Huge diesel tankers still dock regularly in the ports of Cape Verde in the Atlantic, bringing fuel to the small island state with few resources of its own.

Cape Verde is a member of the Economic Community of West African States (ECOWAS), along with 14 other countries including Ghana, Mali and Niger. 60 percent of the community's electricity is provided by oil – an option that is not only bad for the environment but in an era of climbing oil prices, costly too.

But sometimes the good things in life are free – including sun and wind. Renewable energy is an affordable alternative for countries like Cape Verde, especially considering that 80 percent of West Africa's households are off-grid.

"Decentralized wind and solar-power solutions for domestic use in rural parts of West Africa are already cheaper today than electricity supplied by expensive diesel generators," says Martin Lugmayr, an expert on renewable energy who is helping introduce renewable energy to the region on behalf of ECOWAS. In many cases, investments pay off within a few years.

Efficient and economical

Though per capita electricity consumption in developing countries is low compared to industrialized countries, there's still plenty of potential to lower energy waste.

According to Lugmayr, the costs of air conditioning and electric water heaters, which often account for over 50 percent of electricity consumption in West African hotel complexes and offices, could be significantly reduced by the introduction of more efficient appliances and building approaches. He suggests that solar-thermal units that can heat water directly are a viable alternative to continuous flow heaters which might be cheap to buy but are costly in the long run.

"For hotels in sunny regions, solar thermal systems will have paid for themselves within four years," he says.

Renewable energy can also play a big role in potentially avoiding additional costs caused by rising global temperatures.

"The frequency and strength of extreme weather have increased in recent years, which is largely a result of climate change," says Michael Able from Munich RE, one of the world's leading reinsurance companies. He points out that developing nations are often the worst-affected and sees a greater reliance on renewable energy as one way of cutting the costs incurred by environmental disasters.

"It's not easy to identify which damage is caused by climate change and which is caused by other factors," he says. "But it is a fact that environmental disasters are on the rise and we do believe that climate change is a cause. So we also believe that taking measures to combat climate change with a gradual switch away from fossil fuels to renewable energy makes economic sense."

A guaranteed return on investments

For a country to rely on renewables for 100 percent of its energy needs, the electricity grid needs to be restructured to deal with strong fluctuations in stored solar and wind energy. In industrialized nations in particular, the grid is designed to accommodate inflexible coal and nuclear power stations which feed the grid day and night with a continuous supply.

By contrast, solar energy is hugely dependent on the weather and electricity production can fluctuate greatly. New grids therefore need to be capable of storing large quantities of energy extremely fast and transmitting to regions where production is low – for example, when strong winds are blowing in northern Europe but not in the south.

In the long run, a smart grid also helps consumers save money. Intelligent household electricity meters can recognize at which times of the day electricity is cheapest and washing machines and dishwashers, for example, can be programmed to switch on at exactly these times.

Savings guaranteed

Economist Claudia Kemfert from the German institute for Economic Research (DIW) also sees potential in the switch to an intelligent grid.

"In Europe, simulations show that a more efficient grid could result in savings of up to two billion euros," she says.

In macro-economic terms, investment in renewables is set to pay off. Kemfert predicts that a steady development of the industry will result in a 3 percent rise in Germany's gross domestic product (GDP) by 2030 – a growth that will not occur without this development, not least because of the job opportunities the industry entails.

Martin Lugmayr is equally confident that expanding the renewable energy market will create jobs in West Africa.

“Small service companies in rural areas will profit from a boom in solar and wind power solutions for household lamps, water pumps and medical cooling systems,” he points out.

Lugmayr hopes that the introduction of renewable energy will act as a motor for economic growth and give new economic impetus to rural regions hit by an exodus to the cities.

Kerstin Schnatz (jp)
Editor: Sonia Phalnikar