

How can the world end energy poverty in the Global South and simultaneously reduce greenhouse gas emissions to fight climate change? In 2021, 860 million people had no access to electricity. [1] Today, a third of all humanity lacks access to reliable power. Roughly 2.6 billion people heat their homes with polluting fuels and technologies, and using traditional stoves fueled by charcoal, coal, crop waste, dung, kerosene, and wood.[2] The majority of families in the Global South are today able to turn on an electric light—and therefore have “access to electricity” for at least some hours in the day—but for many that is as far as it goes. For other basic needs, dirty and perhaps life-threatening energy continues to be the norm.

The urgency of providing energy to the great numbers of people in the Global South who lack it runs headlong into the necessity to divert climate disaster by reducing worldwide carbon emissions. It is this challenge that sits at he center of current debates on “sustainable development.” For some years, the standard answer from the climate policy world has been the following: the Global South is well positioned to “leapfrog” the phase of centralized energy and jump feet first into the transition to modern renewables, in the same way as mobile phones have proliferated in the developing world without first having to install traditional land-line infrastructure.[3] Whereas large nuclear, coal, and gas-fired power stations and hydroelectric dams take years to build, by comparison wind, solar, and battery technologies are small, easy to install, and, the argument goes, increasingly affordable. Rural communities without electricity can set up stand-alone “micro-grids,” so there is no need for traditional transmission and distribution grids which are expensive and inefficient. The Global South—which refers broadly to Africa, Latin America and the Caribbean, the Pacific Islands, and the developing countries in Asia—is blessed with so much sun and wind, there is no reason why energy poverty cannot be consigned to history relatively quickly.[4]

That is the good news. The bad news is that it is not happening, and there are few signs that it will.

As we will see, access to electricity is growing in the Global South, but it is mostly by generating fossil-based energy and is therefore anything but climate friendly. Meanwhile, electrification using mainly renewable energy (known as the “RE electrification scenario”) is being hamstrung by policies that are aimed at attracting the private sector and mired in the politics of “green structural adjustment.”

More than anywhere else, sub-Saharan Africa (SSA)—where most of the world’s energy poor live—illustrates the extent and gravity of this policy failure. But, even to begin talking about alternatives, we need to know what is happening, and that is not easy when key reports from the U.N. system seem reluctant to draw attention to important facts because they do not fit in with the dominant neoliberal narrative.

Unlucky Seven

In 2015, the U.N. adopted the 2030 Agenda for Sustainable Development, which includes seventeen Sustainable Development Goals (SDGs). Goal 7 calls for, by 2030, “universal access to affordable, reliable, sustainable and modern energy for all, along with urgent action to increase substantially the share of renewable energy and double the rate of improvement in energy efficiency.”[5]

More energy, but clean and climate friendly—who can argue with that? But as things stand now, this target is a fantasy. The only way to get within shooting distance of SDG7 is via a global public goods approach, one that returns to the basic principles of public service delivery, aimed at meeting core human needs. In previous columns, I have made the case for such an approach, and a sober assessment of the energy poverty challenge makes the case even stronger.

Unpowered People

Reaching 100 percent electrification by 2030 presents a daunting task.

A close look at SSA, where energy poverty is greatest, clarifies the enormity of this challenge. Due in part to population growth, there are more people without electricity in SSA today than was the case in 1990.[6] Roughly 70 percent of clinics in SSA have no access to reliable electricity, and 25 percent have no access at all.[7] In 2017, 573 million people in SSA (i.e., 53 percent of the population) lacked access to electricity.[8] For every ten people in the world without electricity, seven live in the region. And yet SSA is not the only challenge facing SDG7. Based on existing policies (what the International Energy Agency [IEA] calls the “Stated Policies Scenario”), some 660 million people will still lack access in 2030. To meet SDG7’s 100-percent target, “The access rate will have to more than triple between now and 2030. In [SSA] alone, this would mean connecting around 85 million people each year.”[9] Today’s policies, says the IEA, will “fail to deliver full access to energy for all or provide a substantial improvement in air quality.”[10]

