Africa exporters asked to set up green energy plants

NAIROBI – African firms exporting to the United States should consider investing in renewable energy to make their production more efficient and merchandise more competitive, a Kenyan energy expert said yesterday.

Under a US trade deal, African nations are allowed to export 6 400 items duty and quota-free to the United States but have failed to sell much to the superpower and lost out to more efficient producers such as China.Increasingly environmentally-conscious consumers in the West will be demanding production that is kinder to nature, another reason Africa should spend more on renewables, said Joseph Ng’ang’a, chief executive of Renewable Energy Ventures, a private company.’There is the very real risk that as countries in the West apply mechanisms such as cap, trade and carbon tax within their countries, they will extend the same policies across value chains of imported products,’ he told Reuters at an annual US-Africa forum on how to increase the continent’s exports to the United States from the present one per cent.’This would mean that production costs of goods that use fossil fuel energy would increase and therefore lower their competitiveness.’African businesses have an enormous opportunity to turn waste to an asset and have a competitive advantage relative to Chinese producers, for example, whose energy is significantly carbon heavy due to coal based energy generation.Despite having solar, wind and geothermal resources and idle land that could be used for biofuels, most African nations have grossly insufficient, unreliable and expensive electricity supply that is often the biggest drawback for industries.On average, a Kenyan manufacturer pays between US$0,12-$0,18 per kWh versus a Chinese manufacturer at US$0,04 per kWh, he said.Initial capital outlay for renewables may be high but the advantage of lower operating costs and better competitiveness is strategically ideal, Ng’ang’a said, adding the cost of ‘green’ energy is now almost at parity with grid electricity.A small hydro generation plant can produce electricity costing US$,05-$0,10 per unit while grid electricity in Kenya costs at least US$0,12, he said.A lot of the exporting firms have lots of waste they can use to generate electricity, Ng’ang’a said, citing coffee farms which can use husks for biogas production and still use the substrate as fertiliser.Producers can also seek Power Purchase Agreements with utilities to partially offset the cost of investment or the technology risk, Ng’ang’a said.Companies can also increase revenues by selling carbon offsets generated by renewables, he said.-Nampa-Reuters