Sub-Saharan renewable energy. Assessing strategies and interconnections of producers


Research Paper (undergraduate), 2016
8 Pages, Grade: B

Excerpt

Title: Sub-Saharan renewable energy: Assessing strategies and interconnections of producers.

Abstract

Renewable energy systems have been identified as key driver of sustainability and economic development. Kenya, among the Sub-Saharan countries is considered as one of the frontrunners for catalyzing economic growth by the development of their energy sectors. There are lots of potentials for solar energy in Kenya and it has one of the most active commercial Solar PV sectors in the developing world. This study is going to examine the implementation of two renewable electrification technologies; solar PV and wind. In this proposal, literature review section presents a short and clear understanding of previous researches around this topic. This study intends to adopt qualitative method with PESTEL and multi criteria analysis. According to the expected result, this project is aiming to establish policies that contribute to universal energy access and reduction of energy poverty in Kenya.

Keywords: Sub-Saharan countries, Kenya, renewable energy, energy source, technology.

1 Introduction & Background

Renewable energy technologies have been clearly identified as a key stagnation of sustainability and economic development (Centi, Quadrelli, & Perathoner, 2013; H. Lund & Mathiesen, 2009; P. D. Lund, 2009). Modern energy systems affect the quality of life and supports three pillars of sustainable development: social equality, economic growth and environmental protection, which are very significant concerns in developing countries. As elsewhere, in Sub-Saharan African countries there is a high correlation between low per capita consumption of commercial energy and low per capita gross domestic products (Kebede, Kagochi, & Jolly, 2010). In a continent where both per capita income and energy consumption are tragically low, renewable energy could be a valuable contribution to economic growth.

Several developing countries among in Sub-Saharan Africa (SSA) are considered as frontrunners for catalyzing economic growth by the development of their energy sectors. These are Ethiopia, Kenya, Benin, Malawi, Ghana, Uganda and Zimbabwe (Deichmann, Meisner, Murray, & Wheeler, 2011). Lack of access to affordable electricity is a major determinant of poverty in SSA. Urban populations remain underserved by inefficient, unreliable systems, while many rural villagers have no access to electricity except for power provided to relatively affluent households by small, privately owned generators.

Kenya has committed itself to a massive expansion of renewable energy with a focus on electricity produced from wind turbines. A delegation from Germany, Denmark and China took inspiration in Kenya to create a national strategy for renewable energy and considered how these countries focus on industry, research & development (Kiplagat, Wang, & Li, 2011; Liming, 2007). Kenya has traditionally relied mainly on fossil fuel generation and on hydro-electric power which is unreliable due to changing weather conditions and to recent increases in dry seasons. According to a recent study, Kenya is a gateway to East and Central Africa and is an active player in redynamizing of the East African Community, which now comprises Kenya, Uganda, Tanzania, Rwanda and Burundi (Guta, 2012). Because of potential investment by foreign small & medium firms, developing countries in SSA have a growing free market economy (Bazilian et al., 2012; Deichmann et al., 2011; Jumbe, Msiska, & Madjera, 2009). The Kenyan government encourages investors to invest in various sectors, such as electricity connections, biogas and solar energy by offering tax exemptions on equipment. Kenyan electricity demand has been rising significantly and that has resulted in an increase of investment.

There is a lot of potential for solar energy in Kenya and it has one of the most active commercial Solar PV (Photovoltaic) sectors in the developing world (Kiplagat et al., 2011). Kenya designed National Energy Policy so as to facilitate provision of clean, sustainable, affordable, reliable, secure, cost-effective and environmental friendly energy services. The electricity supply has historically increased, but that could not keep up with demand. Therefore the Kenyan government has decided to increase the country’s energy supply, close the demand gap and ultimately enable economic growth for Kenya (Yadoo & Cruickshank, 2012).

