Untapping West Africa’s Renewable Energy Potential through Regional Integration

West Africa is a key hotspot of the continent’s energy transition efforts, as it features a growing demand for electricity, a fast-paced demographic and economic growth, and a wide, unexploited renewable energy potential.

Such an endowment is given not only by a great availability of natural resources, but also by some promising trends, outlined in the report Connecting the Dots, Accelerating renewable energy deployment with regional integration: a 10 years retrospective on West Africa, developed by RES4Africa in collaboration with Enel Green Power. Since 2010, the cost of solar and wind energy in Africa has decreased, respectively, by more than 82% and 40% (IRENA). Additionally, many West African countries are undertaking serious efforts to outline feasible power masterplans, and to implement them: this is the case of Ghana, where the government has set a target to produce to 1.360 MW of renewable power by 2030, or Senegal, where 60 MW of solar PV power were assigned at a competitive price through a 2016 tender.

Nonetheless, according to the World Bank, West Africa has one of the lowest rates of electricity access in the world (42% of the total population), and just a 21% of the generated energy comes from renewable sources.

Instrumental to this situation is a chronic lack of investments: in the face of $60 billion invested in African renewables and storage during the last decade (2% of the worldwide investments), West Africa benefitted from a mere $4,7 billion of them (Connecting the Dots).

Another challenge is represented by the energy price which, in the region, is deemed to be among the highest in the world (around $0.20/KWh, with peaks like Burkina Faso as high as $0.40/KWh , World Bank).

Such a situation is caused by infrastructural and technical differences among West African States (frequencies, voltages, incompatible grids components, etc.): an example is represented by inefficient domestic infrastructures and a struggle in synchronizing national networks into a regional grid, which heavily affects the development of a dynamic regional trade (just 8,5% of the energy produced In West Africa is traded cross-border every year, Connecting the Dots).

Hence, unlocking West Africa’s full potential and transforming it in an efficient energy hub will require targeted actions.

These include, in the first place, national and transnational interventions aiming at developing conducive regulatory frameworks: desirable policy measures should break down barriers hampering the deployment of foreign direct investments (FDIs), allowing the implementation of bankable Power Purchasing Agreements (PPAs), and ensuring the presence of effective de-risking instruments.

A greater regional integration is another enabling factor of West Africa’s just green energy development. Renewables are often location-specific and require regional coordination in order to see their potential maximised, while diminishing their costs and increasing access to electricity. Furthermore, in some West African countries, there is an abundance of unused generation capacity, which could be traded and utilised to balance out the generation deficits of other domestic markets.

Finally, it will be pivotal to invest in the technical capacity of the local human capital, across all the layers and segments of the value chain. West Africa only employs around 66.000 people, 0.55% of the worldwide renewable energy workforce (Connecting the Dots). Increasing this quota calls for knowledge-sharing platforms, as well as multi-level capacity building programmes.

With a greater regional integration, adequate financing and smart policy design, West Africa is well-positioned to become a proper regional renewable energy hub, with a tangible improvement of its economic development and, ultimately, in the quality of life of its inhabitants.

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Africa is a continent in continuous transformation, with a sustained economic and population growth, a fast-paced urbanization and a young generation of talents who is leading its business revolution. This transformation requires energy and will require it even more in the next decades.
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