OVERVIEW
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BURGESS
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DEVELOPMENT
ENERGY DEVELOPMENT IN AFRICA CCSI Columbia University ... Roadmap to Zero-Carbon Electrification of Africa 
Open PDF: Roadmap to Zero-Carbon Electrification of Africa Burgess COMMENTARY This CCSI working paper is about 100 pages long. More than anything this paper adds to the confusion rather than being an easy-to-use and relevant roadmap to an important destination with critical milestones along the way. Worse, the working paper seems to think of Africa as a piece of homogeneous geography when in reality it is anything but. Ever since I started working with data and statistics I have been concerned about trying to report simplified conclusions when the data do not support the simplification. Almost all national data has this problem, and a continent has an extreme instance of this problem. I am a little surprised that there is little about the underlying or foundational technology that exists or needs to exist in order to achieve the stated goal of 'Zero-Carbon Electrification of Africa by 2020'. One of the very big problems in modern economics and development analysis is that the total socio-enviro-economic system is ignored. Instead only a part of the system subject to analysis. In this case the sub-title says it all ... 'The Green Energy Transition and the Role of the Natural Resource Sector (Minerals, Fossil Fuels, and Land)'. From the main contents it is interesting to not the prominent role of the financial sub-sector, but no mention of any part of the social sector either in terms of being an enabler or a beneficiary In the TrueValueMetrics (TVM) analytical approach, the social sector is front and center. Everything else is in support of this. There are three motivations in the decision process: (1) social benefit; (2) environmental benefit (least damage); and (3) economic benefit (including financial returns). TVM Management Analysis starts off with a broad comprehensive understanding of the Present. Closely tied to the present is an understand of the Past to explain why and how the present is the way it is. It makes no sense to repeat the errors of the past, nor does it make any sense to spend time, money and energy on learning what is already known, or building what already exosts. It is often said that if you don't know where you are going, any road will get you there. Accordingly, a clear understanding of the goals is important. There should be a clear articulation not only of a single long term goal, but a complete framework of sub-goals that will enable the long term goals to be accomplished. The sub-goals should be articulated in terms of dpecific identifiable results, activities, actors, places, technology and connection with other sub-goals. All of this can quickly become very complicated, and it is important that all the modules that go into the analytical framework can also be actionable in the real world of implementation. With TVM the conventional financial progress and performance measures remain much the same, but in addition there are progress and performance measures related to social elements and environmental elements. Social elements and environmental elements are not quantified using money as a metric, but indices unrelated to money. Money itself as the prevailing measure of economic performance also needs to be adjusted to reflect its actual value for prevailing economic transactions at any moment in time. (This is addressed to some extent by the use of the Purchasing Price Parity (PPP) frequently used for international economic comparisons. A big weakness of conventional economic analysis is the widespread use of 'aggregations' and 'averages' without an adequate understanding of the underlying components of the aggregation or the 'shape' of the average. For example, in the United States the GDP has increased over time, but for most of the population the per capita GDP (a crude measure of quality of life) has degrade over time while for the top part of the population the per capita GDP has increased substantially. The top is happy. The bottom is not. Another example is that the average for a country does not reflect very meaningfully the situation in different places around the country. There are huge differences between the situation in rural Wyoming and the situation in high density New York City. I am reminded of work I did in the Equatorial Region of Sudan (now South Sudan) where the economic conditions in Juba where are the government offices were located and the region around the town of Yei where about 250,000 refugees from Uganda has been settled. These two places had completely different situations and any average of the two was bound to be wrong! What this suggests is that the planning framework must be sufficiently disaggregated so that the average and the aggregated data for the place actually reflects reality. TVM avoids the use of simple straight line projections. Very little in the past has followed a straight line trajectory of change, and there is little reason to expect this will happen in tbe future. Rather, the analysis should incorporate improvements in technology that will result in improvement in performance. There must, however, be everything associated with a positive enabling environment so that there are the improvements in technology that are needed for this to happen. There are some aspects of a development strategy that will benefit from appropriate localization, but there are also some aspects where a network effect is going to be the best way forward. Peter Burgess More Burgess COMMENTARY I am reminded of some work I did early in my career when I was training as an Articled Clerk with Cooper Brothers & Co in London. The World Bank had asked CB&Co to review the project in Zambia to build the Kariba Dam together with a hydro-electic power station in Zambia. I was assigned to check out the costing for the project. Though I was in a training mode in accountancy, I already had a Cambridge degree based on study of engineering and economics and had some heavy engineering experience with a company that built everything associated with the iron and steel industry and managed integrated steel mill construction around the world. My analysis showed me that the World Bank cost projections were about 50% of what they needed to be. While the World Bank arithmetic was right, the underlying assumptions about the behavior of costs was completely wrong. The proposed scale of the project meant that there would be massive price inflation in relation to all the key materials as well as wages. I proposed that the anticipated cost of the project should be doubled! My immediate supervisor reviewed what I had done. This was followed by another more senior manager reviewing my work and finally the partner who worked on World Bank matters. Quite quickly they determined that CB&Co would inform the World Bank that they should increase the anticipated project cost by 100% and adjust the financing plans to reflect this. The CB&Co recommendation was accepted, and when the project was completed the actual project cost was very close to what we had projected. Fast forward many decades and it seems that there remains a very large gap between what people think something is going to cost and what it actually does cost. Getting cost estimates right requires a lot more than a simple mechanistic approach, but a good unserstanding of the behavior of a lot of different elements, some of which interact in quite complex ways. Perhaps just as important is the sad fact that few people talk about the extremely low costs associated with high volume digital technology and the obscene levels of profit that is usually associated with the application of digital technology at scale. I have said for a long time ... going back to the late 1980s ... that the biggest cost in the modern economy is profit. This is the mechanism that results in users of digital products and services transferring wealth to the owners of digital technology and services and a major root cause of growing inequality. Peter Burgess | ||
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CCSI Columbia Roadmap to Zero-Carbon Electrification of Africa
All Africans—whether living in urban or rural areas—need access to affordable, clean, efficient, reliable, climate-proof, and renewable energy for both residential and productive uses to achieve sustainable development objectives. At the same time, the world is moving to decarbonization by 2050, and Africa will be part of this global trend. Prospective oil and gas projects in Africa will no longer be pursued as overseas markets, and financing will shrink. At the same time, Africa’s vast renewable energy potential, in the solar and hydropower sectors especially, will engage increasingly bankable and highly attractive investments. In net terms, Africa has a huge amount to gain from a decisive build-up of renewable energy and the capacity to produce the minerals, hardware, and software of the new zero-carbon energy economy. With support from the African Natural Resources Centre of the African Development Bank (AfDB), and under the guidance of Prof. Jeffrey Sachs, the CCSI team prepared a report setting out a comprehensive and actionable roadmap for Africa’s zero-carbon energy transformation by 2050, with most advances achieved by 2030. Starting from a simple and transparent model of the annual investment volumes needed to provide continent-wide access to electricity based on renewable sources, the report addresses various imperatives and challenges regarding Africa’s energy planning and financing and outlines recommendations for immediate implementation of the strategy from 2022. The September 2021 draft report for consultation—'Roadmap to Zero-Carbon Electrification of Africa by 2050: The Green Energy Transition and the Role of the Natural Resource Sector (Minerals, Fossil Fuels, and Land)'—is published here as a CCSI Working Paper. Please share with us any feedback or comments. CCSI is grateful for the AfDB’s support. The views in the CCSI Working Paper do not necessarily reflect the views of any other organization, including the AfDB. ---------------------------------------------- Table of Contents
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