Objectives, purpose and aim

The main objective is to increase electrification in a high margin by 2020 and 2025 through grid extensions, mini grids and home systems. This study will examine firstly, how outcomes of international and national cooperation on low carbon technologies can be shaped and transformed to support the current electrification efforts in Kenya in a way that enhances development in a broader sense. Secondly, it is to enhance knowledge on North-South and South-South cooperation in deployment of renewable energy. Finally, this study is to equip stakeholders with a better foundation for selecting and deploying available technologies in a way that increases inclusiveness and contributes to poverty reduction. Other objective of this study is to aim at addressing producer dominance in the case of complex technology and uneven distribution of technological competence and economic power. This research will also identify how to raise local capabilities both in individuals, locality, enterprises and knowledge institutions. The ultimate aim is to contribute to the creation of universal access to modern energy services, thus contributing to the reduction of energy poverty. The main purpose of this study is to contribute to the creation of renewable energy services, so that it can assist to reduce energy poverty. This research is to equip stakeholders with an improved understanding of concrete and efficient ways to combine efforts of electrification with the management of international interactive learning between producers, suppliers and users. So that the stakeholders will have a better foundation selecting and deploying available technologies in a way that increases inclusiveness and contributes to poverty reduction. This study aims to build a stronger research capacity about sustainable development with a theoretical contributions and applied studies that combine value chain with innovation perspective. This study is going to examine the implementation of two renewable electrification technologies; solar PV and wind. There is a special focus on applications in the form of small scale energy production with special relevance for rural access to electricity.

Research Question

Therefore main questions of this study are:

- What are the current concerns about producers, suppliers and users in Sub-Saharan renewable energy?
- How to assess the strategies and interconnections of producers in Europe and China with users in renewable energy markets in Kenya?
- How are the channels of supply for wind and solar PV market in Kenya?

In order to answer these main questions the sub-questions are divided into following sections:  Global technology collaboration

1) Where will the most relevant technologies for wind and solar driven electrification in Kenya come from?
2) Is South-South technology collaboration more relevant in this respect, compared to North-South collaboration?
3) How important is the ‘software’ element of this technology cooperation compared to ‘hardware’ element?  Policies and institutions
1) How to design policies to ensure that the process of renewable electrification in Kenya leads to local job creation and income generation?
2) What incentives will be necessary to make the adoption of these technologies more attractive?
3) What types of technological and soft capacity building are most urgently needed?
4) How can job creation and value added be located in Kenya rather than predominantly invest in supplier countries?

5) Do joint ventures play a role here?

2 Literature Review

According to clean energy ideas, renewable energy is defined as natural energy which does not have a limited supply (Twidell & Weir, 2015). Therefore, Energy Regulatory Commission of Kenya (ERCK) exposed several renewable sources, which has been mostly used often in Kenya. Such as; biomass which comprise wood and wood waste, municipal solid waste, landfill and biogas, ethanol and biodiesel, water, geothermal, wind and solar energy.

Energy markets in Sub-Saharan Africa

Petroleum and electricity dominate energy sectors while firewood and charcoal predominant in meeting basic energy needs in rural areas (Ondraczek, 2013). It is targeted that by 2022 electricity should reach 65 percent in Kenya. Analysis indicates that there are high dependency on wood fuel and other biomass at about 68 percent of total energy consumed. Petroleum takes 22% and electricity 9%. Installation capacity is 1.48GW, which hydro power and thermal are comprised of 57% and 32% respectively while the solar PV and wind power contribute only about 1% (Deichmann et al., 2011). Fossil fuels, geothermal, biogas cogeneration and wind contributed 32.5%, 13.2%, 1.8% and 0.3% respectively. In 2015, demand for electricity was 1,191MW and is projected to grow 2500 MW and 15,000MW.

Solar: Sunlight is defined as a renewable energy source. Solar panels convert sunlight into usable energy. Solar thermal panels use sunlight to heat water for washing and heating, while solar photovoltaic (PV) panels convert sunlight into electricity (Edfenergy.com). Sub-Saharan countries receive a high insolation rate with an average of 5-7 peak sunshine hours and have the most active commercial solar PV markets in developing world (Nygaard, 2009).

Wind: Among all Sub-Saharan countries, Kenya has low exploitation levels of wind energy with installed capacity of 5.1 MW at Ngong site operated by KenGen (Ondraczek, 2014).

Waste-to-energy: Sub-Saharan countries are in the process of utilizing waste for energy. As a way to find solutions to waste challenges, Ministries of Environment and Mineral Resources collaborate with the United Nations Industrial Development Organization (UNIDO) to carry out Research & Development.

Geothermal: According to several researches, geothermal resources in Sub-Saharan countries are the most suitable source for base load electricity generation in these countries because the rain does not affect drought and climatic variability. It has the highest availability at over 95% and among green energy with no adverse effects on the environment (Deichmann et al., 2011).

