Cape Verde’s goal is 100% renewable energy by 2025

Erik Nordman, Grand Valley State University

Cape Verde, the small island archipelago nation off Africa’s northwest coast, has set itself a very bold renewable energy target. As part of its “sustainable energy for all” agenda, it has pledged to obtain 100% of its electricity from renewable resources by 2025.

Cape Verde is made up of 10 islands, nine of which are inhabited, that lie about 600km west of Senegal. Almost all of the islands’ 550,000 residents have access to electricity, but about one-third still rely on firewood and charcoal for cooking. Cape Verde’s per capita electricity consumption of 727 kWh per person per year is substantially higher than the sub-Saharan Africa average of 488 kWh per person per year. But electricity prices are high. They range from US$0.26 – 0.32 in recent years compared, for example, to an average of US$0.13 for residential homes in the US.

Cape Verde renewable energy Cabo Verde

Cape Verde’s renewable energy resources account for about 25% of total energy production.
Shutterstock

 

Although most of its electricity is produced by generators, which run on imported petroleum products, Cape Verde has started to diversify its energy portfolio. A quarter is now provided by renewable sources. This is good news because there are estimates that, between 2015 and 2020, Cape Verde will almost double its annual electricity consumption to 670 GWh, up from 360 GWh.

With cutting-edge technologies and innovative business practices, Cape Verde can achieve its 100% renewable energy goal in a way that is cost-effective and equitable. One research team suggested that a system based on solar, wind and energy storage (as batteries and pumped hydropower) could meet Cape Verde’s goals. It certainly has a wide range of options for increasing its share of renewable energy to achieve this.

Some countries obtain almost all of their electricity from renewable sources, but these have substantial hydroelectric resources. Cape Verde, lacking large hydropower resources, would be unique in achieving 100% renewable energy with a diverse resource mix.

Resource variety

Like its mainland African neighbours, Cape Verde has a variety of resources and technologies to choose from. It has wind resources like Morocco, the solar potential of the Sahel, geothermal resources like Kenya, and marine energy comparable to many coastal countries.

Cape Verde’s northeasterly trade winds are considered excellent for wind power production. A wind farm typically requires wind speeds of at least 6.4 m/s at 50m above ground. Cape Verde’s average annual wind speeds exceed 9.0 m/s at the wind farm. Already three of the islands, including the two most populated, produce about 25% of their electricity from wind turbines. But without energy storage there is little opportunity to expand wind energy on these islands.

Another technology that could be integrated into the electricity generation offering is the country’s desalination systems. Many of Cape Verde’s communities depend partially, or entirely, on these for drinking water. Desalination systems require electricity and can be run at times when the wind turbines are operating, but electricity demand is low – such as at night.

Additionally, the desalinated freshwater can be pumped into a high-elevation reservoir and used for energy. When demand peaks the water flows back down, spinning hydro turbines and generating electricity in the process. Integrating desalination and energy systems like this could be highly beneficial. For example, on the island of São Vicente it could enable wind turbines to meet up to 84% of the island’s electricity demand.

Like many African countries, Cape Verde’s tropical location has good potential for solar photovoltaic (PV) electricity. One study suggests that the solar PV capacity potential is more than double the currently installed electrical generating capacity. Most of the potential development is on the densely populated island of Santiago. The challenge, as with wind, is integrating irregular flows into the grid.

Cape Verde could also take advantage of an emerging technology called ocean thermal energy conversion. This uses the difference between warm surface water and cold, deep ocean water to produce electricity. It works best in equatorial latitudes where there is a large difference in temperature between surface water and deep water. Assessments show that the ocean waters around the southernmost tip of Santiago might be suitable for it.

In addition, as a volcanic archipelago Cape Verde has potential for geothermal energy – which uses heat from the earth. Both geothermal and ocean thermal energy conversion electricity generation have the advantage of running all the time. This provides baseload power, meeting the minimum level of power demand all day.