A Wired World

SDG7 may already be out of reach, but what is it about the “stated policies” that made it so? Could these policies be changed? These questions demand clear and convincing answers. Meanwhile, electricity access levels have increased almost everywhere (except SSA, that is), often quite dramatically. According to a multiagency report led by the World Bank that tracks SDG7, the share of the world’s population with access reached almost 90 percent in 2019, up from 83 percent in 2010. The number of people lacking access fell from about 1.2 billion to 759 million during this period. Before Covid-19, roughly 130 million people per year were gaining access to electricity for the first time.[11] Latin America and East Asia are today almost 100 percent connected, although South Asia still has 20 percent of its people without power. Electrification was mainly driven by advances in India (263 million connected) and Bangladesh (53 million connected).[12]

According to the IEA’s “India Energy Outlook 2021,” “Near-universal household access to electricity was achieved in 2019, meaning that over 900 million citizens have gained an electrical connection in less than two decades.”[13] In 2015, India announced a target of 160 GW of wind and solar capacity by March 2022.[14] In June 2018, the country’s energy minister announced, “We will cross the target of 175 GW of renewable energy before 2022,” and upped the target to 225 GW.[15] In 2019, India announced it would install 450 GW of renewable capacity by 2030. SSA’s exceptionally high and worsening levels of energy poverty are often compared to India’s accomplishments, and its “climate ambition.” Pro-corporate “multi-stakeholder groups ”attribute India’s success in addressing energy poverty to its enthusiastic implementation of neoliberal reforms and the creation of an ‘enabling environment’” for the private sector.[16] This is very misleading. Even the World Bank acknowledges that India provides a good example of  “utility-driven, grid-based electrification programs backed by clear political targets and public investment.”[17] For renewables, India has brought in private companies known as “independent power producers” or IPPs, but the IPP’s contribution to electrification has been marginal.

The Indian Power Sector: No Model for Africa

SSA-India comparisons fail to point out two very significant truths. First, India will fall well short of its 2022 targets. By March 2021, cumulative wind and solar installations were under 79 GW, nowhere near either the 175 GW or revised goal of 225 GW.[18] Second—and more significant—India’s road to almost 100-percent access has been paved with coal. The IEA notes that “The rise of renewables in India’s power sector has been a major success story,” but today wind and solar account for 7 percent of India’s electricity generation, and coal’s share is 70 percent. Between the 2015 and 2019 period, 58 GW of new coal-fired power came online, outstripping new wind and solar generation  by roughly three to one.[19]

What India has done is therefore not consistent with SDG7, which aims to achieve 100-percent access mainly through the expansion of renewables. And yet, rather than asking tough questions about India’s impending energy trajectory, the World Bank’s “Tracking SDG7” report praises India for its outstanding achievements.

Waiting for a Leap Year

For many environmentalists, the “leapfrog” scenario appears perfectly plausible, in which case SSA’s struggle with energy poverty is likely to be a bit bewildering. Studies show that Africa has  wind energy resources estimated to be 250 times the annual electricity demand.[20] The continent has solar energy resources estimated to almost 1,000 times the  continent’s annual electricity needs.[21] Clearly, if electrification simply depended on the availability of wind and sunshine, then SSA would have reached 100-percent access by now.

But, in late 2019, only 7.4 GW of solar and 5.7 GW of wind power were operational in the entire continent.[22] By way of comparison, Asia has installed 258 GW and Europe 195 GW of wind power. Spain has installed more wind and solar capacity than forty-eight SSA countries combined.[23] For a number of years, it seemed that “off grid solutions” would be the equivalent of mobile phones in that their proliferation would largely circumvent the need for traditional transmission and distribution grids. “Off-grid  solutions” include such things as solar lamps and small solar panels that can barely charge a mobile phone let alone power a small refrigerator. In 2019, 105 million people reportedly had access to “off-grid solar solutions” and almost half of them (fifty-one million) were in SSA.[24] Off-grid solar sales nearly tripled in SSA between 2016 and 2019.[25]

But what does this add up to? Unfortunately, not a lot. In SSA’s case, the vast majority of solar solutions fall into the “Tier 1” category, in other words, limited daily availability of low-voltage electricity. These solar devices provide an alternative to kerosene lamps and may reduce the use of diesel generators.[26] Off grid, for sure, but not exactly a solution to the lack of reliable electricity.[27]

Meanwhile, globally, the number of people connected to mini-grids grew from five million in 2010 to eleven million in 2019.[28] That is pretty unimpressive, given the number of people who still need energy. All told the leap toward renewable energy has been pretty lifeless. “RE-electrification” is barely visible in SSA, and it is being marginalized across the South as major developing countries continue to rely mainly on coal and gas to meet energy demand.