Investments and investors in energy sector

Despite availability of renewable energy sources in Sub-Sahara and Feed-In-Tariff in place (FiT) policy in place, the real investments in energy sector remain relatively small (Greenberg, 2014). Energy Regulatory Commission 2014, Kenya imports about 30MW of hydroelectricity power from Uganda to serve western part of the country in order to try and meet its energy demands. They have an agreement with Ethiopia on a deal to import 400 megawatts (MW) at US$0.07 per kilowatt an hour. The construction of the interconnector was expected to take place from early 2013 by French Development Agency and African Development Bank and end by 2016 at a cost of US$1.2 billion.

Due to the rapidly expanding market for solar panels, the overseas companies are positioning themselves to invest in Sub-Saharan countries. For instance German, Danish and Chinese manufacturers of solar panels have expressed willingness to enter the market as demand for cleaner sources of energy. Kenya is a major market for solar panels same as other fast growing economies in Sub-Saharan Africa (Caracciolo & Santeramo, 2013).

The role of government and other stakeholders

Ministries of Energy are in charge of development and implementation of state’s energy policy and ministries are also partly responsible for the operations of the state-owned utilities in the country and Rural Electrification Program (Deichmann et al., 2011). Renewable Energy Departments that are under the Ministry of Energy mandate to promote and develop appropriate renewable energy technologies, policy formulation, review and analysis.

Demand: main buyers and procedures

The main buyers are the households, commercial and public services, traffic and transportation, agriculture, industry and tourism (Kaygusuz, 2011). Households needs heat for cooking, warming water and power for lighting, communication and electronics. Commercial and public services needs power, heat, fuels and comprise of education, Health Care and business administration. On infrastructure, energy is needed for water supply, sanitation, waste management and communication.

Political factors: According to Kenyan national bureau of standards (KBS), after the disputed elections, constitutional reform created more effective system of checks and balances is a key element of the reform agenda agreed as part of the power-sharing agreement (Lay, Ondraczek, & Stoever, 2013; Ulsrud, Winther, Palit, & Rohracher, 2015).

Economic factors: The objective of Kenyan strategy 2030 is to make Kenya a globally competitive nation (Vision, 2012). Energy as part of infrastructure was identified among the enablers of socio-economic transformation of the economy envisioned to provide cost-effective, world class infrastructure facilities and services.

Social factors: Though there are about hundreds of ethnicities in Sub-Saharan Africa, urban/rural inequality and unequal access to the resources are more significant concern (Deichmann et al., 2011). Technological factors: According to Kenya National bureau of statistics, Kenyan technology have advanced tremendously in last 10 years (Mandelli, Barbieri, Mattarolo, & Colombo, 2014). The investment opportunities among the opportunities in data analysis in business process outsourcing are availed for faster socio- economic development of the country.

Natural resources: Sub-Saharan developing countries have natural resources such as limestone, soda ash, salt, gemstones, fluorspar, zinc, diatomite, gypsum, wildlife and hydropower (Mohammed, Mustafa, Bashir, & Mokhtar, 2013; Suberu, Mustafa, Bashir, Muhamad, & Mokhtar, 2013). Also oil which was discovered within last decade, for instance after an exploratory drilling by Anglo-Irish firm Tullow Oil adds up to the above list (BBC news Africa 26th march 2012). More minerals are still undiscovered and search is ongoing. Moreover, there are several other issues related to GVCs in this countries, such as; culture & business culture, communications, business meetings & greetings and corruptions (Amigun, Musango, & Stafford, 2011; Morris, Barnes, & Esselaar, 2009; Renard, 2011).

3 Hypotheses

This study is going to be leaded by two key hypotheses. According to several recent researches hypotheses are established as follows (Lambe, Jürisoo, Lee, & Johnson, 2015; Ulsrud et al., 2015): H1: Emerging economies are in a particularly strong position to advance relevant and affordable technologies because conditions in Bangladesh, Brazil, Russia, India, China and South Africa are more similar to those in poor countries.

H2: Even the most recent technologies developed abroad will need to go through a process of transformation in order to become both efficient and inclusive in the specific context of Kenya.

4 Methodology

Method

This empirical research is going to adopt a qualitative approach with intent to capture attitudinal, affective and behavioral responses inherent to stakeholder experiences in Kenyan renewable energy. It is a type of scientific research, which consists of an investigation that seeks answers, systematically uses a predefined set of procedures (Richards, 2014).

