Feed-in tariffs proposed for Africa
A new study released this month finds that a number of African countries would greatly benefit from the implementation of feed-in tariffs to promote the growth of renewables – largely because the policy leads to more distributed generation and greater energy democracy.
It has long been held that feed-in tariffs are a policy to get renewables started before they are competitive without subsidies, and critics of feed-in tariffs have charged that they actually lead to the installation of relatively expensive sources of electricity, thereby raising the price of electricity for consumers. So why would anyone propose feed-in tariffs for Africa?
First, because both of those ideas above are wrong. Onshore wind power is already largely competitive today, and the price of photovoltaics continues to plummet, so the cost impact of feed-in tariffs going forward will not be that great. On the contrary, there is every reason to believe that feed-in tariffs provide renewable power at lower cost than the kind of bidding systems often proposed as a better alternative.
The very idea of cost-based compensation for renewables comes from the conventional energy sector, where government-regulated monopolies were guaranteed a profit in return for a promise not to gouge customers. Competition between power firms is a relatively new idea, and – like other privatization efforts of the 1990s – may turn out to be a passing fad. For instance, nuclear power – hardly a fledgling technology – now apparently wants back into governmental protection in the form of feed-in tariffs in the UK. And in Germany, a growing number of politicians are calling for the German grid, currently held by four investor-owned utilities, to be nationalized.
Indeed, citizens around Germany are working to buy back their grid and get the right to invest in grid upgrades, which brings us to the second reason why feed-in tariffs would be good for Africa: local ownership and energy democracy, as opposed to a corporatist focus on large-scale power supply. The new study published by the World Future Council (PDF) finds that, "As of 2012, 65 countries have implemented some form of a REFiT (renewable energy feed-in tariff), driving 64 percent of global wind installations and 87 percent of global photovoltaic installed capacity." Not only has the policy led to widespread clean energy, but "the decentralized approach… allows for alternative ownership and governance models and provides the opportunity to empower communities as well as refreshing local democracy and self governance."
While the cost impact on the poor is especially important for poor countries, the study finds that the obstacle is not insurmountable. Rather, it is something properly in the domain of social policy, not energy policy. For instance, a minimum level of power supply could be provided at an affordable cost, with greater per capita consumption increasing the price of a unit of energy – an approach already used around the world, from California to Cuba.
Each country will, however, have to come up with its own design, and the study is quick to point out that policies successful in one area will not necessarily be transferable to another. Fortunately, the study is based on a wide range of cases around the world, including people very familiar with Africa (such as consultants from Kenya's Renewable Energy Ventures). One of the authors is FIT expert Wilson Rickerson, and the study is partly based on "Powering the green economy: the feed-in tariff handbook" of 2009. (Craig Morris)
