Today’s guest on Cleaning Up is Damilola Ogunbiyi. Damilola is CEO of Sustainable Energy for All, the UN partner organization dedicated to achieving Sustainable Development Goal 7 (SDG7) – access to affordable, reliable, sustainable and modern energy for all by 2030.
Damilola is a returning guest on Cleaning Up after first joining us for Episode 62 in 2021. She’s back to tell us how SEforAll is progressing in its mission to bring electricity to the whole world. After talking Michael through a raft of SEforAll’s new initiatives – across everything from clean cooking to carbon markets - Damilola ends with a passionate plea to change the conversation around the energy needs of the developing world:
“What is happening is you're using a conversation of no fossil / fossil to fund nothing… The crux of it is, if you look at the money that's going in to Africa, 1.5% of all renewable investment? It's absurd, it is embarrassing.”
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Relevant Guest & Topic Links
Learn more about SEforAll’s mission: CLICK HERE
Find out more about the parameters of SDG7: CLICK HERE
Read and explore last year’s Energy Progress Report 2022: CLICK HERE
Damilola first featured on Episode 62 of Cleaning Up in 2021: CLICK HERE
Edited Highlights from Episode 62 are available here: CLICK HERE
Episode 118 of Cleaning Up featured Achim Steiner, Administrator of of UNDP and Co-chair of UN Energy alongside Damilola: CLICK HERE
Our episodes featuring Alain Ebobisse, Elizabeth Wathuti and Bill McKibben can all be found in our Development playlist on YouTube: CLICK HERE
Damilola Ogunbiyi is the CEO of Sustainable Energy for All (SEforALL), Special Representative of the UN Secretary-General for Sustainable Energy for All, and Co-Chair of UN-Energy. Before joining SEforAll, Damilola was the first female Managing Director of the Nigerian Rural Electrification Agency, where she initiated the Nigerian Electrification Project, a programme that to date has provided energy access to over 5 million people across Nigeria
Before joining the Federal Government of Nigeria, Damilola was the first female General Manager of the Lagos State Electricity Board. Under her leadership, five independent power projects were completed to deliver over 55 megawatts of power to Lagos State hospitals, schools, and government facilities.
Damilola is a member of the Global Leadership Council of the Global Energy Alliance for People and Planet, an Advisory Board member of the Centre on Global Energy Policy, a member of the Development Advisory Council of the U.S. International Development Finance Corporation, a member of the Clean Cooking Alliance Advisory Board, a member of the Advisory Board of University of Oxford’s Future of Cooling Programme, and Co-Chair of UN–Energy.
Damilola holds a bachelor’s degree in Project Management with Construction and a Master’s degree in Construction Management with Public Private Partnership from the University of Brighton.
Michael LiebreichDamilola, welcome back to Cleaning Up.
Damilola OgunbiyiHi Michael, thanks for having me back.
MLNow, you were our guest on Episode 62, which is actually as long ago as 2021; it was just before the Glasgow COP26 meeting. So, I hope you've been well since then.
DOAbsolutely. And great to see all the success for the show, and the amazing guests that you've had on since I've been here.
MLNow, we met briefly a few weeks ago at the Energy Institute dinner where you were being honoured, you got the President's Award. So, let me start by congratulating you again on that.
DOThank you, Michael, it was a great honour.
MLNow what I'd like to do to start with, is just to review those two years since you were last on the show, because they've been incredibly turbulent years in the energy space: we had at the end of COVID prices starting to ramp up; then of course, this terrible trauma of Russia's invasion of Ukraine, and what that did to energy prices; you know, an extraordinary spike, where we're hopefully now, we have been coming down the far side, and hopefully that continues. What has that done to your missions of energy access, renewables, energy efficiency? Has it set it back? Have people been worried about other things? Or have you made progress?
DOWell, it's kind of a double-edged sword, to be honest. I mean, the crisis was caused multiple crises in terms of energy, food, and finance, right? So, on the good side, it has allowed people to really look at debt servicing, and what's really happening with countries, what does food security really mean, and what does energy security mean? And it has mean meant a boost in renewables; you know, the EU will double the number of renewables that they have between 2022 and 2027, which shows that we can do things at scale. On the other side, what it also has meant is that there's a rapid growth of getting to clean energy in the Global North; we're not seeing the same thing in the Global South, especially in the developing world. So, what has really happened is that things have been a bit stagnant in the developing world, and not as much growth in terms of the number of renewables, or clean energy, or even power development actually happening. We still have - I believe these new tracking reports for this year will show that - we still probably have about 600 million without access to electricity, which is better, you know, then having 759 million, but it isn't fast enough, right? Now, we're looking at 2021 figures, so we're in COVID times; we're not looking at the figures yet for the people who went back to extreme poverty. And the people that go back to extreme poverty are normally the people that lose their access to energy, go back to not having access to clean cooking. So, it has made it even more important for us to stress a lot the energy transition cannot happen without energy access. And unlike other countries that are switching from one fuel source to another fuel source, in the context of people who don't have energy at all, they just want some energy. So, we've been stressing that point. We've been helping a lot of governments now with what does the energy transition plan look like? So, my government in Nigeria announced net-zero by 2060, which is a big deal for a big oil and gas nation. We're now doing the same energy transition and green growth plans for Kenya, Ghana, Barbados. So, you have a lot of governments now saying, okay, we don't want to be left behind; how do we make sure we're in this conversation, and what is the cost and the conversation? What we're not seeing is the money on the table to help countries really develop. There's still a huge gap. I believe in 2021, or between 2020 and 2022, there was only 1.5% of all the money that went into renewables actually went into Sub-Saharan Africa. So, you've got 15% of the world's population only having that level of investment. So, you know, the inequality is a real issue, and that's what we're trying to stress, and drive, and make you it's a key agenda for COP28 in the UAE.
