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Understanding Energy Storage

One of the US Department of Commerce’s (Commerce) signature contributions to Power Africa has been the Understanding handbook series developed by its Office of the General Counsel’s Commercial Law Development Program (CLDP). This open-source and plain-language knowledge library now includes six handbooks explaining a range of essential topics in power project contracts, financing and procurement. In recent years, the Understanding series has expanded to focus on unique challenges in Africa’s energy market, such as the complex nature of private participation in transmission projects. With 65,000 copies in print and tens of thousands more copies downloaded online, the Understanding series has become a trusted resource in Africa’s power project community.

The most recent addition to the Understanding series, Understanding Energy Storage, comes at a critical time in both the development of the continent and the effort to combat climate change globally. The hope is that this handbook will contribute to Power Africa’s efforts to catalyze new energy storage investment as a core component of overall market development. This handbook supports the Commerce’s Renewable Energy and Energy Efficiency Advisory Committee’s recommendations on (1) Clean Tech Export Competitiveness Strategy, (2) Energy Equity and (3) Technology Risk Mitigation and Financing; and advances the US International Climate Finance Strategy.

This handbook is from Commerce’s Commercial Law Development Program and is co-authored by McDermott Associate Seth Doughty.

Access the eBook.




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U.S. Pledges Support for Investments in Sub-Saharan African Power Projects

by Ari Peskoe

Last week President Obama announced a package of programs that aim to increase electricity generation and transmission in Ghana, Kenya, Liberia, Nigeria and Tanzania.  Headlined by $7 billion in U.S. government support and $9 billion in commitments from the private sector to invest in new generation projects, Obama’s initiative aims to “double access to power in Sub-Saharan Africa.” Although details are still forthcoming, the initiative is evidence of the enormous demand in Sub-Saharan Africa for new generation.  New supply supported by the President’s initiative is likely to primarily be large-scale natural gas-fired and hydro generation, and it is not clear how such projects will “double access.”    

Less than a third of people living in Sub-Saharan Africa have access to electricity.  Excluding South Africa, Sub-Saharan Africa has only 28 gigawatts (GW) of generation capacity for a population of approximately 850 million people.  (For context, the Netherlands has 26 GW of capacity for a population of less than 17 million).  With the exception of Nigeria, the five target countries have very low population densities and lower than average urban populations as a percent of the total population.  In other words, dispersed populations either have no electric grid at all or have access to a grid with only meager capacity.

New large-scale generation located near urban centers and industrial zones can be helpful in supplying stressed grids, and such projects are also likely to be the most feasible.  The more daunting task, however, is to provide electricity to dispersed rural populations, 85 percent of whom in Sub-Saharan Africa have no access to electricity.  Obama’s initiative includes $2 million in grants to African-owned and operated enterprises “to develop or expand the use of proven technologies for off-grid electricity benefitting rural and marginal populations.”  The initiative’s private sector commitments also include “installation of 200 decentralized biomass-based mini power plants in Tanzania.”  Such small-scale projects demonstrate that sub-Saharan Africa presents a range of opportunities, but that Obama’s initiative is focused on large-scale projects rather than reaching rural populations with decentralized alternatives.

Of the $9 billion in private sector commitments, just over $1 billion is for wind generation; fuel source for the balance has yet to be specified.  Natural gas and hydro projects, however, are well-positioned to receive the bulk of the support.   According to the most recent statistics (which are a bit out of date and incomplete), the five target countries currently get the majority of their power from natural gas and hydro, and oil is the third most common fuel, providing almost twenty percent of the countries’ electricity.  New investments may include some oil-fired generation, but that fuel is generally more valuable for transportation than power generation.

Coal-fired generation is also unlikely to see major support from Obama’s initiative.  Coal is used for electricity generation only in Tanzania, which is otherwise dominated by hydro and natural gas generation.  Furthermore, in his recent Climate Action Plan, Obama committed to “end to U.S. government support for public financing of new [...]

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