Energy technologies

When it comes to distributing and paying for energy, systems also need a re-think.

Although the centralised grid model of electricity has been effective, technological advancements are making community-based “micro-grids” increasingly attractive. At least three communities in Cape Verde are already using a solar and wind-based micro-grid.

A microgrid is a local electricity grid. It includes electricity generation, distribution to customers, and, in some cases, energy storage. It’s beneficial because solar- or wind-based microgrids are cleaner than diesel-based systems and have lower life cycle costs. Microgrids are also often connected to the main electricity grid but can disconnect and operate independently, for example, when a storm damages the main grid.

“Pay-as-you-go” energy systems have also revolutionised the delivery of electricity services in Africa. They integrate energy technologies, mobile communications and mobile banking. This allows households to purchase “solar home systems” and pay the cost over time. Kenya and Tanzania have emerged as leaders in this sector and are home to companies such as M-KOPA, Mobisol, and Off-Grid Electric. Pay-as-you-go systems could enable Cape Verde to reach its renewable energy goals without the large capital investments of centralised systems.

Cape Verde has already had tremendous success in integrating wind and solar into its energy system. By adopting cutting-edge technologies and innovative business practices, Cape Verde can achieve its 100% renewable energy goal in a way that is cost-effective and equitable.

The ConversationThe following research assistants contributed to this project: Abigail Barrenger, Jessica Crawford, Jacob McLaughlin, and Chad Wilcox. Dr Anildo Costa provided technical assistance and insights into Cape Verde’s energy system.

Erik Nordman, Associate Professor, Grand Valley State University

This article was originally published on The Conversation. Read the original article.

Press Release: Secretary Tillerson Meets With African Foreign Ministers

This media note on the ministerial meeting with representatives of 37 African countries was distributed by the U.S. Department of State on November 22, 2017.

Secretary of State Rex Tillerson met with delegations from 37 countries and the African Union Commission, in addition to representatives from the U.S. and African private sectors and civil society on November 17 to address our cooperation in increasing trade and investment, promoting good governance, and countering violent extremism on the African continent.

Rex Tillerson African ministerialDuring the opening session on increasing trade and investment Secretary Tillerson underscored the vast opportunities for expanding U.S. commercial ties with Africa to support mutual prosperity. USAID Administrator Mark Green highlighted U.S. efforts to foster private-sector-led growth that is increasingly central to supporting economic development in Africa. African Foreign Ministers welcomed the renewed attention on trade and investment and called for greater effort to spur investment in infrastructure and manufacturing industries in Africa.

In the second discussion the Secretary reinforced that governments that uphold core democratic principles and practices to create societies that are safer, healthier, more secure, more prosperous, more likely to lead to economic growth, and more inclined to respect the human rights of their citizens. African partners discussed the importance of democracy in Africa being unique to the cultural context of the continent and its individual countries, while still respecting the fundamentals of good governance, individual respect for human rights, and the rule of law.

The final session on countering violent extremism provided African Foreign Ministers an opportunity to discuss best practices and lessons learned from their countries’ respective experiences in countering radicalization to violence, supporting cross-border cooperation, and protecting soft targets. They expressed gratitude for U.S. support for their counterterrorism efforts, and there was a frank discussion on American support for the G-5 Sahel Joint Force and the Multinational Joint Task Force. African partners also stressed the importance of using comprehensive approaches to counter terrorism and prevent the spread of violent extremism that complement security sector professionalization, with particular focus on addressing the economic, governance, and social vulnerabilities exploited by terrorist organizations for recruitment.

Low-Cost Private Schools Are Changing the Developing World

by James Tooley

In the world of international development, Liberia has recently gotten attention for contracting out management of some public schools to the private sector. The Financial Times and The Economist have covered this story. That is partly due to the fact that the large American company involved, Bridge International Academies, is funded by, among others, Mark Zuckerberg and Bill Gates. Predictably, Liberia’s policy has aroused the ire of international teacher unions and NGOs.