No Renewables? Blame the State

Fourteen years ago, in 2008, the World Bank attributed Africa’s energy crisis to the unwillingness of governments to follow the neoliberal energy reform agenda. Disapprovingly, it noted,

Nowhere in sub-Saharan Africa does one encounter the “standard” reform model, that is, unbundling, privatization, and wholesale and retail competition . . . Nowhere do residential or commercial and industrial customers pay full cost- recovery prices, a mixed legacy of subsidies based on concern for the poor and outdated industrial policy.[29]

At that time, the World Bank maintained that energy poverty in SSA would persist until state-owned utilities were able to “fully cover operating costs and at least some share of capital costs.” “Full cost recovery” was, and remains, the main metric of viability.[30] The World Bank also exhorted SSA governments to create an “enabling environment” to attract private investment in generation capacity and make space for private IPPs.[31] Of course, these two policies are not compatible with each other. If a national utility loses market share to private companies that are protected by long-term power purchase contracts, then “full cost recovery” becomes more difficult to achieve. Thus, the traditional engines of electrification (the national utilities) are unable to complete the task that they were set up to accomplish, which is to extend access as a means to advance human and economic development. Seemingly oblivious to the fact that their policies might have contributed to SSA’s energy poverty, the World Bank and its regional body, the African Development Bank (AfDB), continue to promote the idea that market reforms will “unlock” private investment and give the lazy frog some needed shock therapy to make it leap. According to the AfDB,

The lack of funding for the power sector in Africa is often because investment options are nonexistent rather than a shortage of capital. Market entry in the sector can be facilitated through the structural separation of generation, transmission, and distribution, which is lacking on the continent.[32]

In other words, integrated national utilities should be broken up (“unbundled”) to catch the eye of investors.[33]

Damming Africa

Neoliberals routinely pass judgment on countries of the Global South for what they have failed to achieve, seldom acknowledging what they were able to achieve during their postcolonial nation-building period of development, that is, before the International Monetary Fund and the World Bank began their multidecadal war against public services.

Consider this: if half of the population of SSA had no electricity in the mid-2000s, how then did the other half get connected? South Africa’s public system was built around coal, but for the remaining SSA countries, close to 70 percent of electricity production came from hydropower. But who built the dams? As the World Bank notes, “Traditionally, planning and procurement of new power infrastructure were the province of the state-owned utility. With the advent of [neoliberal] power sector reforms and the introduction of IPPs those functions were often moved to the ministry of energy or depended on the availability of wind and sunshine, then SSA would have reached 100-percent access by now.[34]

Did it work? Apparently not: “A simultaneous transfer of skills did not always occur, however, resulting in plans that were not adequately informed by the complexities on the ground—namely the new hybrid market, composed of private and public actors.”[35] The World Banks’ attempt to attribute the enduring lack of generation capacity to a “transfer of skills” problem and to “complexities on the ground” is flimsy. It is also nonsensical in that it was the push to dismember and disable national utilities that created these problems in the first place. But the deeper and more disturbing truth is that, in SSA and elsewhere across the Global South, neoliberal reform was an experiment that has gone badly wrong. The lack of capacity, alongside crippling levels of foreign debt and inadequate investment, is largely due to the weakening of the state-owned utilities. Seemingly unaware of the irony, the World Bank today bemoans the fact that “over 90 percent of Africa’s economically viable hydropower potential, equivalent to about one-tenth of the world’s total, is unexploited.”[36]

Ecuador’s Triumph

No one knows for sure how SSA’s electricity systems might have evolved if the public utilities had remained intact and fully resourced. But a glimpse into what might have been possible—and could still be possible—is provided elsewhere in the Global South by Ecuador during the term of leftist President Rafael Correa.