MLThank you very much, that's a great summary. I'm going to just pull out one number that you used there, which was 600 million without access to electricity. And taking your caveat that that might have gone backwards, I would just say that, when I started working on - prior to Sustainable Energy for All, and it was called the UN Coordinating Initiative on Energy, which would have been about 2008 - the number was 1.4 billion. And so, you kind of have to take the win, but it's completely... it's still inadequate, there's still 600 million. And of course, how are we doing with cooking? Do you have a metric on clean cooking?
DOSo, on cooking, I believe we are at about 2.4 billion now. That might go down to 2.2 billion. So, it's still an issue.
MLThat has hardly moved. I mean, over that period, where electricity access, non-access has more than halved, the clean cooking... I think it's the same number that we were using back then.
DOAnd what is so sad is just the level of investment in cooking. You're still talking about the millions, instead of the billions that go into cooking. So, it's no surprise that it hasn't moved because of the lack of investment. But what is surprising is that clean cooking, is actually one of the major effects to climate, right? Chopping trees down... It's almost like you don't make that connection. And then what is really worrying - and very, very close to my heart - is just the level of mortality, you know. There's probably a million people a year that die from this indoor air pollution, so it can be solved. And it shocks me that, you know, as a global construct, we don't think a million people dying every year is an emergency, right? So, there are those type of very, very key issues that we just have to be part of, and we have to keep on reinforcing; that it's not okay to continue this way. And you have to also answer understand when I talk about the financing: doing a project in Europe, or in the Global North, is completely different in emerging economies and developing countries. Some developing countries projects are circa 20%, interest rates, right? So, even if you want to do it, it's just not viable. So, there's issues with local currency, there's issues with Forex. But again, if things are a crisis, like how we saw with COVID response, then the money is made available, and it should be made available quickly. So, we're also challenging the DFIs on your processes, your procedures, and how much money is available, and how you should make sure, or try and make sure, you limit these things. As you know, Michael, I ran the largest energy access program on the continent before, which was a program with the World Bank and the AFDB. And I know what it's like to go through that process. One of my jobs now is to make sure no other country has to go through that! Because we can't keep on having the one program in Africa over half a billion; we should have had 20 to 25 of these projects by this time.
MLLet's come back to the question of finance; I know you and your team have been doing a lot of work on that. But I want to just stick with, if we can just stick with cooking, because I don't think it gets enough attention. I couldn't agree with you more: a million people dying of indoor air pollution, it never gets the attention that it deserves. I'm always amazed how many column inches, or how many internet screens are devoted to climate crisis, and deaths from, for instance, storms or floods, but they are so small - all tragic - but so small compared to... Actually, there's another one which is road deaths, which is also over a million a year globally. But cooking is fairly and squarely our problem, it doesn't get the attention... Do we yet know what are the actual technological solutions? Because clearly just saying, well, they should all get electric hobs is not realistic, given the poverty of a lot of the people who are cooking currently with firewood or charcoal or even dung. So, what is the solution? What are the programs that you ran in Nigeria, or the programs that you would like to see funded, what actually are they?
DOI think I want to like to step back a little bit because we're talking about electrification and I forgot to mention a big point. The reason why the electrification figures jumped so much, was really because of one country, which is India. India had to power 1.2 billion people, so India provided power to about 700 million people in the last 10 years. And it's really important to put it in perspective. So, it's not like okay, it happened everywhere, right? It specifically happened in India. I'm now saying that in terms of cooking. So, let's move on to clean cooking now. There's a lot more in terms of technology, in terms of clean cooking stoves, there's a lot more in terms of pellets, that you can use. And now there's even some handy, almost solar home system device type of cooking solutions, because people know that you don't need as much as needed. I think, why is this so critical to attack cooking, is because people don't talk about gender-based violence. I mean, we were in parts of Sudan the other time and they're like, oh, yeah, so I'm going to go out, probably be raped on my way back - it's just how it is - on my way to collect fuel wood. And I was like, what? You are one in four times more likely to be beaten by your own spouse, when food is already on time - it's just an awful, awful existence. So, I get very upset when people go, oh, let's not put in these new technologies, and stop the way of life or the way they enjoy cooking - that is absolute nonsense. There's no woman who wants to walk four to five hours a day, at risk of getting raped, to get fuel wood to come back to spend another five hours trying to cook. So, it's not there. What is important is that these things have to be affordable, and have to be sustainable, and for that, you have to have subsidies. So, we're working on a subsidy program, now a resource-based subsidy program now for cooking, for clean cooking. So, if you install a clean cooking solution in a household, we will provide you funding, post-installation, to make sure you did that project. These things are important because you have to understand that these people are used to the fuel source they use - which is wood - being free. So, it's not that easy to say, we're just going to charge this, we're not going to charge that. But if it is a climate crisis - that we say it is - it is something that we should be able to put together to afford; it will create so many jobs for women within those localities to get right. And we've done a lot of work on even mapping clean cooking now. So, we have integrated energy plans that are beyond electrification. They also show cooking, and they also show cooling. Where is it needed? Where are the agricultural supports that could do with cold storage, to avoid food being spoiled? Which primary health care centres do you have to put power to so people don't die? It seems very basic, but a lot of people just have, okay, a plan for cooking, a plan for cooling, a plan for electrification; they haven't put it all together in something that policymakers can use to define their mandates for the countries.
