Energy price modeling in sub-Saharan Africa: a systematic literature review

Abstract

Researchers have found that despite a wide range of renewable energy sources in sub-Saharan Africa (SSA), renewable energy pricing policies have focused extensively on metered electricity energy, an early source of renewable energy. Supply, access, and regulation of price for metered electricity energy is mostly controlled by the governments across SSA. There is an increasing use of other renewable energy sources including portable electricity, solar power, and wind power. However, in SSA, the pricing for domestic renewable domestic renewable power such as portable electricity, rechargeable cookstoves, and portable solar power sources are left to the market to legislate, with energy prices dependent on forces of demand and supply and seldom on clear scientific models. This commercially focused energy market means businesses operating in the energy industry are more interested in profits and set prices relative to their market perceptions. The main problem with the energy market in SSA is the lack of a participatory approach where customers, businesses, the government, and other stakeholders are involved in the pricing for energy. We further note that lack of a participatory approach in energy pricing is a major challenge in uptake and demand for the domestic renewable energy sources. Through a systematic literature review, including a review of peer-reviewed journals, documents from energy utility companies, and published information on the websites for energy companies, this review analyzes the current application of energy price modeling and hypothesizes that mobile technology and a participatory pricing approach can improve pricing for domestic renewable power. Our initial literature review showed that energy price modeling had received little attention in SSA, especially for domestic renewable power energy sources. This paper, therefore, fills this gap by using a systematic literature review to consolidate knowledge on how energy price modeling has been applied in the SSA context. The systematic literature review results reveal four commonly used models: time series, artificial neural network, hybrid iterative reactive adaptive, and hybrid models. These energy pricing models are mainly applied to metered electricity power, the predominant source of energy in SSA. The literature hypothesizes that applying mobile technology to energy pricing and a participatory approach involving the consumers and energy supply businesses can move SSA closer to transitioning to renewable energy. Although other factors have hindered this transition, a participatory energy pricing approach incorporating relevant pricing models and market information creates potential solutions to these challenges. In the discussion, we hypothesize that a participatory approach to price modeling with the incorporation of mobile technology can be used at the household level to improve energy decision-making. For this to work, energy price modeling for domestic renewable sources should be simplified, user-friendly, and accessible to households. In conclusion, we recommend that SSA governments develop a more holistic view of energy price modeling to better harness the potential for domestic renewable energy sources.