This focus on Bridge is a shame. Something else is happening in Liberia – and other war-affected countries – which is much more noteworthy. I have been to Liberia and Sierra Leone, countries recently torn by civil war, as well as South Sudan, still in the throes of bloody conflict. Journeying into the slums, I quickly found what I’ve found in every other developing country: low-cost private school, after low-cost private school. Experts I’d spoken to before my visit told me I might find a small number of church or NGO schools, but nothing else. In fact, I found huge numbers of schools run by proprietors – “for-profit” low-cost schools.

The Necessity of Private Education

Children in the low-cost private schools outperformed those in government schools, and private schools provide better quality for a fraction of the cost.

Liberia map private schoolsIn Liberia I researched seven major slums, some with expressive names: you can guess why the slum “Chicken Soup Factory” is so called, although you’d be wrong about “Red Light”, which is named after Monrovia’s functioning traffic light. In these slums, I found 430 private schools, serving 100,000 children. Sixty-one percent of the schools were “for profit”, run by men and women entrepreneurs as small businesses, to provide better education than was available elsewhere. Going door to door for a household survey in the largest slum revealed 71 percent of children in private schools, and only 8 percent in government schools (the remaining 21 percent were out of school).

Children in the low-cost private schools outperformed those in government schools, and private schools provide better quality for a fraction of the cost.  The cost to parents of sending a child to private school turned out to be not much more than sending to a supposedly “free” government school, as any school – public or private – requires extra costs such as shoes, uniform, books and transport, and these tended to dwarf the cost of school fees.

What’s not to like? Development experts concede that such schools might be tolerated as a “necessary evil”. But only temporarily. They argue that every effort should be made to “normalize” education, to ensure government education ministries fulfill their proper roles of regulating, funding and providing state education for all. The only twist in that story is Liberia’s bold attempt to bring in international operators to manage some state schools. Given that there are so many existing low-cost private schools in Liberia, run by local entrepreneurs, maybe it would have been better to have harnessed their energies, perhaps by providing parents with vouchers to use in private schools of their choice, than to bring in controversial outsiders?

State Controlled Education Was Always the Problem

In any case, there’s a huge elephant in the room. It is well documented that one of the primary causes of civil war in each of these countries was government control of education. In Liberia, witness after witness to the Truth & Reconciliation Committee, established to soothe the tribulations of war, spoke of government using education as a tool of oppression. In Sierra Leone, those in power favored their own peoples educationally at the expense of others. One of the major reasons for the breakaway of South Sudan was enforced Islamisation of schooling, as well as severe educational inequalities perpetuated against the people of the south.

Let education in conflict-affected states be as far as possible left to the private sector.

Surprisingly, this is accepted by development experts. They don’t see any contradiction between acknowledging this and promoting as the only way forward a return to full government control of education. There will be the “right kind” of government education this time, they claim.

But my research suggests an alternative approach that goes with the grain of what poor parents are choosing. In conflict-affected countries, low-cost private schools should be celebrated as major contributors to providing high-quality educational opportunities for all. Let education in conflict-affected states be as far as possible left to the private sector. This will reduce the temptation for governments to use education for political purposes, reduce corruption, and lead to higher standards and better value-for-money to boot.

Once one is going down this road, it may have implications for ideas on the role of government in education elsewhere.  Why not extend the same argument to Nigeria or India, where there’s also a burgeoning low-cost private sector, which outperforms government education at a fraction of the cost? And even – now here’s a thought – to the UK too.

In developing countries, one reason parents prefer low-cost private education is because of the parlous state of government education; state schools in England & Wales or Scotland aren’t as bad as all that. But my current research suggests that it may be better for a nation, for its democracy and its people, if education is outside of the state altogether.

