Interview to Manuel García Domínguez
“Renewable energies and telecommunications are two key factors for a successful economic and social development”
We continue with the 2020 editorial line: climate challenges. We have interviewed another collaborator to deal again with an economic challenge to transit to a sustainable energy system: energy for development, without encumbering poorer economies. We have asked Manuel García Domínguez, Director of Smart Energy Concept for West Africa, his point of view on this challenge.
What are the main differences of the energy sector in emerging economies compared to more developed ones?
Let’s take Benin as an example. As many African countries, its economy depends on the export of raw materials, one or two products, in this case cotton and cashews. The generation, transportation and sale of energy are controlled by the SBEE, a very fragile state company from a financial and management point of view.
They import 85% of the energy consumed by the country. Their production is based on fossil fuels. They have a weak grid with frequent power cuts and 50% of the population has no access to electricity. Moreover, as energy is imported, it is expensive.
These facts prevent the development of a textile industry in a country that mainly depends on the cotton export. Even though it has competitive advantages such as the access to raw materials, the cost of labour or a geographical position next to the American and European markets, compared to the large Asian producers.
Corruption and fragile states are also endemic factors that must be considered to guarantee stable legal frameworks. It should also be pointed out the deficiencies of the local banks, as they consider renewable energy projects as a luxury, not as a necessity.
These circumstances can also be extrapolated to almost every country in West Africa. The positive part is that markets are being liberalized in those places where there is no state electrical grid. The challenge is to unblock international financing to boost the access of energy.
“Ensure access to affordable, reliable, sustainable and modern energy for all” is one of the United Nation Sustainable Development Goals. What specific actions are being carried out globally to achieve this target?
In Africa, the US and European institutional international cooperation is basic. There are clear geostrategic reasons to commit to the soft-power of cooperation to guarantee their influence in the region and access to raw materials −80% of the global reserves of coltan are in DRC, of bauxite in Guinea and so on−.
So, all cooperation agencies are directing most of their resources to the financing of renewable energy projects. For example: just in Benin, the North American cooperation, Millennium Challenge Agency (MCA), is financing $375M PV projects at sunk cost.
However, the challenge is to find companies with knowledge of the African markets and with enough capacity to carry out quality projects in cost and deadlines. Another example, MCA provided Senegal with a similar $500M programme, and it was not able to execute it, so, after two years, MCA removed the financing.
How could a public-private cooperation help to achieve it?
The sector liberalization is a fact. The only different between the different countries is the speed. The lack of resources of the governments is endemic. The only possible way is the public-private cooperation through BOT or BOO models.
Legal frameworks are more and more aware of this kind of cooperation in the renewable sector. The UN, cooperation agencies… the commitment is very strong.
Now the challenge is to attract international financing and find companies that can execute the projects. Unfortunately, Spanish companies are strangers to the African market, except for isolated collaborations.
Could the development of renewable energy be a driver of economic growth?
Renewable energies and telecommunications are two key factors for a successful economic and social development. Just one example: in Central Africa, at 7PM is already dark. How can a child study without light? Renewables and telecommunications are going to change the African profile. Think about 1000 million brains with access to education, undertaking of businesses… the release of all this capacity is going to be huge for the development of humanity.
How does access to electricity affect a country’s development?
The history of humanity is linked to the capacity of humankind to manage energy. Everything started with fire, the wheel allowed us to better manage the animal energy, Rome plows provided us with a more efficient agriculture and created the Roman Empire. Wind allowed the discovery of America thanks to vessels such as caravels that could cross the Atlantic. Watt’s regulators, the Industrial Revolution, nuclear energy… All large empires are linked to huge advances on energy management. We can relate the humankind evolution to the management of energy.
It is fun that a lot of people consider renewable energy as something new. We went from Palaeolithic to Neolithic when we learn to better use solar energy and water in intensive agriculture. Vikings were really some people who learnt how to use wind in a more efficient way, what allowed them to sack Europe. Don Quixote saw giants instead of windmills and he might not be so wrong…