Sunday, December 2, 2012

Hydropower is the best renewable energy option for Africa and Chinese are capitalizing on it

Africa has excellent hydropower potential, in fact, according to a recent UN report hydropower could satisfy entire Africa's power demand. Just two fifths of total African population has access to regular power supply so going for more hydropower certainly seems like one of the best energy options for black continent, especially since Africa is currently using only 5% of continent's total hydropower potential.

In the last few years the investments into African hydropower sector have been primarily coming from China. China has managed to become Africa's biggest trading partner, accounting for close to 15% of Africa's total trade. Renewable energy companies from other countries are finding it almost impossible to compete with Chinese renewable energy companies because they are being financed by Chinese banks with the heavy support from the central government in Beijing and therefore have a significant edge in costs over their foreign competitors.

Chinese are currently financing $9.3 billion worth hydropower projects. The large hydropower projects include a $2.2 billion Gibe III dam on Ethiopia’s Omo River, $705 million Kajbar dam on the Nile, Sudan and $729 million Bui project on the Black Volta River, Ghana. Gibe III dam, once completed, will become the largest hydroelectric plant in Africa with a power output of about 1870 Megawatt.

Of course, with Chinese money also comes the Chinese know-how, and despite somewhat improving its environmental track record in the last few years, China’s hydropower projects still remain a „big if“ in terms of environmental protection. The conservationists already fear that these new projects could destroy habitats of many bird species and hippos. It is also very likely that thousands of people will have to be displaced because of these new hydropower projects.

The reason behind China's massive investment in Africa is not connected with altruism and social awareness- it is pure business and nothing else because China needs new renewable energy markets in order to keep expanding and maintain its position of global clean energy leader.

Africa more than willingly accepts Chinese funds because Chinese money is not closely connected with human-rights progress, environmental issues, or democratic governance, as this is the case with funds coming from U.S. and EU.

Hydropower will very likely become Africa's top renewable energy sector. Hopefully, there won't be any major environmental disaster along the way. Hydropower can give millions of people in Africa the access to electricity without accounting for more greenhouse gas emissions in process.