Africa’s Electricity Shortage

 The Wall Street Journal features Africa's electricity shortfalls on its front page today. In addition to the problems of low investment and disruption due to conflict, the continent's power grids face pressures from two directions.

Lusaka, Zambia. Flicker photo by kamaski under a Creative Commons license.

First, the rising costs of oil and coal are creating upward pricing pressure:

Some countries like Ghana and Senegal depend on imported oil and natural gas to fuel their power plants and are now struggling to pay mounting bills. In Senegal, the government relies on imported oil to fuel all but 66 megawatts of its 623-megawatt-capacity grid. When oil prices soared past $100 a barrel, the government, which subsidizes electricity prices, was hit hard. The government has spent more than $300 million in unplanned subsidies since 2004 to ease its citizens' rising electricity costs and is anticipating another difficult year, as the prices climb month-to-month. The spending has sucked the government dry at a time when it needs cash to upgrade its beleaguered power grid. "The government doesn't have a penny to invest in the energy sector," says Mohamadou Diop, an independent energy consultant in Dakar. The government can't match the price rises with new subsidies and is being forced to pass on some of the higher costs to consumers. Prices have risen 15% in just the past few months, leaving much of the power-addicted middle class struggling.

Second, higher prices for commodities such as gold, diamonds, platinum, and other metals has led to an expansion of energy-intensive mining operations in many countries, increasing electricity demand. In South Africa, mining operations use 17% of the country's total electrical output, and in Botswana, "[d]iamond mines suck up roughly half of the country's overall consumption." Complicating the situation, shortages can spillover from one country to another:

South Africa's cuts are roiling neighbors. That's because Eskom exports power to much of the region. In copper-rich Zambia, South Africa's outages forced the country's largest mining company to suspend operations altogether in January. Electricity demand in Botswana, a big diamond producer in southern Africa, is growing at 8% a year...South Africa is now cutting back on the electricity it's willing to sell to the country.

These shortages are stifling African economies and delaying efforts to expand electricity access - a major issue since only 25% of sub-Saharan Africans currently have it. Of course, this comes at a bad time when the continent is suffering especially hard from the ongoing food crisis.