1.🚁 Heli view: Why green energy lacks the necessary plumbing

The continent has doubled its installed electricity capacity to 245 Gigawatt over the past seven years, mostly from renewable sources. Hurrah!

Yet a big blocker remains: Reliable transmission and distribution lines to get the power to homes and businesses are sorely missing.

The context: Many renewables projects are located in remote areas, far from consumers. 

• Transmission lines can carry high-voltage power over long distances, but they’re costly.

• Since 2014, they’ve only received 0.5% of the $41 billion invested in the continent’s energy sector. 

• Africa has 247 km of transmission lines per million people, compared to 610 km in Brazil and 807 km in America.

Why it matters: Grid poverty results in a lack of access and magnifies efficiency losses.

• Some 17% of electricity (or double the global average) is currently lost en route.

• In 2022, that totalled 152.5 TWh, enough to power 244 million people, or more than 40% of Africa's unelectrified population of 600 million.

The challenge: Infrastructure development in Africa is usually government-led. Plus, power grids take much longer to build than power plants.

• New grids often require up to 15 years of planning, permitting and construction, compared to 1 to 5 years for renewables projects. 

• When plants are completed before grids are ready, utilities have to pay for unconsumed power.

• The one-year delay in connecting Kenya’s Lake Turkana wind project cost taxpayers $134 million.

Investment needed: The majority of African utilities already struggle financially. 

• They are unlikely to spend the extra $18.5 billion annually required for adequate transmission & distribution. 

• Even though it could reduce electricity losses by 30%.

The crux: Private sector participation can play a critical role in bridging the financing gap.

• But private investment in African grids is critically low. 

• Few countries have policies to enable such participation.

• Often long-standing vested elite interests stand in the way.

A few notable exceptions: Morocco, Ghana, Zambia and Uganda have allowed private sector investment in their distribution networks. 

• Operators post impressive results, outperforming public utilities financially, commercially and technically, halving the efficiency losses of state-owned utilities.

New approaches: The transmission sector is starting to build on the success of independent power producers in the generation sector. 

• New models focus on long-term “Transmission Service Agreements”, similar to Power Purchase Agreements on the generation side. 

African pioneers: Kenya created an early public-private partnership involving KETRACO, Africa50 and POWERGRID. 

• In Uganda, the government went into partnership with Gridworks.

Alternative solution: Extending national grids to distant rural areas is costly. Mini-grids (often fed by solar farms) are more affordable. 

• But most mini-grids only provide basic electricity to homes and small businesses.

• Their limited capacity cannot meet the energy-intensive demands of industry.

Future trends: Transmission technology is evolving with innovation – as well as being challenged by it. 

• South Africa has adopted “smart grid” tech that creates a more efficient and reliable power supply.

• Yet rapid urbanisation and the shift to electric vehicles will also put added pressure on grids and necessitate upgrades to handle increased loads.

2. Cheat sheet: Three cases of new grid investments plus job creation

(i) Kenya: $6.1 billion investment in grid infrastructure and distribution by 2035, with an additional $60 billion needed between 2035 and 2050.  This has the potential to create 364,000 direct and indirect jobs in the power sector.