In this interview, ESI Africa Magazine, spoke with Ivie Ehanmo, Founder of Electricity Lawyer, in an exclusive Women in Energy interview.
In the latest issue of the ESI Africa Magazine spoke to five women in the energy industry about the importance of policy and regulation in African utilities. These phenomenal women also spoke on the prominent focus areas that they believe should be afforded more attention. Here is what Ivie Ehanmo said:
To reach an energy transition future for African utilities, what policy and regulatory considerations should be borne in mind?
Africa’s race to net-zero (and, in effect, its energy transition pathway) is on a different trajectory than its global counterparts. The region currently suffers from energy access challenges.
Hence, on the one hand, there is a need to realise the objectives of the United Nations Sustainable Development Goals (SDGs), particularly SDG7 which seeks to ensure access to affordable, reliable, sustainable and modern energy for all.
Given the energy poverty challenges plaguing the region currently, attaining this objective will require massive investment in new energy infrastructure to ensure access to reliable electricity.
At the other end of the spectrum is the need to adhere to the UN Framework Convention on Climate Change (also known as the Paris Agreement), for which most African countries are signatories. The framework envisages the region’s contribution to carbon emission reduction albeit that per capita energy consumption across the region is generally low.
Policy around energy transition in Africa revolves around several areas including renewable power generation, rural electrification, energy for cooking, the role of gas, transmission and distribution and regional cooperation, etc. Nevertheless, policies promoting energy access, in general, must have utmost priority, bearing in mind the fuel mix dynamics across the region and the prevalent energy security concerns. There is an opportunity for Africa to carve out policies that align and balance the twin goals of SDG7 and the Paris Agreement.
Africa as a region is richly endowed with vast renewable energy potential. With the rush for mineral resources required to build wind turbines, batteries, etc. there will be a heightened demand for resources such as cobalt from the Democratic Republic of Congo (DRC), Ivory Coast, Sudan, etc. Clean energy investments are set to soar. Considering the above and other factors, African governments must begin to diversify their respective energy mix without jeopardising energy access and energy security concerns over commitments to any form of energy transition pathways. A tailored strategy must be developed and implemented to allow for the prioritisation and deployment of ALL available resources through cleaner techniques and mechanisms. Diversity of energy sources will avoid any form of geo-political wielding of power by a dominant supplier, thus creating market security for energy producers.
There is an opportunity for Africa to carve out policies that align and balance the twin goals of SDG7 and the Paris Agreement.
Policy and regulatory frameworks must be just and inclusive. Recommendations include:
*Electricity laws and regulations that promote distributed generation should align with Investment laws.
*Implementation of climate mitigation policies by amending existing laws or introducing new climate-specific policies within national electrification agendas.
*Allowing sufficiency of scope for renewable energy investment incentives.
*Solid policy framework needs to be established by policymakers that can influence the Levelised Cost of Electricity – comparing the power generation costs of various technologies.
*A policy framework that allows for the competitiveness of renewable energy, such as the removal of subsidies for fossil fuels, internalisation of negative externalities, liberalisation of power markets, building institutional capacity, grid enhancement, etc.
In addition, such policies must consider the implications and challenges associated with prevailing energy poverty, equity, low energy consumption and energy needs for economic growth and transformation. A fair and balanced energy policy approach should be adopted and may factor in the diversion of revenues generated from fossil fuel investments towards investments in cleaner energy, which over time may outweigh fossil fuel dependence.
However, there must be room for transformation with existing resources leading to the transition.
If given the authority, what would be your chosen focus area in the energy sector?
The weak link in energy and infrastructure investment in Africa, particularly in the electricity sector, is the state-owned utilities. The majority of the electricity market structures across Africa are based on a Single-Buyer model whereby Independent Power Producers contract with the state-owned utility as the single buyer. A successful energy transition and decarbonisation agenda cannot yield any positive outcome if the current market structures remain unabated in terms of poorly performing and politically exposed state-owned entities with limited capacity to adapt to the decarbonisation agenda from a technical and managerial standpoint.
For example, the use of domestic low-carbon technology will have major impacts on the low-voltage network and the distribution system in general. African utilities need to be equipped for future changes beyond the general narrative in the public media. The focus must shift to equipping African utilities for the journey ahead. As suggested by a renowned industry expert: these utilities need to join working groups and organisations and learn from utilities that have undergone such changes. In my opinion, this is what a ‘just transition’ lens looks like.
Therefore, technical assistance should be offered by national, regional, and international institutions, regulators and competent utilities to build the capacity required for a ‘just energy transition’.
