Optimizing Africa's Renewable Energy Potential Through a Robust Regulatory Framework
Africa Focus
Law Update: Issue 360 - Africa and Transport & Logistics
Laureen FredahTrainee Solicitor,Dispute Resolution
Climate change, government’s environmental agendas, and ambitious goals to slow down global warming, means there is a global focus on investment in renewable energy sources. Africa can be at the forefront of this conversation: the continent has abundant access to wind, sunshine, and water resources, combined with a wide assortment of other natural resources. The consequences of climate change and human activities, particularly the burning of fossil fuels such as coal, oil, and natural gas, involve severe weather events (such as hurricanes, droughts, and floods), rising sea levels, disruptions to ecosystems and biodiversity, and negative impacts on human health and livelihoods. Part of addressing climate change requires a global shift from fossil fuel-based energy systems to cleaner and more sustainable renewable and non-carbon intensive energy alternatives, wind, hydroelectric and geothermal and nuclear power. Africa’s vast renewable resources, coupled with the continent’s commitment to sustainable development goals, has the potential to facilitate a robust and supportive regulatory framework for renewable energy.
Africa’s energy needs are constantly growing due to increasing population, urbanisation, and higher incomes. Africa, as a home to 1.3 billion people, faces many energy challenges – approximately, 43 per cent of the population is unable to access reliable electricity. These challenges can serve as the impetus for creating new legal mechanisms and policy tools to promote investment in and development of renewable energy projects. Sure enough, Africa is focusing on these reforms. For example, the Economic Community of West African States (ECOWAS)’ Renewable Energy Policy aims to mainstream renewable energy and energy efficiency into the national policies of its members by agreeing to stronger regional cooperation and integration to accelerate this process. The hosting of COP27 in Egypt in 2022 was also an indicator of Africa’s focus on improving the environment. COP27 saw a historic commitment to stabilisation and improvisation of the environment. Amongst other initiatives, COP27 covered: (a) boosting the support of finance, technology and capacity building needed by developing countries; (b) funding arrangements, as well as a dedicated fund, to assist developing countries in responding to loss and damage wreaked from ongoing climate change impacts like the ongoing drought in East Africa; (c) setting a ‘new collective quantified goal on climate finance’ in 2024, taking into account the needs and priorities of developing countries; and (d) launch of a new five-year work program to promote climate technology solutions in developing countries.
In addition to this, the continent has been developing its own independent programs to support its environmental agendas and energy transmission. One such initiative is the Africa Energy Transition Programme, established by the Africa Union, to accelerate the African energy transition and transformation required on the continent, to foster economic growth, wealth creation, poverty eradication, and inequality reduction in a sustainable climate compatible manner.
The programme aims to provide an understanding of energy system transformations required to achieve energy transition by identifying the framework required to support the development of sectoral and technological detailed, policy-relevant, and country-driven strategies consistent with the national development agenda and global standards. The programme, amongst others, focus on building the energy infrastructure, development of renewable energy and de-carbonisation.
Given the natural resources available to it and the abundance of sunlight, Africa stands at an advantage for solar power generation, which has led to remarkable growth of solar photovoltaic installations for powering households, businesses, and communities. Thus, the need of a legal framework to regulate renewable energy, including the generation, transmission, and distribution of solar power.
Morocco is leading this initiative, with more than a third of its electricity already renewable due to the Noor Complex Quarzazate Solar Power Station, the world’s largest concentrated solar power farm. This success can partly be attributed to the adoption of bill amending laws (Law No. 40. 19) on renewable energies, regulation of the electricity sector and the national electricity regulatory authority. This Law is aimed to simplify the authorisation procedures and to strengthen the attractiveness of the renewable energy sector for national and international investors.
Other initiatives include:
Zambia and Zimbabwe’s partnership on the Batoka Gorge hydroelectric power project in 2020 for generation of 2,400 GWs of electricity, as a follow up of the memorandum of understanding entered into between them in 2012. The project and the understanding between the two countries derives support from various domestic legislations including: (a) Zambia’s Seventh National Development Plan of 2017 and the National Energy Policy of 2019, which sets out Zambia’s strategies for the development and use of renewable and alternative energy sources; (b) Zambia’s Electricity Act no. 11 of 2019 and the Energy Regulation Act no. 12 of 2019, which provide for licensing of electricity generation, transmission, distribution, and supply; and (c) Zimbabwe’s National Development Strategy Phase 1 (2021-2025) (NDS 1) introduced by the government in 2021 with targets to increase power supply from the current installed capacity of 2,317 MW to 3,467 MW by 2025, with 1,100 MW from renewable energy sources; to create an Independent System and Market Operator to assist in generation resource planning and buying of power from generators; and to construct an additional 280 km of the electricity transmission and distribution network by 2025.