Elected in late 2006, Correa’s political message was “markets do not govern, states do.” A new Constitution was adopted in 2008 by way of a referendum. Article 313 read, “The State reserves the right to administer, regulate, monitor and manage strategic sectors” among them “energy in all its forms.”[37]

In 2008, energy poverty levels in Ecuador were above 50 percent in the rural areas. Hydropower provided 44 percent of power generation (1,640-MW installed capacity).38 In 2007, Correa announced the simultaneous construction of eight major hydropower projects.[39] One hydroelectric system, the 1,500-MW Coca Codo Sinclair, became operational in 2016 and was able to meet 30 percent of domestic electricity demand. Currently, Ecuador has more  than 5-GW hydropower capacity in operation and has added more than 600 km of high-voltage transmission lines  to extend the grid.[40] Ecuador’s hydropower today generates more electricity than all the solar panels that are currently installed in SSA, by far. Ecuador has reached 97-percent electrification. The story of Ecuador illustrates how a public approach opens pathways to electrification that both depart from the structural adjustment script and  produce better results.

South Africa’s Energy Disaster

Contrast Ecuador’s success with South Africa’s great leap backwards.

Prior to the fall of Apartheid, Eskom, the national utility, mainly served large mining and chemical sectors. At the end of 1993, a year in  advance of Nelson Mandela’s inauguration, just 36 percent of the population, and only 12 percent of rural dwellers, had access to grid electricity. In the mid-1990s, the new government of the African National Congress (ANC) instructed Eskom to extend access, and both the utility and the ruling party knew full well that the recipients of electricity would not be able to pay for the full cost of the service, but the benefits would come in improvements in education, health, productivity, and so on. In the five-year period to 1999, electrification increased from 36 percent to around 66 percent.[41]

But just as electrification was advancing, the ANC pivoted away from its earlier commitment to socialist economic planning and embraced the neoliberal agenda. A 1998 White Paper laid out a series of proposals to “unbundle” Eskom and to sell 30 percent of its generation capacity. In 2001, the government told Eskom not to invest in new generation “in order to ensure meaningful participation of the private sector.”[42]

Seeing no private investment, in April 2004, Eskom warned that “load shedding” (power cuts) would be inevitable. The government then reversed its decision to exclude Eskom from investing in new capacity. But it was already too late. The best Eskom could do was to build new capacity as fast as it could, and in 2005 the 4,800-MW Medupi coal-fired power station was given the green light. In 2008 Eskom reported, “The capacity shortages were foreseen . . . Problems that would previously have had little or no impact on supply due to adequate reserves now result in major consequences for customers.”[43] South Africa has subsequently endured years of crippling power cuts, grid extensions have been halted, and the energy poverty continues to increase.[44]

Clearing a Public Pathway to SDG7

Of course, after thirty years of neoliberal reform, it is difficult to admit that a massive mistake was made. In a remarkable 2018 report, the World Bank appeared to acknowledge that the marketizing of utilities and “full cost recovery” criterion is not compatible with fighting energy poverty after all:

Extending access to electricity to the peri-urban and rural periphery often leads a utility into diminishing and even negative marginal returns on investment, particularly if the power consumption of poor households remains very low. Thus, universal electrification cannot be achieved purely by allowing a utility to pursue commercial incentives.[45]

Today, energy access is growing globally and energy poverty, while extremely serious, is in decline. But electrification is, for the most part, not being driven by renewable energy. Rather, the main sources will continue to be gas and coal.

Whatever the technical potential of renewable energy technologies, the current policy framework means that there will be no leapfrog into a clean energy future, no playing out of the “RE-electrification scenario,” no grid-less delivery of power. Renewables will continue to grow, but not quickly enough. This “good news, bad news” situation must be addressed at the level of a global public goods framework that can offer clean energy as an alternative to fossil fuels. A crucial first step is to pull the curtain down on green structural adjustment and to come to terms with the fact that the private sector is not going to invest in a clean energy transition without the kind of private profit guarantees that many governments of the Global South find unacceptable. But public entities can, and should, develop a public approach, and fight for it like there is no tomorrow.

Such a policy change will not turn the sedentary frog into a prince, but it might give it a different kind of energy.


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