Energy experts during a PowerGen Africa-hosted webinar on May 12 agreed that Covid-19 presents an opportunity for policy renewal and structural reforms in the energy sector.
The webinar forms part of a virtual webinar series leading up to the African Utility Week event, which will be hosted later in the year once Covid-19 restrictions are eased.
A panel of speakers discussed the importance of including energy in Covid-19 recovery plans and said governments had an opportunity to make a step-change towards a clean energy transition.
Solar energy company Sun Exchange CEO and founder Abe Cambridge said he was imagining a post-Covid-19 world where economies were based on clean energy.
“Covid-19 has highlighted weaknesses in the systems we have been relying on, including legacy energy systems. We do not yet know what the future holds, but we can start to re-image our economic systems,” he added.
He believes that, with Africa being rich in solar energy and this being the most cost-effective source of energy on the continent, it is the ideal resource to propel economies to recovery post-Covid-19.
Enel power generation division’s head of regulatory affairs for Africa Silvia Piana pointed out that the pandemic had not affected population growth, urbanisation, electricity demand growth or the abundance of renewable resources. It was, therefore, necessary to use energy as strategic infrastructure during a global crisis, as well as to stimulate economic recovery afterwards.
However, she said the continent only had 2% of the world’s renewable energy capacity as it was a “hard” environment to invest in.
She highlighted that the continent had many geopolitical and financial risks, coupled with insufficient support to investors throughout the project cycle.
Piana noted, however, that unlocking renewable energy investments at scale was a unique opportunity for Africa to leapfrog in its clean energy transition and Covid-19 recovery.
“Policy support is one of the key enabling factors for an energy transition, it is what stimulates the appetite of private investors. Once there is openness, investors next consider how the framework is designed to support their investment.
“The openness of a country to private investment is usually evident in Master Plans and renewable energy targets. The attractiveness of frameworks if reflected by cost-effective prices that can be achieved and other forms of support for investment,” she explained.
Piana added that the third aspect power generation investors had to consider was the readiness of a country in terms of routes to market – for generators to reach markets – including grid developments over the short and long term.
Meanwhile, solutions developer ED Platform strategy and growth head Maloba Tshehla stated that economies were underwritten by people and their contributions. Therefore, it was important for the post-Covid-19 future to become people-centred.
“Many governments and companies’ efforts have been around how do we lend a helping hand. If we take it to an economic discussion, how do we built the economy to empower everyone, so that such help is not necessary again?”
He added that, through the ages, infrastructure had driven human development and improvement of quality of life, with energy as the driver for economic activity.
“In Africa and South Africa, we have the opportunity to combine the need for infrastructure investment and the opportunity to provide energy towards economic growth, and in a way that gives us this people-centred future,” Tshehla said.
He added that the discussion around policy, government and the economy, in relation to Africa’s development as a region, had been a debate between the interference of State and allowing the markets to go about their business.
“Government should be there to set the rules of play. Government should incentivise capital to move in a way that develops the economy.
“In South Africa, we have seen where policy has been used to direct capital flow to meet developmental needs. There does not have to be a disconnect between policy and developmental objectives and capital returns that investments are about.”
Tshehla further said that Africa as a continent had the opportunity to meet developmental needs, by government creating the enabling framework, people being allowed to participate in the development and where investors can make good returns.
“Policy can direct capital. We can help outside parties to understand this policy framework and, in turn, help local stakeholders to understand the conversation at the investment table, which will ultimately see both local ownership in projects and projects realising,” he concluded.