Energy Access in Sub-Saharan Africa: Open Philanthropy Cause Exploration Prize Submission
Summary
As of 2019, there are 759 million people without access to electricity, 77% of whom live in sub-Saharan Africa. Sub-Saharan African economies consume only 6% as many fossil fuels as advanced economies. Building out cheap energy infrastructure confers benefits that improve the welfare of the worst-off at scale in ways that ‘randomista’ orgs like Give Directly, AMF, etc. cannot do, such as by improving energy-dependent sectors like health, agriculture, industry, sanitation, and access to clean water. Energy access in Africa is the killer app for sustainable economic development.
Despite this, China announced plans in 2021 to stop all overseas coal financing around the same time the EU announced plans to limit investments in fossil fuels and the U.S. guided the World Bank and other multilateral development banks to block overseas financing for all coal, oil, and most natural gas projects.
Balancing the short-term need for economic growth in Sub-Saharan Africa with the long-term need to mitigate carbon emissions is one of the trickiest balances to strike in international development. I argue that we can rectify this by working with African institutions and leaders at the local level, instead of treating Africa as a single, static data point.
Importance
African countries need immediate access to abundant, always available, and cost-effective power. There are some countries, like Ethiopia are endowed with vast hydroelectric and geothermal resources, while Nigeria will have no economically and technically feasible clean energy alternative to natural gas.
In African Arguments, Lily Ordano, director of Clean Air Task Force’s (CATF) Energy and Climate Innovation Program in Africa notes that “most of the climate and energy transition models that shape global dialogues treat Africa as a single, static data point, failing to capture the heterogeneity of the 54 independent countries’ diverse energy endowments and growth aspirations. Worse still, these influential analyses implicitly assume continued poverty and low consumption.”
She continues, “African countries need immediate access to abundant, always available, and cost-effective power… While Africa is a low emitter of greenhouse gases, the time is also ripe to build foundations for the development of zero-carbon power, readying the continent for wide adoption as these technologies become economically feasible. This can help African countries circumvent the lock-in effects associated with building more fossil-based energy infrastructure.”
Infrastructure policy expert Rick Geddes concurred with the statement that “the most important thing that might be done to rectify absolute poverty and maybe to mitigate relative poverty would be the provision of energy as cheaply as possible and the second most important would be the universal provision of efficient [energy] infrastructure.”
Tractability
It is difficult to estimate the impact of work in this area beforehand, although I think it’s plausible that well-targeted interventions (such as the ones I review below) could provide comparable or superior leverage to SCI, AMF, etc. This is because while distributed interventions can be incredibly effective at a small scale, I believe that building out high-quality infrastructure is imperative for long-term sustainable development.
Neglectedness
Only 14% of climate finance has gone to the least developed countries in sub-Saharan Africa, with the lion’s share going to industrialized, middle-income countries. There are still billions of dollars available, but much of the funding comes from paternalistic international organizations like the World Bank, etc. I would estimate that there is currently only a few hundred thousand to a few million dollars of funding for interventions that are working to catalyze effective engagement in climate action from African countries, which will ultimately rest on their ability to set their own agenda and act on solutions suited to their contexts.
Possible Interventions
Clean Air Task Force (Energy Access program)
Clean Air Task Force does incredibly high-leverage work in this area. They partner with African institutions of higher learning, research organizations, and the private sector to establish technology innovation hubs in West and East Africa to facilitate the development and commercialization of zero-carbon technologies in Africa, work with utilities in sub-Saharan Africa to adopt innovative strategies for improving utility performance and financial health, integrating regional power grids, and boosting consumption from commercial and industrial consumers to reduce the per-unit cost of power, and partner with African institutions to build knowledge and advocate for inclusive energy access and decarbonization agenda that is tailored to Africa’s development needs and responsive to global climate goals.
Clean Air Task Force has had a phenomenal record with climate interventions thus far, although their energy access program has not yet been rated for cost-effectiveness. CATF takes a delightfully nuanced approach, understanding the imperative for rapid development with long-term climate goals, and only acts in the capacity of assisting high-quality African institutions to chart their own course.
Advanced Nuclear
The most recent report from the IPCC states that “Nuclear energy… could make an increasing contribution to carbon-free electricity and heat in the future.… A robust mix of energy sources (fossil, renewable and nuclear), combined with improved end-use efficiency will almost certainly be required to meet the growing demand for energy services, particularly in many developing countries.”
