Live Wires 3: Where is US support for Africa’s power plants? The data says... meh.
Plus Mega Mania in South Africa & Mauritania, what’s a Blue Dot?, nuclear Poland, and the Mike Pompeo Slayer meets wondrous 🐔🐔🐔.
Live Wires is my occasional short list of what I’m reading/watching/thinking. LMK what you think. 🤔😀🤬
1. If the USG is really an infrastructure game-changer, where are all the damn power projects?
Africa’s unmet energy needs are massive.
More than 1 billion people across all 49 Sub-Saharan countries use less electricity than Canada with just 38 million people.
Nigeria will soon have a larger population than the United States, yet its installed power system is less than 1% of the US total.
This lack of power makes everyday life needlessly difficult for people – and is a cold-blooded killer of jobs. That’s why Nigeria and all its neighbors need to build hundreds of new power plants over the next decades. Growing populations, urbanization, and rising incomes all mean energy demand on the continent will keep soaring. So where are all the power projects?
The White House talks big about its grand ambitions, like the Partnership for Global Infrastructure Investment which is supposed to:
…deliver game-changing projects to close the infrastructure gap in developing countries, strengthen the global economy and supply chains, and advance U.S. national security.
But the gap between ambition and reality is striking. Here’s a graph of all utility-scale power projects that have been approved by the US Development Finance Corporation (DFC), America’s principal agency for infra investment, and its predecessor agency:
Yes, that’s right: DFC funded just one power plant in all of Africa last year, a small 20 MW solar farm in Malawi. And the total for 2021 was also just one power plant, a single small 87 MW gas plant in Sierra Leone. That’s it.
What about Power Africa, the signature US initiative launched with fanfare by President Obama in 2013?
Hard to say too much without 2022 data, but it doesn’t exactly scream that we’re ramping up lately. (If you want more figures and explanations, see my blog post with colleagues, What’s Happening with USG Support for African Power Plants?)
The problem is of course far bigger than US policy. Macroeconomic disruptions, rising interest rates, debt distress, bankrupt utilities, and abandoned reforms all play a role in explaining the dearth of new greenfield power investments. But if the USG wants to make (an even remotely credible) case that it’s a global clean energy leader providing an actual alternative to China and Russia (or even UAE or Turkey), we’ve got a lot more work to do.
2. Might South Africa launch a MEGA round for renewable power?
South Africa’s power system is bankrupt, painfully stuck in coal-dependency, and swamped by corruption. So many challenges lie ahead to reduce rolling blackouts and transition to a cleaner system. Yet the planned reopening of its renewables bid window, which was closed for several years for political reasons, is very promising. The newly-appointed electricity minister is even now proposing a “mega round” of 15 GW of solar and wind farms. Even if it doesn’t happen at that scale, it’s a rare positive sign of renewed South African ambition to tackle its power crisis.
3. Hydrogen MEGA-project in… Mauritania?
The hype around hydrogen has piqued my natural skepticism. Namibia is planning a huge hydrogen project with Germany that is probably the most prominent test case in Africa. I was also struck by the recent announcement (h/t Semafor) that Mauritania is planning a $34 billion green hydrogen project. That one project would be more than 3x Mauritania’s GDP.
The last time I was in Nouakchott was immediately after the 2008 coup when I was the diplomat sent to try to convince the putschist to step down and restore the democratically-elected President Abdallahi. I failed. (Although it did help inspire my first novel.) So you’ll have to forgive me for being wary of Mauritania – or at least being way behind the curve of the country’s transformation into a clean energy colossus.
4. Why a solar farm is like a steak. (Blue Dotters are now 🇺🇲🇯🇵🇦🇺+🇬🇧)
When Dave Bohigian was running the Overseas Private Investment Corporation (OPIC, the predecessor agency to DFC), he had an inspired idea: if appliances and cars and beef all have quality ratings, why not infrastructure? The Blue Dot Network was born. A coalition of the US, Japan, and Australia would work together to certify projects that meet certain standards. The effort would help countries make smarter investment decisions and, potentially, steer more capital into better projects.
The three allies were making the argument that not all roads or bridges or power plants were the same. Cheaper was not always better. In particular, the (not very subtle) point was that Chinese projects might have very low sticker prices, but they might be cutting corners on quality. In the power sector, having a solar farm or a gas plant last longer or need fewer repairs might be the difference between a profitable project and a failed one. That’s why, IMO, the Blue Dot Network is not a terrible idea if it can be done well and not just to try to score cheap political points against a strategic competitor. But, TBH, I kinda forgot about the initiative since we didn’t hear much about it lately. So I was pleasantly surprised to learn not only that pilot projects are underway, but the UK has joined too.
5. Baby steps toward advanced nuclear exports
Speaking of DFC, I was happy to see more forward momentum on financing advanced nuclear exports. The DFC inherited an outdated prohibition on nuclear projects, but the Trump administration wisely lifted the ban in July 2020. (My organization, the Energy for Growth Hub, played a role behind the scenes, which I’ll write about in detail soon.) Now with the restrictions gone, we’re anxiously awaiting a first actual nuclear project to be funded by DFC.
This month, the US and Poland signed new letters of interest that specifically include commitments up to $3bn from the US Export-Import Bank and $1bn from DFC for small modular reactors to be built by GE-Hitachi. Although Poland is hardly a very poor country, I’m expecting non-European countries will not be far behind since most of the markets for advanced nuclear tech will eventually be in Asia and Africa.
And if you’re thinking nuclear = Chernobyl or Homer Simpson, have a look at this helpful primer on next generation nuclear tech by my colleague Jessica Lovering. The NYTimes also has a terrific new piece on why popular fears of nuclear waste are misguided.
6. The Destroyer of Mike Pompeo introduces everyone to the wonder of the chicken egg song
Finally, I promised some fun chicken content on this substack and haven’t really delivered. Partly, the oversight was because of a fox attack that killed one of my favorite hens (RIP Joey 🙁). So I was ecstatic to hear my favorite reporter Mary Louise Kelly introduce a new NPR feature, the Weekly dose of wonder.
Mary Louise is, of course, the whip-smart national security correspondent who slayed Secretary of State Pompeo when his pathetic attempt to make her look foolish backfired as she easily answered his schoolyard challenge to find Ukraine on a blank map. Mary Louise is tough-as-nails, but also has a touching new book It. Goes. So. Fast. about parenting the year before your child goes to college. I’m in that boat too and I’m also a fan of her crime thrillers. Yet I digress…
What’s the first Weekly dose of wonder? I couldn’t agree more. Enjoy.