Will solar deliver electricity “quickly, quickly?”

THE STATEMENT: “…I want electricity quickly, quickly,” by President Paul Kagame was probably the most loaded words, with a sense of urgency, to be made by the head of state during the year just ended. Made during the 2013 State of the Nation address, the statement underscores the pivotal role enough energy will play in Rwanda’s short and long term growth. Experts say Rwanda needs to double electricity generation to sustain the current economic growth rate that has averaged 8 per cent over the past years. Therefore, the real challenge for policymakers is to carry out a careful diagnosis of the current energy situation by looking at ongoing projects and come up possible short cuts to deliver electricity “quickly.” Growing demand A recent Rwanda energy sector review by the African Development Bank and the government to inform the second Economic Development and Poverty Reduction Strategy (EDPRS2) provides important facts. Only 16 per cent of households (350,000 customers) are connected to the national electricity grid. In other words, electricity accounts for only 4 per cent of energy consumed in the country, with 85 per cent being biomass-related, including wood. Despite the small number of consumers, the current electricity generation capacity can’t satisfy demand during peak hours. Rwanda’s 7.4 per cent projected growth rate in 2014 will be higher than sub-Saharan Africa’s average of 6 per cent, yet the country has a low per capita electricity consumption of 42 kWh. Sub-Saharan average is 478 kWh. It’s these statistics that explain the sense of urgency in the president’s statement. If Rwanda’s economy is to grow that fast, then it needs to solve its electricity needs and quickly. According to EWSA, current installed power production capacity is 68.4MW, but available capacity is 57.2MW. This is from four hydro-power plants, four thermal plants and one solar source. Supply is boosted by 14.5MW from imported sources giving EWSA a possible 84.4MW, although the utility agency says that available capacity from both domestic and imported sources is 77.1MW. Under EDPRS and Vision 2020 projections, electricity peak demand is expected to grow from 51 MW in 2008 to 204 MW in 2015 and 328 MW in 2020. Both ADB and the government agree that such a trend would see demand peak at 500 MW by 2025. While access is still low, it shouldn’t blanket the fact that it has grown by 160 per cent between 2008 and 2011. When the current cabinet was ushered in, October 2010, it pledged to accelerate access to 50 per cent by 2017. This ambitious extension would imply that electricity access would reach 94 per cent by 2025. Some critics have called these targets unrealistic. With plenty of ambitions but short of solutions to achieve them, it’s easy to see why the president is getting impatient for results. The 2010 move by cabinet to double access targets to 50 per cent by 2017 can be praised as brave but a lot needs to be done in 2014 for it to be achieved. “Energy is a long term investment and capital intensive. The good thing is that there seems to be some exciting projects in the pipeline,” said one observer. Pipeline projects In order to support Rwanda’s long-term economic development agenda, an energy sector policy and strategy was prepared in 2009 with the main objective being to ensure availability of reliable and affordable energy supply. According to ADB, Rwanda requires $4.2billion to fund its accelerated electricity plan between 2013 and 2017, an annual investment of $845 million. But ADB also notes that this annual investment would drop to $345 million between 2018 and 2025. In the 2013/2014, national budget, electricity generation is listed under economic transformation as one of key thematic areas and was allocated Rwf459 billion or 28 per cent of the total budget. Between July 2013 and June 2014, the government allocated funds to work on six power projects with an aim of boosting electricity generation. These include the construction of a 27MW Nyabarongo hydro power station (Rwf26.7billion), the 145MW Rusizi III hydropower plant (Rwf18.4billion), development of a peat-to-power plant (Rwf 6.1billion) and a geothermal resource development (Rwf 8.1billion). Also to be done by July 2014 is the electrification of six districts in Eastern Province an exercise that will cost Rwf 9.8billion and an electricity roll out programme at the cost of Rwf 30.9billion. Completion of one or two of these projects will reduce the current deficit. A case for solar Precisely, the government wants to achieve two goals; increase power generation capacity and get more people to access electricity in the shortest period possible. For such a remarkable problem, an extra-ordinary approach is required to get quick results. There are two main uses for electricity in Rwanda; industrial/commercial and domestic. While both are important, the former is more critical as it has direct implications on productivity and economic growth. With electricity available, factories will run smoothly and keep up production, create more jobs and increase people’s incomes. Domestic users need electricity for lighting and running domestic electronic appliances. According to the Private sector Federation, electricity shortage is the leading cause of operational losses to enterprises when factories shut down or run expensive diesel generators during outages. To avoid escalation of this shortage, the government wants to boost generation capacity to reach 563 MW by 2017 [revised downwards from 1160 MW] and at the same time expand access to 70 per cent. All public institutions will have 100 per cent access by 2017. As a realistic shortcut to attaining these ambitious goals, a case could be made for solar to be promoted as an alternative for domestic users and reserve hydro-energy for commercial production. This approach would help focus efforts to specific areas. For instance, by allocating 80 per cent of the country’s hydro-electricity resource to Kigali, where most commercial enterprises are based, there would be enough power for factories to run uninterrupted. As for other districts outside Kigali, the government would design a deliberate approach to roll out off-grid solar panels through a partnership with a developer to enable locals obtain devises at subsidised prices. The result would see power outages in Kigali reduce and production losses going down. Working with a development partner, the government would mobilise lower local governments to help locals acquire affordable solar panels with capacity to light and operate basic domestic appliances such as flat irons, hot plates and TV-sets. After all, experts estimate that 80 per cent of the electricity is consumed in the capital where only 5 per cent of the population lives. By embracing solar as a national source for domestic use and hydro-power for commercial purposes, Rwanda would save a lot of money currently spent on oil to run the thermal plants. For instance, the cost of importing fuel at one point represented 40 per cent of the country’s import bill when a barrel of oil was at $30. But how viable is solar? Current satellite data shows that the territory of Rwanda is in the global zone where the daily radiation is between 5 and 6 kWh/m²/ This means, Rwanda’s average solar radiation per day is about 4.5 kWh / m² for most of the country but there’s potential to reach 6 kWh / m² / day in the central, southern and south-eastern regions. “The average sunshine time per day is 8 hours, which makes solar energy in Rwanda economically viable,” says EWSA. Therefore, with a deliberate plan to develop and roll out solar for domestic electricity purposes, all the government would need is to find a willing donor or development partner to work with village cells to help citizens acquire low cost panels. The government would also need to train hundreds of solar technicians to help in installation and repair of solar devices, a move that would provide more jobs. Already, the government seems to be moving in that direction after it obtained a grant from the Global Environmental Facility Trust Fund (World Bank/GEF) of $4.5 million for the Rwanda Sustainable Energy Development Project and another grant from the Nordic Development Fund of 4 million Euros for the development of solar heaters market. Under the SolaRwanda program, government wants to install at least 12,000 water solar heaters by the end of 2015 and save about 23,328 MW. The government has also chosen to use solar to achieve 100 per cent electrification of clinics, schools and administrative offices in remote areas. However, ADB notes in its electricity sector review report that, the support from various donors to implement these projects has not been well coordinated. The ADB also notes that there has not been a notable effort to develop local capacity for maintenance and that lack of skills for proper maintenance have led to a series of technical problems including malfunctioning batteries, faulty wiring, broken DC-appliances. Yet in solar seems to be the hidden short cut to reducing the strain on national grid while increasing access for domestic purposes as EWSA notes.