MLAnd one thing that - when I was working on these issues more intensively - came up was LPG; to say, well, look, the simplest swap, particularly for the health implications, is to go to LPG, so that there's no firewood, no charcoal, no dung, nothing... because electrification of cooking is hard. When you say that there are solutions, you need quite a lot of electricity, it's not just a small panel on the roof before you can go to an electrical solution. And so, it's very difficult for me sitting in London, or here I am today in Switzerland, to say, oh, LPG is a fossil fuel, and it's evil and bad, and you shouldn't do that, and you should spend another 10, 15, 20 years cooking with fuels that are bad for your health. Has the discussion, has the technology moved on to the point where that's no longer the picture? Where we really can go to electrification?
DOWe can go to electrification; we just need to understand the needs. And you have to understand that LPG all depends on if countries have that as well, right? So, there's also a great expense if you have to truck it in, bring it in. That's why it's so important to do projects and plans based on what is locally available in those communities, and in those places. I don't think anybody would say switching fuel wood to another power source is wrong, right? But what could be sustainable? And the last four or five years... I was in Ghana earlier, I think this year - sorry, I'm mixing my years for the clean cooking conference - and I was astounded with the level that the technology had gone to. It's just like back in the day how you couldn't imagine, you had those storage points for electrification, and now you have 5 kVA, nicely packed, or 10 kVA on the side; you'd never had that before, you'd have rolls and rolls of gel batteries. So, technology has moved forward. Is it perfect? Absolutely not. Is the price point perfect? No, but the price point for clean cooking is never going to be perfect if we do not invest a lot of money into it, right? So, I believe as of last year, or the year before, there was only 37 million dollars invested in the whole clean cooking sector, right? To drive these technologies, you need about 4 billion a year, for us to even know what the perfect balance will be. So, we're not there yet with the funding, and I'm shocked that we even have this amount of innovation, just based on the little amount of money that actually goes into that sector. And the CCA: I hope, one day you get to interview Dymphna; Clean Cooking Alliance have been doing an amazing job on just getting clean cooking on the map for you to talk about clean cooking alongside electrification. But there's still a lot of money needed for something that affects us climate-wise, probably more than anything.
MLIt's really exciting that there is that level of innovation; it sounds like I need to check back in to my clean cooking technologies, and see what's there. But you make a very good point, which is that if the solution is currently regarded as free - in other words, firewood, maybe charcoal, charcoal is not free in these countries is it, but dung and firewood are and therefore - ultimately, it's just going to have to be somebody puts their hand in their pocket, in the same way that is needed to upgrade sanitation, for instance, or to provide basic education. It's a right and a need, and we're just going to have to do it. But you have also been innovating on the finance side, so let's come back to finance now. And you've been doing some really interesting things around carbon finance, around different models of finance. Can you share what you've been working on?
DOOkay, great, and thank you for asking. There are three key programs that we're pushing on. The first one is, we actually have a subsidy program called the Universal Energy Facility. And what that does is that it takes people who connect mini-grids, or solar for productive uses to... energy, either to the consumer on the household level or the business level, you provide them a subsidy so it's viable. So, put in kind of very crude language, let's say a connection costs $200, but to make it affordable, it really needs to be $70: we provide that $30 for it to be sustainable, and for that business to run. Why is was important not just to do household and to do businesses is because we actually listen to the public. And a lot of people in these communities were saying that if you provide us power where I work, which is where I am for 16, 18 hours a day, I will sort out my home, because I will have disposable income. It's also important that the SME market are the closest in terms of driving GDP. So, we've been looking at that. Currently that is pure philanthropically-funded. People fund us, and we [inaudible], we're in five countries right now: Nigeria, Sierra Leone, DRC, Benin and Madagascar.
MLI wanted to ask, how do you get those subsidies to the level of the SME or the home? Because there's a real challenge of scaling these programs. Because it's nice to go and give somebody $30 that makes the difference, but how do you get it between, in a sense, your office and that person?
