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NEWS

African utilities wary of threat from renewables

CategoryStories
TagsElectricity utilities, Energy Access, Regulatory and Governance

The rise of clean energy and prosumers, net metering and greenhouse gas regulation all figure among the bogeymen as far as national electric companies are concerned.

A significant proportion of the 36 national electric utilities surveyed for the African Development Bank‘s latest Electricity Regulatory Index report cited the threat posed to their profitability by a rising penetration of renewable energy systems.

The latest edition of the flagship report – which placed Uganda at the head of its ranking for energy regulator performance, and Chad‘s one-year-old regulator at the bottom – asked electricity distribution companies in 36 sub-Saharan African nations what threats they perceived to their viability.

Some 43% of the respondents mentioned the rise of renewables and, in particular, the need to accommodate ‘prosumers' which both generate and consume electricity, and which expect to be recompensed for excess power fed back into the grid.

Half the utilities questioned highlighted demand-side energy management and energy efficient appliances as a threat to their business case and the same number were wary of environmental and greenhouse gas regulations limiting their emissions.

Some 42% of the electric companies surveyed said net-metering and “other disruptive technologies” posed a threat to their viability.

The index, which assesses the political and financial independence of African national energy regulators, among other aspects of their operation, includes a separate ranking devoted to assessing how the operations of such authorities affect electric utilities. In that list, no regulator attained the best, green ranking. Authorities in Namibia, Uganda and Zambia attained the second best, yellow ranking, those of NigerTanzaniaZimbabweEthiopia and Cameroon were rated orange and the remaining 28 were red.

In a list of short-term recommendations made by the authors of the report, to be applied within two years, the energy regulators of Burundi, the Central African Republic, Chad, the Democratic Republic of CongoGuineaLesothoLiberia and Malawi were advised to devise legal and policy frameworks for renewable energy adoption.

Sixteen national regulators were urged to draw up technical standards for clean energy mini grids and 17 – with much overlap – to apply similar rules for the installation and operation of standalone renewables equipment such as solar home systems.