Power grids

Abstract

This chapter shows that the electricity mix in Africa and Latin America is highly varied but is typically tied directly to endogenous resources controlled by individual nations. While much of the electricity is generated using antiquated fossil fuel technology, it should be recognized that Latin America is the most decarbonized region in the world because of the abundance of hydropower, a dispatchable source of renewable energy. Non-dispatchable renewable energy (i.e., wind and solar) is prevalent in only a few selected nations. Sub-Saharan Africa contains one of the least electrified regions in the world with an overall electrification rate below 50% and with 17 nations that have electrification rates less than 20%. This contrasts significantly with North Africa and the majority of urban Latin America (Haiti is an exception), where more than 99% of the urban population has access to electricity. Electricity consumption in both regions remain well under the global average (21 and 60% of the world electricity output per capita, respectively), and rural electrification remains challenging for both regions. On the other hand, electric grid reliability remains problematic in many nations where proper maintenance is limited, power theft is prevalent and power outages frequent, limiting the availability of power with the concomitant impact on local economies. Moreover, in many countries the traditional grid extension mode requires a multidimensional approach covering regulation, finance, economic development and social dimensions to analyze the business case of each rural electrification project. The additional costs of decentralized electricity supply is driven by the cost of alternative power generation, and it is related to scale and to variations in daily power demand. However, increasing electrification rates, grid extension, reliability and trading, and diminishing electricity price will raise regional GDP and living standards in these regions.