DOOh, no, you're not giving the person, you're giving the operator. So, we're giving the developer, and that's where the local content comes in. So, what happens is, there's a lot of already local entrepreneurs, right, who've already gotten a catchment area with people that they wanted to supply energy to. For them to even get their loans they need... If you think about it, were kind of like their guarantee, almost. They take our grant agreement, saying that they will definitely pay us this subsidy if you give me money to connect; if you think about it, again, in the crudest manner. They then connect to the customers; they don't get paid until they're connected, by the way. So, you're not giving any money upfront, you're giving money after you verify the connection, which is why it's different. There's been lots of projects, even with government that, you know, you do everything upfront, and that hasn't necessarily gotten any more electricity, if we're going to be very honest. And it is also in their favour to continue it, and for us to continue tracking, so they can be part of subsequent subsidy programs. I believe results-based financing, not just the one way of doing it, is how things should work, but I believe it's also a way that it can happen quickly. So, you can go from application to approval that you've gotten it in about three months, instead of what normally happens, which is like a two-year process, right? Because one these guys can't afford it, and why are you being so strenuous with them? Because if they don't connect the customer, you're not paying? So, those are the types of things that we're trying to do. We are not the World Bank, but we're trying to set it up so we encourage the enabling environment. So, in terms of let's take Sierra Leone or Benin, it allows us to test the regulation; it allows us to even support the regulator with their applications for land, for permits, for things like that. And just because people... it's so easy for people to say oh, that country is not ready, or the bottlenecks; sometimes they just don't know. They don't know what they need to do. So, it's important, especially from my experience in Nigeria, where 10 years ago, people were saying solar doesn't work. That was it in Nigeria, if we're going to be really, really honest. Till now, you know, where you have hundreds of megawatts, probably have 120,000 connections every single month; that took a process, and that took a lot of education. And those are the things that we wanted to add. We're not there just giving money; we have to educate everybody in the value chain, including the developers, on how to do this.
MLSo, I don't know if you know that I did a project in Sierra Leone, the only project that I've ever tried to do in any of these countries, which was a neo-natal intensive care hospital, which had intermittent power, and every time there was a power cut, the babies would die because they need oxygen and warmth. And we did a project, and it was enormously successful, but the learnings... You have to do the stuff to learn, you have to do it. And then you learn about where the bottlenecks are - they're not where you expect them. That project actually, it fell over during COVID. There was, I think we had a fire in the battery bank, for some reason we don't know. But we're now restoring it, so I'm going to do an episode later with the doctor. And maybe you can come with me, we're doing six primary health care centres now - solar plus storage - which is so so exciting. Primary health care is very, very close to my heart, because it directly links to infant mortality. If you have a job... saving a baby's life; what else do you want in life?
MLAre those six in Sierra Leone?
MLYes, they're in Sierra Leone, so we can send you the details to them. Again, it's not necessarily our job to go and be fixing things like that, but we wanted to show that the solutions, the designs, and things that we've been saying in our primary health care centre work, we wanted to show it working. And luckily, thanks to FCDO, they gave us that opportunity to show, okay, what does sustainability look like? What does your O and M really look like? What do you need to factor in? What reserve batteries do you need in place? What reserve panels do you need in place? What can go wrong? What should be the affordability costs? I started my life on primary health electrification, so I'm super excited that I get a chance to do this in Sierra Leone now.
MLWell, that's a fantastic invitation to come and visit that, because I do at some point need to go to visit the installation. And it's in I think the second largest city in Bo, and we're going to get it back operating. At the moment, it's operating in the sense that there's a diesel generator powering the stuff we put in, but obviously, we want to get it back onto the batteries and solar, and that is a current project that I'm working on. And then I'll want to go and visit it, and I would love to visit other installations
DOWhen we go and commission ours, maybe I just invite you to come along.
MLExcellent. Excellent. Let's do that. And I must introduce you to the extraordinary doctor who set up the neonatal intensive care unit. But you said that were three, and that's one. So, that's a grant program going to developers who are making new electrical connections to businesses and homes. What's number two?
DONumber two is the African Carbon Market Initiative, which we worked on with the Global Energy Alliance for People and Planet. Yeah, GEAPP, and also the Rockefeller Foundation. And the thinking around this was very simple, it was: how do you scale up high-integrity African carbon credits, to make sure that Africa is not left behind when everybody's claiming carbon credits, and it being almost like the biggest net-exporter of this to be able to fund the transition. So, we have all sorts of programs from... We actually just had an event in Nairobi two days ago with developers. We're going to have a register of projects that are carbon credit-worthy at different stages, so everyone around the world can see that. We have an advanced market commitment section, of which we already have 200 million of advanced market commitment, based on high-integrity. We have another section that's looking at, you know... it's okay for people to get the money, but how do we get the money to the local communities, really get the money to the local communities? What should be the split? How exactly does it work? That is a very important component. And - I was going to say finally, I don't think it's finally - there's a workforce component. And then finally, finally, we are also working on what is a carbon market activation plan actually look like for countries? So, Kenya is first; we're then going to move to Ghana and Rwanda, and we'll try and do as many as we can, but it's to do with funding. And that's looking at everything from your regulations, to your policies to what is stopping it in your laws, everything that you need to do to really, really scale up. We are starting with the voluntary market, but eventually, obviously, you want to get to a compliance state. So, we're doing that, and I'm also, obviously speaking to the EU and the Europeans, who always want to do something with Africa, and saying, can you, you know, can you put some lifts on your carbon market? Can we really look at this pricing stuff? Because it's just not okay for the same tonne of carbon in Rwanda to be sold for $3, and in Europe to be sold for like 100. It's just not just. So, I'm super, super excited about that. I'm learning every day about the carbon market. But it's the innovation that we need. Everything else is going along, but we need new injections of disruption, innovation, to really give people hope. And so, that's what the African Carbon Market Initiative, will do. The last one...