Unfortunately, the interim between the time it takes to identify a site, obtain a site permit, purchase or lease the land, obtain a construction permit, obtain financing and insurance for construction, install transmission, negotiate a power purchase agreement obtain permits, build the plant, connect it to transmission, and obtain a final operating license is prohibitively long to be seriously considered as a universal energy source in the near future.
Enter Small Modular Reactors (SMRs). SMRs are built on an assembly line and can be transported anywhere in the world, and they produce 50-100 megawatts of electricity, enough to power 25-100,000 homes. Small Modular Reactors (SMRs) have a projected construction time of 3-5 years—roughly comparable to utility-scale renewable projects. And because these reactors can be built off-site—as opposed to tropical pressurized water reactors, which must be built on-site—once construction is completed they can provide electricity almost instantly.
The major challenge to democratizing access to nuclear energy globally is that you need immense technical expertise—site planners, nuclear engineers, physicists, power plant operators, distributors, dispatchers, and more—to construct and operate a nuclear power plant. SMRs are far more hands-off. They can run for 30 years without refueling, as opposed to just 18 months for traditional reactors. They are also fabricated in factories and can be easily transported, which means that if these resources aren’t available in the regions where SMRs are, they can be installed on-site. This is far more workable for developing economies.
A traditional nuclear reactor requires 2.6 square kilometers of land. By contrast, SMRs require only 0.3 square kilometers of land to operate and are housed underground. It is possible to construct a reactor with a single module or use units in combination for greater power output. Additional modular units can be added and brought online incrementally for greater power output. This means that SMRs can be adapted to communities’ individual energy needs and require reduced upfront capital investment, yet another advantage for developing countries.
SMRs can also provide round-the-clock electricity at only $67/MWh, about half the price of traditional nuclear reactors.
A grant to an organization to work with African leaders to deploy SMRs at scale could be an effective use of OpenPhil funds, although I am highly uncertain of this.
Questions to Explore
Could continued material growth amount to an “anthropogenic insult to ecosystems” (as economic analyst Vaclav Smil has suggested) whereby the strain on the biosphere is not worth the attendant benefits of economic growth from the aforementioned interventions?
Could rapid economic growth exacerbate the risk or severity of a Great Power War, as countries in Africa quickly grow their militaries?
Could there be a risk of nuclear proliferation from Small Modular Reactors?
Could energy access be a high-leverage tool to prevent pandemics as well, because of improved sanitation and health systems?
Although we should beware of suspicious and surprising convergence.
When you say “working with African leaders”, I worry that in many countries that means “paying bribes which prop up dictatorships and fund war.” How can we measure the extent to which money sent to NGOs in sub Saharan Africa is redirected toward harmful causes via taxes, bribes, or corruption ?
In context, this is:
This suggests either the opposite of, irrelevance to, or support by analogy of your concern. It is various African institutions and local leaders who would be making sure that the balance between increased energy output and worsening environment is stricken. The design where decisionmaking would be much more aggregated could, possibly, lead to a suboptimal decisionmaking, because authorities could be less in touch with the local nature so disproportionatelly prioritizing energy cost reduction/distribution (although, this illustrative example may show a bias in this reasoning).
The reasoning that local institutions and leaders (e. g. community elders, land owners) can make more pro-environmental (which can be interpreted as less biased or ’corrupt) decisions than national or regional governance representatives (who could be lobbied by profit-seeking industries) can seem intuitive. However, it may not be as clear. Some community elders may have little concern for the environment (e. g. many extremely poor persons gain income by charcoal making, which is polluting and unsustainable) and some land owners may be happy to destroy their crops and host a coal mine investment—or sell the land). On the contrary, governments may be aware of a variety of investment options, from mining to juice making and, if given the option, may go for portfolio diversification that also reduces their proneness to war (so, renewable resources, comparative advantage specialization and trading, or energy supply agreements).
To answer your question, the rate of unagreed-upon use of funds by NGOs (as well as other entities, including governments) can be estimated by an external observer of the total value provided by the programs, considering local knowledge of market prices. It can range, from negative percentages (employees sacrifice income compared to the profit sector, negotiate below-market bargains with local providers on the basis of social/environmental benefit) to 99.5% misappropriated (anecdotal stories of multi-million projects in a developing context outside of sub-Saharan Africa).
