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Africa’s laws guide energy transition

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Wind turbines in Lüderitz, Namibia, close to the Tsau Khaeb National Park where the Southern Corridor Development Initiative, with Hyphen Hydrogen Energy, will be developed. Image credit: Leon Louw for WhyAfrica

Africa’s laws guide energy transition

An energy transition in Africa will require policy and legislative frameworks that considers decarbonisation and at the same time addresses climate change and the commitments made under the Paris Agreement.

In Ghana, for example, a recent legal development was the amendment of the Renewable Energy Act, 2011 (Act 832) by the Renewable Energy (Amendment) Act, 2020 (Act 1045) (amended Act). The amended Act was passed on the 29th of December 2020 and establishes a procurement scheme to deliver a competitive market rate for electricity generated from a renewable source.

According to Sefakor Kuenyehia, Solicitor and Barrister at Kimathi & Partners in Ghana the Government of Ghana, through the Energy Commission, has also produced the Renewable Energy Master Plan 2019, and the Sustainable Use of Natural Resources and Energy Financing (SUNREF) 2021.

“Under the Renewable Energy Master Plan, the government proposes incentives in the form of substantial tax reductions. It also proposes exemptions of import duties and VAT on materials, components, equipment, and machinery (that cannot be obtained locally) for manufacturing or assembling renewable energy resources.

Also, under the Sustainable Use of Natural Resources and Energy Financing (SUNREF) Programme, the government, in collaboration with other agencies, is offering businesses, organisations and households an opportunity to access financing for sustainable energy projects, and technical assistance in structuring green investment,” says Kuenyehia.

Kenya (Africa’s laws guide energy transition)

In Kenya, the Draft Kenya Energy Sector White Paper 2022 (Draft Energy White Paper) highlights that renewable energy sources currently account for over 75% of Kenya’s installed power generation capacity, with geothermal (863 MW), hydro (838 MW), wind (436 MW), and solar (173 MW) being the leading contributors.  

According to Amyn Mussa, Partner and the Head of Projects & Infrastructure at Anjarwalla & Khanna (A&K) in Kenya, the sectoral reforms undertaken in the energy sector in recent years have resulted in Kenya having one of the cleanest electricity grids in the world.

These reforms, among others, include the enactment of several laws and policies such as the Energy Act 2019, the Nuclear Regulatory Act 2019, Kenya FiT Policy 2021, the Least Cost Power Development Plan 2017-2037 (the LCPDP) and the 2021 Renewable Energy Auction Policy.

“Although Kenya has adopted new and emerging technologies such as smart grid solutions that continue to make a renewable future achievable, some technologies such as sustainable biomass, battery technologies and green hydrogen have not yet been incorporated into the projected energy mix under national plans, such as the LCPDP.

“Should these technologies be fully adopted and developed, they will present additional opportunities for the country to meet the 100GW target of installed capacity by 2040 through renewable energy sources set out in the Draft Energy White Paper,” says Mussa.

Morocco (Africa’s laws guide energy transition)

In May 2022, the House of Representatives of the Moroccan Parliament unanimously adopted Bill 40-19 amending Law 13-09 on renewable energies and Law 48-15 on the regulation of the electricity sector and the creation of the national electricity regulatory authority.

According to Keltoum Boudribila, Partner, Nasrollah & Associés Baker McKenzie in Morocco, the Bill will aim to simplify the authorisation procedures, to strengthen the attractiveness of the renewable energy sector for national and international investors, as well as to safeguard the economic and social balance of public actors in the electricity sector.

Saad Khaldi, Associate at Nasrollah & Associés Baker McKenzie, says that the new legal framework will allow industries to produce their own renewable energy for their operating needs and supply it to other consumers.

“Morocco has been liberalising the renewable energy sector for several years and is continuing on this path with these legislative amendments,” says Khaldi.

Namibia (Africa’s laws guide energy transition)

According to Axel Stritter, Partner at Engling, Stritter and Partners in Namibia, the Namibian government has stated that to achieve energy security and position itself as a regional African leader in renewable energy, it will focus on securing large-scale, low-cost renewable energy and green hydrogen and ammonia projects that are sustainable and able to maximise fiscal revenue and local development.

“To facilitate this energy transition, the Ministry of Mines and Energy introduced National Integrated Resource Plans (NIRP), being medium to long-term plans that guide state and private investors on least-cost investments in the energy sector, planning scenarios, and greenhouse gas consequences of energy projects. Further, the Harambeee Prosperity Plan II aims to implement targeted policy programmes to enhance post-pandemic economic recovery in Namibia. Improving energy security in Namibia is part of this plan,” says Stritter.

Stritter noted that Namibia currently produces about 40% of its own energy requirements, with around 60% imported from neighbouring countries, including South Africa. The planned renewable energy projects in the country aim to fill this gap and ensure the production of a reliable energy supply in the country. Renewable energy projects in the pipeline include those focused on biomass, solar, wind and battery energy storage.

“Existing solar and wind resources puts Namibia at an advantage in the production of green hydrogen and ammonia, which could assist in making the country the first in Africa to achieve carbon neutrality,” says Stritter.

He adds that the country’s green hydrogen and ammonia plans are supported by the government’s national Green Hydrogen Initiative, which aims to secure high impact environmental, educational, economic, and social investments in the country. The Tsau Khaeb National Park Southern Corridor Development Initiative, with Hyphen Hydrogen Energy, was announced in June 2022. This is the country’s first large-scale green hydrogen project, with the first phase of production planned for completion by 2026. Total investment in this project is USD10-billion.

Africa’s laws guide energy transition

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Africa’s laws guide energy transition

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