Data collection

Primary source of data for this research will be obtained from semi-structured interviews (Ahlborg & Hammar, 2014) with key stakeholders within the renewable energy sectors in Kenya, Germany, Denmark and China as this research will take place in these countries and funded by the Danish Ministry of Foreign Affairs. A set of questionnaire will be prepared in order to access the renewable energy market in Kenya, the level of competition, renewable energy situation, potentiality of renewable energy resources, business environment, government incentives as well as the players in the renewable energy industry in the country. Different set of questionnaires are planned to send in order to achieve potential findings from German, Danish and Chinese companies interested in venturing into the renewable business market to smoothly set basement and exploit the huge market potential of Kenya. The target groups are renewable energy companies in Kenya, Government agencies such as the ministries of energy, the ministries of foreign affairs in the above mentioned countries, learning institutions such as universities, infrastructure investors, energy suppliers, current regulators and R&Ds.

Data analysis - Multi criteria analysis and PESTEL analysis

According to researchers, PESTEL analysis is used in empirical researches in order to analyze and monitor the macro environmental (external business environment) factors that have impacts on organizations (Ferreira, Garde, Fulli, Kling, & Lopes, 2013; Markovska, Taseska, & Pop-Jordanov, 2009). Therefore, in this study, PESTEL analysis is proposed to monitor and justify the business environment in Kenya. Again, policy making for sustainable energy requires methods that allow for the complexities of socio-economic and biophysical systems and that address uncertainties of long-term consequences (Mosadeghi, Warnken, Tomlinson, & Mirfenderesk, 2013). For this reason, this study is going to adopt a combinations of methods. Firstly, the researcher will support the exploration of complexities and uncertainties and second will organize the information and aid decision-making. Multi-criteria analysis (MCA) has become increasingly popular in the context of environmental decision-making about energy issues (Mateo, 2012). MCA is to compare different actions or solutions according to a variety of criteria and policies (Singh, Murty, Gupta, & Dikshit, 2012). According to several past studies, MCA is a form of Integrated Sustainability Assessment (Davis, 1999; Jefferson, 2014; Kowalski, 2012; Munday, Jones, & Lovett, 2010).

This study would like to adopt qualitative method with PESTEL and MCA analysis, which is defined as potent Integrated Sustainability Assessment (ISA) methodology (Kowalski, Stagl, Madlener, & Omann, 2009). According to the authors, ISA is an operational evaluation and decision support approach that is suitable for addressing complex problems and conflicting objectives in various forms of data and information. Moreover, researchers added, ISA aims to support the development of (long-term) cross-sectorial policies (Sharifi & Murayama, 2013).

5 Expected Results and Implications

This study is expecting efficient result that aligns closely with the ‘Right to a better life’ strategy (Flamos, 2010) for Denmark’s development cooperation, particularly with specific areas. Such as: increase access towards sustainable energy to local development, enhance capacity of innovation in technological and financial solutions in the area of energy. This study is expecting to provide a framework conditions for green growth that benefits the poor.

This Study is expecting a rise to new knowledge at several different levels that is significant for designing sustainable development strategies in Kenya and other African countries:

(1) This study will be able to provide an answer on South-South collaboration has a special relevance for inclusive development.
(2) This study is hoping to develop an awareness of the prerequisites for realizing the potential in international technological learning.
(3) This study is expecting to develop new theory and concepts by combining the national innovation system perspective with global value chain approach and through combining the innovation studies perspective with the science, technology and society perspective.

Same as other Sub-Sahara African countries, Kenya faces the challenge of increasing demand for modern energy services in the face of its high population growth. Therefore, new theory from this study is expecting to demand the access to better and more relevant knowledge regarding the opportunities afforded by low carbon technologies. These opportunities can be used to inspire more appropriate policy and decision making by users, producers, governments and other stakeholders.

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Excerpt out of 8 pages

Details

Title
Sub-Saharan renewable energy. Assessing strategies and interconnections of producers
College
Aalborg University
Grade
B
Author
Year
2016
Pages
8
Catalog Number
V413349
ISBN (eBook)
9783668646070
ISBN (Book)
9783668646087
File size
724 KB
Language
English
Tags
Sub-Saharan, Kenya, renewable energy, energy source, technology
Quote paper
Jobaire Alam (Author), 2016, Sub-Saharan renewable energy. Assessing strategies and interconnections of producers, Munich, GRIN Verlag, https://www.grin.com/document/413349

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