However, you have to consider that sometimes external funders would not have agreed to a more effective use of funds (e. g. if COVID funding is used to treat or prevent a neglected tropical disease), that workers are underpaid (so, even with a ‘premium’ can still receive less than they should), or that the locals’ preference must be taken into consideration (to build local trust or that otherwise locals would be at the threat of expressing their preferences to safeguard an institutional development considerate of people’s preferences) even if it is not the most cost-effective to do (e. g. a neighbor that needs some funding for a hospital travel for which a few vitamin doses need to be sold informally). So, ‘corruption’ may not necessarily be bad in terms of impact or improving institutions.
Energy access in Africa may seem like a factor which would improve many development indicators, and benefit health and wellbeing outcomes as well. However, the opposite may be the case (for example, the decrease of Gross National Happiness in Bhutan after the TV ban lift (Happiness: Lessons From a New Science. Chapter 6)). So, any electricity access should go in conjunction with the existence of material that increases individuals’ (different humans’ and non-human animals’) happiness (and motivates sustainable practices to safeguard the future) and the competitiveness (much greater locals’ preference) for this material compared to other one (e. g. violent or sexist/racist/body-shaming/uncooperative or unenjoyable relationships displaying movies or ads) or the locals’ ability to ignore the latter. This can partially answer your first question.
Economic development should 1) reduce the risk of great power war if normative development accompanies it, 2) have positive (but lesser) effects if no unexpected normative development occurs and, 3) have moderately to extensively negative effects if economic growth highlights negative human characteristics.
For example, 1) if countries that are getting richer internalize the gains from specialization, trade, and efficient institutions while observing health and wellbeing metrics, they can make better decisions about the use of potentially destructive technologies that are becoming increasingly more affordable. 2) governments can become more interested in presenting as people in movies (focusing on wealth exhibit, body image, …) and less interested in some traditional status symbols (e. g. which can be sexist, negatively biased toward poor people, or neglecting animal welfare) while keeping others (e. g. care for family and community), which shifts norms toward more consideration and less violence or coercion overall. 3) An instance in which large negative effects can occur is governments realizing that they can threaten, coerce, or attack their adversaries to achieve their objectives, including gaining economic benefits which they would spend on aspects associated with economic growth (wealth exhibit) as well as some local status symbols (meat eating).
It can be so that local engineers do not acquire sufficient knowledge to develop nuclear weapons from learning a small aspect specific to the operations of a reactor. However, even this situation (belief that they can develop the knowledge) could motivate governments to further research nuclear power, including for defense or military purposes.
Sanitation may be constrained by non-electrical infrastructure (e. g. latrines, (barrel) handwashing stations, soap, …) and education (importance of using the infrastructure). Even a flush toilet, quite high-end in many places, does not require electricity. In healthcare, there can also be more affordable programs available (e. g. paying clinic travel stipends to the most needy or in the greatest risk (e. g. risky delivery), mobile clinics/traveling doctors to remote communities for regular checks, community-based assessment of acute malnutrition cases in food-insecure communities and small amounts of local food available to the identified children, etc. Agriculture (stated above) may also benefit from non-electric improvements first. For example, planting seeds 75 cm apart rather than scattering them and weeding regularly can increase yields 2x or more (The Last Hunger Season).
So, finding what electricity could add for the greatest impact (assume a heavy-tailed distribution and find the best cases) and then sharing it at the lowest cost may be the best option. You may end up with figuring out that SAT textbooks for local schools and making sure students go over them may be the most cost-effective.
Then, other investors, such as the Asian Infrastructure Investment Bank or the New Development Bank may be interested in funding electricity in sub-Saharan Africa.
Random ideas include placing solar panels in the Sahara Desert and establishing export processing zones with education and savings opportunities for migrants seeking employment (energy transport losses can be high and infrastructure subject to disputes so production should happen at the place of the electricity production).
One consideration not mentioned here is the impact on animal consumption with access to more power. Do you (or anyone else) have a sense of what that could be?
(Edit: I am talking about the poorly-named “Poor Meat Eater Problem”, which is a consideration that applies to basically all poverty interventions.)