MLDamilola, before you move on, if we take this in order, I want to comment on that, because it's such a shame that you and I did not have this conversation in 2020. Because in 2020, I identified the exact same issue you put your finger on, which is: absolutely by far the largest potential new entrant into the carbon credit provision, as a source of carbon credits, of actually emission reduction opportunities, is Africa. And it would be completely unacceptable for a whole bunch of companies to go and buy those credits for, you know, $5, for them to be low-integrity credits for them to say, oh, well, we've done this, and we've done that. And at the time, all of these companies, all the oil companies, all the airlines, they were all saying, oh, we can't change our business model, but we'll buy credits. And you knew that the risk is they'll buy them for $5. And to move to high-integrity credits, where your countries - not your countries, but the countries where you're working on energy access, and poverty and health and all those issues - they should be getting $40, $50, $75, $100. But there are certain things that have to happen. And I started to work with the team at Africa Great Green Wall, who were very excited; they were starting to look at this, and they have, whatever it is, 30 countries in Africa that they work with on stopping deforestation, and then reforesting and integrating it with local communities. And you know, what happened? President Macron promised, I think it was 10 billion euros to work with Africa Great Green Wall, and they stopped answering the telephone. Not surprisingly, since I don't have 10 billion euros. I have no idea if a single Euro ever flowed; I don't know if anything ever happened. I don't maybe you know.
DOI'm not sure if about that. But we are working with the Congo Basin, and we're also working with Gabon, because it's also important to capture carbon sinks, right? You can't say that people are not gonna get funding for preserving their forests, right? Or preserving the lungs of Africa, but you can get money if you cut it all down and then replant it. That isn't okay, and again, it has to be priced correctly. But I'm even more excited on the energy side, Michael, right? Because what is our true energy transition, if we think about it? It's diesel and petrol gen-sets, right? Most of them are less than six kVA, right? So, most of them can have some solar plus storage solution, and they are high-integrity, because it's either there or it's not. It's actually one of the easiest thing to verify as well, right? It's not like I planted a million trees that way, and there was a flood; if you're connecting, and you're using diesel, like you were saying in the health centre, and if you're using solar plus storage, you can see, and you can capture that. We realize that there is a methodology, but it's not as robust, because let's think about it: apart from Africa, how many other places do you have diesel and petrol gen-sets as almost your main source of energy instead of your backup energy? So again, we're working, obviously working with the UN as well, with UNFCCC to say no, we need to have these methodologies in place, right? We need to have it properly priced and move forward. But you know, it's a program that is going to take a life of its own; it's going to be run by Africans in Africa, I'm super excited to be part of the founding cohort, initially. But it is something that you know, really, really hoping it will be big, it will be huge, gives people hope. Because, you know, it's not fun going back and saying okay, we want to do this; I want to go clean, but I have no idea where the financing is coming from. And if people are having problems with emerging economies, they're not gonna put any money in the developing world. And we just have to be honest with people while challenging the norms.
MLVery good. Now, the third of your three finance related initiatives? My last super exciting one is, or that I'm excited about, is something called REMI, which is Renewable Energy Manufacturing Initiative. We've got an African one, and we've got a Southeast-Asian one. The African one is the most developed, where we said, okay, fine, wow do we make Africa a production hub, instead of just an extractive continent? So, we looked at two key things: solar PV, and lithium battery manufacturing, and we identified six countries for that, all at different stages of manufacturing. Again, it's really important that you... Again, taking my country, like a state like Nasarawa state: people mine lithium, send it to China, and then bring it back 100 times the cost; that's just what we're used to, that's life. We're like, no, how do we change that? It's also coming at the right time, because even the Chinese and the Indians are trying to spread out their supply chains. The time it is taking to get things on continent, and to different places is important. And then in the African sense, because we're all doing quite a lot of clean energy projects, like with the African Continental Free Trade Zone and things like that, how do we actually sell and trade to ourselves? So, that is the last one, I'm super excited to say, look, how do we actually make this work? Instead of like, oh, you're not a manufacturing hub; you're like, no, if there are key off-takers, and there's money to be made, and there are jobs to be created; these are the things that really make the building blocks for the energy transition that we don't really hear about in a lot of these public statements.
MLI have a question on that. It makes perfect sense that, if you've got the minerals, to move up the value chain and actually get the jobs and the value-add, to do more of the manufacturing. But my question is this: I'm also adviser to the UK Board of Trade, and one of the issues that has always plagued... developed countries love to import all of the raw materials, tariff-free, but not the manufactured goods. Have you looked at that? Are you finding that there are tariffs, if you start to make not just lithium, but you start to make battery components? Or not just... I don't know, some of the raw, rare earth minerals, but if you started to make permanent magnets, would you then be hit by tariffs? Is that something we also need to work on?