Tanzania’s: (a) formalisation of Rural Electrification Expansion Program for facilitating the distribution of solar home systems and mini-grids to improve energy access for rural communities; (b) establishment of National Carbon Monitoring Center, within its Ministry of Environment, for regulation of carbon credit projects, in line with the Kyoto Protocol and the United Nations Framework Convention on Climate Change.
In addition to the availability of resources for generation of solar energy, Africa’s geography, places it in a favorable position to be able to harness energy from wind, which has led to the development of various wind energy projects including:
Kenya’s Lake Turkana Wind Power Station, which is Africa's largest wind power installation comprising 365 wind turbines providing enough energy to power one million homes;
Ethiopia’s Adama I with 34 wind turbines and Adama II with 102 wind turbine farms generating a total nominal energy of approximately 200,000 KW;
Senegal’s Taiba N’diaye Wind Farm, with 46 wind turbines, with an installed capacity of 158.7 MW, fully operational since 2021.
Such projects do not only have the potential to bridge the energy supply gap but also promote the economic growth. While some of these countries including Kenya, have undertaken sectoral reforms (such as the Draft Kenya Energy Sector White Paper 2022, the Energy Act 2019, Kenya FiT Policy 2021, and the 2021 Renewable Energy Auction Policy), there is a need of robust regulatory framework to efficiently regulate the licensing of activities and utilisation of these resources.
Tapping into the water resources, Africa is home to vast networks of rivers and waterfalls with untapped potential. Despite the controversy that has marred the project, Ethiopia has been investing extensively in large-scale hydroelectric projects like the Grand Ethiopian Renaissance Dam, with a capacity of 6,450 MW and the Gilgel Gibe III Dam, with a capacity of 1,870 MW. Similar to the regulation of other resources, this too, presents a need to develop: (a) robust legislations covering its regulation, including a licensing regime for generation, utilisation, transmission, and storage; (b) policies regulating the cross-jurisdictional relationships, with neighboring countries, who are likely to be impacted as a result of these projects; and (c) memorandums of understanding with countries being impacted. In 2015, Sudan, Egypt and Ethiopia signed an initial deal to end a long-running dispute over the sharing of Nile waters and the building of the hydroelectric dam, in Ethiopia.
Home to 1.3 billion people, Africa faces many energy challenges, where 43% of the population cannot access reliable electricity.
Geothermal energy is another source that Africa is diversifying into. Africa’s Great Rift Valley provides a great opportunity, and countries like Ethiopia and Kenya are tapping into this resource, constructing geothermal power plants that would provide a stable and environmentally friendly energy supply. This will not only lead to lower greenhouse gas emissions but also build resilience through reliance on a diversity of energy sources. This ought to be developed within a legal framework that protects environmental and community interests while allowing for sustainable extraction and use of geothermal resources. In this regard and as a step towards the regulation of geothermal resources, the Parliament of Kenya recently tabled the Climate Change (Amendment) Bill, 2023 for amending the Climate Change Act 2016 to reiterate and update its commitment to sustainable use of renewable energy.
As a commitment towards environmental stability, all African nations (except for Libya) have ratified the Paris Agreement on Climate Change, as of June 2023. In addition to this, these nations continue to improve their regulatory and political frameworks for development and financing for these projects. In addition to those referred to in the foregoing paragraphs, these frameworks include:
Uganda’s Climate Change Policy 2015 and the Renewable Energy Policy 2007 leading to the enactment of the Climate Change Act, 2021, giving effect to the UN Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement; and
Senegal’s Electricity Code, which aims to facilitate universal access to electricity by 2025.
These frameworks have led to increased financial backing for some of these projects. In June 2018, Gigawatt Global Cooperatief signed a deal with the 15-nation Economic Community of West African States to build USD1 billion worth of renewable energy projects in the region. This re-emphasises the need of having a robust legal structure aligned with global standards for attracting foreign investments and enhancing bankability of projects.
The African continent finds itself at a critical crossroads in pursuing green energy. With the continent’s abundant renewable resources and huge energy needs, directing a rapid and pervasive transition towards sustainable energy solutions is critical. Although there are obstacles, especially in the areas of economic hardship and infrastructure, the potential outcomes far outweigh these obstacles. In examining this issue from a regulatory perspective, the creation of credible and enforceable regulatory frameworks and policies can act as a strong catalyst for Africa’s green energy. These regulatory frameworks can attract investment, ensure industry growth, and protect the environment and local interests, thus building a continental sustainable energy future. Key stakeholders in this transformation, including government agencies, energy producers and the financial sector, must join forces to realise their greatest potential.
For further information, please contact Laureen Fredah.
Published in August 2023
