Full steam ahead? Geothermal energy can be Africa’s game-changer

THE Africa of today is exponentially more vital than 20th-century Africa. In Sub-Saharan Africa‚ countries are experiencing a "new dynamism”‚ with two-thirds of them expected to grow at 6.2% this year.

In the face of this trend‚ energy has become a front-burner problem. An astonishing 70% of Sub-Saharan Africans still lack access to basic energy services‚ undermining their health‚ limiting opportunities for education and development‚ and reducing countries’ potential to rise up out of poverty.

Broad-based access to energy is fundamental to economic growth‚ and the African Development Bank (AfDB) has made increased energy access a central pillar of its vision for Africa.

Given abundant renewable energy resources and the climate change-related financing instruments available‚ fossil fuel-dependent African countries have the opportunity to grow on a clean energy path that not only bridges the energy gap but also attracts significant private investment in the energy sector in support of strong growth‚ job creation and poverty reduction on the continent. Promoting a higher diversification of energy mixes will benefit countries that depend too heavily on increasingly costly oil and countries that have power-generating systems highly exposed to climate‚ like drought-sensitive hydro-based systems.

One renewable technology now taking centre stage is geothermal power‚ energy extracted from steam buried deep below the earth’s surface. Geothermal energy‚ once fully tapped‚ is sustainable‚ affordable and not dependent on weather conditions. Parts of Africa‚ particularly East Africa and the Rift Valley‚ are teeming with potential geothermal hotspots ripe for tapping.

But there are up-front risks to geothermal development that come with a large price tag and keep investors away‚ particularly risks associated with initial exploratory drilling‚ which can cost up to 25% of total project costs and nevertheless can come up empty.

AfDB is helping create new project models to reduce these risks with concessional finance and make geothermal attractive to early investors‚ and to offer support for the institutional and regulatory frameworks countries need to make such investments sustainable in the long run.

The bank has begun co-ordinating ambitious geothermal schemes with Kenya‚ Ethiopia and Tanzania‚ joining with concessional finance instruments like the Climate Investment Funds (CIF) and other key partners.

In Kenya‚ a country with a massive 10‚000MW potential geothermal capacity‚ the region’s first large-scale geothermal plant is under construction at Menengai in the eastern Rift Valley‚ with support from the AfDB and CIF. The steam field is expected to produce 400MW of power‚ ramp up electricity access and avoid nearly 2-million tons of carbon dioxide each year‚ and test a model that can be replicated for other fields. The project is expected to transform the country’s base of electricity from drought-sensitive hydropower to geothermal.

In Tanzania‚ geothermal potential is high. Little of the 650MW capacity has been harnessed but the government believes it has the potential to be the country’s cheapest form of grid-connected renewable energy. AfDB is working closely with the Tanzanian government to lead the development of a geothermal project and explore ways to reduce risk to investors. Concessional finance and risk-sharing instruments are expected to play a key role.

In Ethiopia‚ 80% of Ethiopians live in poor‚ highly dispersed rural areas‚ and mostly get their energy from traditional biomass. AfDB is helping the country define a transformational geothermal roadmap to support their aim to increase geothermal generation to 1‚000MW by 2030‚ both for domestic demand and exports.

AfDB is also supporting smaller-scale schemes‚ working with Djibouti to develop a 50MW plant and with the Comoros to identify potential for a 20MW plant.

AfDB believes geothermal energy can be a triple win for Africa: it can provide a sustainable source of affordable energy for many African households and businesses; build economic opportunities for countries at the broader scale; and place Africa at the front lines of the global shift to renewable energy sources to reshape the continent’s global future.

 Mafalda Duarte is Chief Climate Change Specialist and Climate Investment Funds Co-ordinator at the African Development Bank. © BDlive 2013