MLYes, I mean, you'd be hit by tariffs, not just by the UK and EU, but also the US. But you know, everyone's also assuming that, there can't be enough trading within continent; there's not enough off-takers within like... You know, if Morocco has a PV plant, why can't Ghana buy from them, you know, what I mean? We're going to all use this, right? There's all these programs every year. But we do have to challenge the international... the developed world. And I think, you know, if everybody is being honest about the fact that we really, really need to diversify our supply chains, just to get things there, a considerable amount of the minerals are going to come from Africa. So, if African countries, like I think Uganda has just passed a law or policy saying you have to produce something, when you - I don't know if it was cobalt, or whatever material they took out - that you have to do a level of production. It may not be the full-level in country... If more and more countries say that, you will, you will get things turning. A perfect example is DRC; everyone says, ooh, DRC, but there's a lot of companies working in DRC, and they're there because they're extracting minerals. And we have to, where it makes sense, we have to not just make ourselves an extractive continent that buys back the finished goods at extraordinary prices.
MLI'm nervous about local content rules, if I'm honest, because the risk is that it ends up just driving up the costs of whatever it is, because it's not the naturally best place to manufacture. So, the emphasis in my view needs to be on, what does it take to make these countries the best place to move up the value chain and do some refining, some manufacturing and so on? Rather than a sort of blunt instrument of a local content rule. And I know from other industries, that very often that just ends up being a kind of tax on the goods, because you almost have to buy it out, even though it's higher cost, because that's the rule but you'd rather not, which doesn't actually serve the purpose.
DOI don't know, I'm in two ways: I don't see anything wrong in local content, if it makes sense, and at a certain point, it might be more expensive to get your market supply, I think you've seen that with lots of projects you've done in Europe and stuff; you haven't done projects, necessarily, that were cost-effective, look at offshore wind, you know? But you knew you would get to a point, right? So, you invested a lot at the beginning, right? And it did have that. I think when it comes to Africa, everyone says, ooh, local content, but if you look at the rules in a lot of countries, you know... Even the whole way the EU works, it is local content to the extreme. I feel like these rules now that we have, and saying that, you know, free-for-all is not working. So, something must work, right? And again, I'm not saying that every country to say don't-do-this-if-that, but there needs to be something where you actually appreciate what's happening in the countries; at least if you're bringing the batteries back, bring it back with the same tax-free element of it. But one of your points is valid: it can't work in every single country; size does matter, manufacturing capacity does matter, access does matter. And these are all the different things that we've looked at. So, I will send you our report, highlighting each country, and where they are, because there's - I don't want to call it a grading system - but ones that are a lot more advanced than others, countries like Egypt or Morocco.
MLAnd, by the way, just to be clear, my critique of local content was not about Africa or developing countries. When I see the efforts that are going into manufacturing, certainly solar in Europe; the real question is, why is Europe not a great place to make solar? Why did, frankly, flat-screen TVs or iPads, why did all that go to China and Southeast Asia, or to Asian countries, not just Southeast Asia, but to Asian countries? And we really need to understand why that is. Because at the end of the day, very often they're using European or American equipment, and global capital, and there's no labour involved anymore, these are highly-automated plants. So, what is it? And until we really understand and address that, it ends up just being... it just pushes up the cost. And I'm worried about, European, giga-factories for batteries. I don't know how many plans there are, sort of 30 or 40 giga-factories. And if they just make expensive batteries, it actually ends up harming Europeans and not helping them. So, you've obviously hit on a sort of favourite topic of mine.
DO No, that's great. But Europe always has a way of subsidizing everything to work for their benefit, but no, no, you're right.
MLYes, but they sacrifice innovation and growth-rate, and therefore well-being. You have these countries that have had no economic growth for... You look at Italy. So, there is a cost to that, that's the only point I would make. But let's move on, because I think that you also make an interesting point, which is about intra-continental trade in Africa, which is sort of invisible to a lot of people in the developed world, we don't really think about it. We had a fantastic episode, Episode 120, with Anna Hajduka, who's building a business Africa GreenCo, which is about providing guarantees for new renewable energy projects. But it is enabled by the fact that there are now emerging regional grids. So, there's Sub-Saharan Africa, the Southern Africa Electricity Network modelled on actually the Scandinavian network, so you can actually start to trade electricity much more liquidly between countries, and I was very struck by that. I don't know whether that's something you've helped to push for, or whether that influences some of the programs that you run?
DOWell, I did work on the West African Power Pool, and there's also now an East African Power Pool as well. And I think these grids are very, very important, especially in the intermittency of renewables anyway. I feel like a lot more investment is needed, and for the West African region, it's really [inaudible], that's also driving all the different countries to work on them. For me, the infrastructure is always something that no one really talks about. We talk about the generation, and the last mile, but the transmission, the distribution, the metering is really, really critical, and that's where the real work is. And that's where typically people don't want to invest in because it's on the ground, and you just can't take it away if something goes wrong. So, making utilities work - because utilities really have to work for power pools to work - transmission networks work, transmission network operators, market operators, understanding what pricing really goes in, even if you're going to subsidize the market is really, really important. So, I feel like there's that commercial element throughout countries which is hard to get buy-in, because politics and everything comes in, but it definitely, power pools are really the future and should be embraced, if done properly. But you know, while we're doing those, we can't forget connection to the last mile, and we can't forget, some people have to be connected to a grid, they can't always be decentralized.
MLIt's a point that I definitely wanted to highlight in this conversation, because we started with clean cooking, and these sort of rooftops, and micro-grids, and I want to make sure that the audience is not left thinking that all of Sustainable Energy for All is all about that kind of rural stuff, where people can't or don't, or never will have connection to the grid. The grid connection piece, and then how we balance that and trade power and the power pools - East, West, Southern Africa, and indeed, connections from Northern Africa or the Mediterranean rim into Europe - are going to be absolutely critical as well.
DOAbsolutely, and we have to understand that you're working with a continent that in most places hasn't had an industrial revolution, and they want to, and that will need a considerable amount of energy. So, it's not just small projects. And you know, it's not just... energy poverty isn't just last mile; it's energy poverty to really grow businesses, and that's why you need a lot more energy, sustainable energy. And I would say the infrastructure and the commercial structures, so you don't just say, okay, the utility doesn't work, that's okay. We've got lots of utilities that don't work in the developed world, but the structures are in place to at least make it seem like it's working, and to make a pathway if you want to connect new energy. And on that point, I think it's important that even when we do mini-grids, especially from my experience, the design that we came up with, especially in Nigeria, was you come up with a design that allows for a connection to the grid when the grid gets there. So, it's not just doing these things in isolation, thinking the grid will never get there. And then you strike a deal between the mini-grid developer and the grid, because that distribution infrastructure has been built-out. So, it is very, very important. Because people don't have something doesn't mean they just have a minimum level, like just, you know, a few lighting points and a charging thing is okay; that isn't okay. We are really trying to push for 1000 kilowatt-hour minimum. We feel like that is what is needed to really, really live a dignified life.
MLYeah, future proofing these developments so that they can later be connected, and ideally, so that they can still later be islanded again, so if there is a power cut, you can still go back to using your mini-grid, that would be the best of all worlds. I want to just come on to a final topic, if we might, which is you've talked about Africa wants to have an industrial revolution, and that the people have every right to the 1000 kilowatt hours per year. And they have the right to, or the expectation of reliable power, not just power when it's windy, and when it's sunny, but also power throughout. And we all know, from what we're learning in the developed world, that batteries will get you a certain distance; if you've got very limited power requirements, then you can put a battery with solar, and that's fine, that will work. But if you really want 24/7, power quality like they have in Germany, or in Northern Europe, or in the US or Japan, South Korea and so on, then you've got to do something to keep the lights on for fairly extended periods, where it's not sunny and not windy; I mean, more than a day, more than two days, that's the reality that the resources can drop away. Where I'm going with this, as you know, is: is it okay to rely on gas and to develop gas projects, which is the technology of choice in the developed world, to keep the lights on in those situations? Is that okay for the countries you work with to go down the exact same route?
DOSo first, the countries might not have gas. So, it's very different. I mean, this conversation has been going on really intensely for the last three years, right? What fuel source should be used, what should be used for baseload? What should be used for industry? And I have been trying very hard, especially over the last year, to change the conversation. The conversation shouldn't just be about the fuel source. First. I disagree that you should tell any sovereign what they need to do. I think you need to advise them, and then whatever the sovereign wants to do is a sovereign choice, but you can provide advice. I think the conversation needs to be the one we were having prior, about what does it take to fund the energy transition? And that's not just the generation part: that is the distribution, the network, the policies, the Forex policies, everything you need to put in place. The energy transition that we're asking these countries to do is a transition of their entire economy. What happens to their transport sector? What happens to their oil and gas sector? What happens to their building sector? What how do they deal with clean cooking? How do they deal with agriculture, which seems to be one of the largest-emitting industries now? The fuel source doesn't allow to have those conversations. So, on one note, I can only advise what people want to develop, but I don't think there should be just this or nothing; there needs to be a full range of options for people to be able to choose from, because it actually is a transition? We have to understand that at the heart of everything, we do have to get to a point of net-zero. We do know that this is affecting the climate crisis. So, the cleaner, more sustainable we do it... Everything we need to do has to be on a pathway. And I guess, for me, the stuff that's more scary is: how is it going to be funded? You know, those are the conversations we should be having, not how is what [inaudible].... Just agree to fund the transition, right? You know, what I mean? Just agree to the cost of funding the transition. And the numbers are really, really big. They are huge, not just for coal-dependent regions, or things like that, high population regions. Once you agree that, the pathway of how you get it I feel is the much easier place; you just need to make sure that the entire energy transition, and not just the generation and fuel source, is at the top of mind.
MLIt's a great answer, but I if I could just push a little bit because... I had Alain Ebobissé, who's the CEO of Africa50, infrastructure investor, and, his point was... Okay, so you have your plan for the transition, and Nigeria 2060, I think that's a fantastic, and it's the correct goal, to get to net-zero by 2060. What it doesn't say is what you should do in 2030, 2040. It says that by 2050...
DOIt does. It says what you have to do year on year.
MLWell, but it doesn't say how you keep the lights on and provide 24/7 reliable power for the next few decades.
DOIt absolutely does. It actually even shows when you have to peak in using some of these fuel sources, and when you have to ramp down again. So, it's a realistic model. It literally says year on year, what needs to be developed, what baseload is needed, what are the fuel sources that are needed there till a certain point, right, and then going back down again. So, that's why I'm like funding the entire...
MLOkay, so agreed. So there's, there'll be first investment in one portfolio, and then it has to peak and go back down again. Now, some of that investment is going to go into - you call it baseload, I actually prefer peaking or flexibility, because baseload gets us into a whole discussion about whether it runs 24/7 or just intermittently... But Alain's point was, that some of that investment, realistically, needs to go into gas. And what you have is a bunch of developed country investors and multilaterals that say, well, we understand the transition, we understand that arc that says, first we push for energy access, universal, reliable, etc., and then we make sure it's cleaner and cleaner until the point where it's net-zero. But the developed country financial institutions, and the multilaterals don't want to fund the fossil piece. So, they all want to pick out the plums of the nice wind farm and the solar and the micro-grid, even if they do the transmission, etc. But his plea - and this was actually before COP 26 - his plea was, please don't forbid, essentially developed country and multilateral investors from investing in gas in Africa, which is needed for the next few decades to keep the lights on.
DOI disagree with the fact that they're funding anything... That's what I'm trying to get to. We're not having the same conversation. They're not funding anything. Fund something, you know? If you bring 100 billion to the continent for renewables, we will do renewables, right? Just bring money; they're not funding anything. When you come and say you won't even fund - it has to have a perfect PPA with a sovereign guarantee and every anything in place, and it's taking years.... So, that's my issue, right? That's why I say you have to fund the transition - fund any part of it, but fund something. They are not funding. Very, very select projects that don't have the impact that we're talking about. I work for Sustainable Energy for All: it would take me years before I get 100 million for renewables, the same renewables we're trying to push, right? For the same micro-grids we're trying to push, you know? So, the funding situation is much larger than that. Choose something you want to fund, and let's talk about it. What is happening is you're using a conversation of no fossil / fossil to fund nothing. And that's why I want to get out of it. Like, if you're saying that, okay, we don't want to fund any fossil, perfect, no problem. But can you bring a few billion to fund something else, no one's going to have a problem with it. What you're saying is that don't fund something, and we're not going to fund, we don't have anything on the table. And that is the honest truth, and we have to be honest with ourselves, we really do. Because everyone goes, oh, there's so much money for renewables. No, there's not. There's not. There's not so much money around the continent for clean energy. Barely four countries can get funding for that, out of over 50. That's a fact.
MLWhat is your message then to activists? I also had Bill McKibben on Cleaning Up, and their number one priority is to block fossils; they're not out on the street saying fund something, fund something, hopefully it's clean. What they're saying is, don't do the Mozambique pipeline, because it's a post-colonial construct and so on. That's what's getting Bill McKibben out onto the street and getting arrested. And he's saying that the young activists in Africa are totally on that agenda, and they are also protesting not to have fossil. But what would you say to people whose number one agenda is don't have fossil, rather than as you've said, fund something?
DOLike, for me, I don't like preaching to anybody. But the number one agenda must be to get people out of energy poverty; you must look at the landscape and say, I want to get someone out of poverty. Where's the money to get someone out of poverty? Where's the money to reduce the infant mortality rate? Where's the money for women not to be dying because they're using clean cooking? Let's put it back to people, right? People centred energy transition. That still gets us to a place of net-zero, but we can't keep having these debates that don't get to the crux of it. And the crux of it is, if you look at the money that's going in to Africa, 1.5% of all renewable investment? It's absurd, it is embarrassing. So, while you're having whatever fights you're having, at least fight or more to be coming in. And we will know how to utilize that. But right now, nothing is happening. And we need to really be honest with it.
MLI completely agree with you; I push you because I want to try and get more people to have clarity on exactly this issue. But I agree completely with you. If you have time for just one other comment: what are you doing on the international stage to get that money? So, we've got COP28 coming up at the end of this year in the Emirates in Dubai? Is that a big deal? Or are you doing other things to try and get this large-scale financing, so it's no longer embarrassing, as you say?
DOWell, obviously, we start with UNGA, putting it on the agenda of the SG; this is something the SG and the Deputy Secretary General are very, very passionate about, how do we fund? How do we come up with another kind of innovative instrument; is it debt-for-climate swaps, what are we going to actually do? And this is part of a crisis response group that I'm in at the UN side. So, we're gonna continue pushing that. COP28 is extremely important, UAE is extremely important, because they've made it very clear that Africa is an important voice for them, right? And funding Africa, making sure Africa energy really progresses through development. Like you talk, power grids, things that really bring GDP out, and really get people to develop. So, I'm really excited about working with them. We're currently working with them on a number of things. But more importantly, just you know, it's important when you're having these conversations just to have Africans in the conversation, right? I don't represent all of Africa, I represent the United Nations. But bring the Africans into the conversation. They are the ones who know what is best for them, instead of this assumption that everybody else knows what's best for them. I don't do that. I don't go to a Ghana or a Kenya and say, this is what you should do. I listen to what their priorities are, and fit their priorities into our climate targets - not the other way around. I think it's really important that we listen and learn and don't just have these pre-conceived notions on how people should develop.
MLI couldn't agree more. Thank you so much for spending time with us here today. And I'd like to check back in, perhaps next year, after the UNGA, after COP28, and when you've had a bit of time to absorb the results of those, and let's see whether we have moved this incredibly important agenda forwards.
DOOf course, Michael, I'll look forward to being challenged again by you.
MLMy pleasure. Thank you so much. Bye, bye.