I’m not convinced that this principle of independence applies only to war-torn nations, so I’m exploring the possibility of creating a chain of low-cost private schools here too. My inspiration is the extraordinary endeavors of educational entrepreneurs, battling against odds that others would find daunting, who have succeeded in providing quality education in the most difficult places on earth.

Reprinted by CapX

James Tooley is professor of education policy at the University of Newcastle, director of the E. G.West Centre, and coauthor of “Private Education Is Good for the Poor: A Study of Private Schools Serving the Poor in Low-Income Countries” (Cato Institute).

This article was originally published on FEE.org. Read the original article.

Learning from South Africa’s Failed Experiment in High Taxes

by Daniel J. Mitchell

Since there’s a big debate about whether there should be tax cuts and tax reform in the United States, let’s see what we can learn from abroad.

And let’s focus specifically on whether changes in tax policy actually produce “revenue feedback” because of the Laffer Curve.

In other words, if tax rates change, does that incentivize people to alter how much they work, save, and invest, thus changing the amount of taxable income they earn and report?

I’ve written about how the Laffer Curve has impacted revenue in nations such as FranceRussiaIrelandCanada, and the United Kingdom.

Now let’s go to Africa. In a column for BizNis Africa, Kyle Mandy of PwC explicitly warns that South Africa is at the wrong spot on the Laffer Curve.

At the time of the 2017 Budget in February, a number of commentators, including myself, warned National Treasury and Parliament that the tax increases announced in the Budget, particularly on personal income tax, would likely push tax revenues very close to the top of the Laffer curve, i.e. the point at which tax revenues are maximised and beyond which tax rate increases will actually result in a decrease in tax revenues.

Before continuing with the article, I can’t resist making an important point. The author understands that it is a bad idea to be on the downward-sloping part of the Laffer Curve. As he points out, that’s when tax rates are so punitive that “tax rate increases will actually result in a decrease in tax revenues.”

That’s correct, of course, but it’s almost as important to understand that it’s also a very bad idea to be at the “top of the Laffer Curve.” As noted in a study by economists from the Federal Reserve and the University of Chicago, that’s the point where economic damage is so great that a dollar of tax revenue can be associated with $20 of damage to the private sector.

Now that I got that off my chest, let’s look at some of the details in the article about South Africa.

The evidence…suggests that, in the current environment, South Africa has maximised the tax revenues that it can extract from its citizens and has possibly even gone past that point and is now on the downward slope of the curve. Why do I say this? The last few years have seen significant tax increases… These tax increases saw the main budget tax: GDP ratio increase from 24.5% in 2012/13 to 26% in 2015/16, primarily led by increases in personal income tax. However, since then the tax:GDP ratio has stalled at 26% in both 2016/17 and in the revised forecast for 2017/18. It is not unreasonable to expect that the tax:GDP ratio for 2017/18 may fall below 26% in the final outcome. The stalling of the tax:GDP ratio comes despite significant tax increases in each of 2016/17 and 2017/18 which were expected to deliver ZAR18 billion and ZAR28 billion of additional tax revenues respectively.

Once again, I can’t resist the temptation to interject. That final sentence should be changed to read “the stalling of the tax:GDP ratio comes because of significant tax increases.”

Mr. Mandy concludes his column by warning that the current approach is leading to bad results and noting that further tax hikes would make a bad situation even worse.

…the South African Revenue Service has acknowledged that it has seen a decline in levels of compliance. …So what does all of this mean for tax policy and fiscal policy generally? Simply put, National Treasury have been placed in an invidious position. Increasing taxes further in the current environment could be self-defeating and result in a decline in the tax:GDP ratio. This risk is particularly prevalent insofar as further tax increases in the form of personal income tax are concerned. Increasing the corporate tax rate would further dent investor confidence and economic growth.

The good news is that even South Africa’s government seems to realize there is a problem.

Here are some excerpts from a recent story.

Finance minister Malusi Gigaba has received President Jacob Zuma’s stamp of approval for an inquiry into tax administration and governance at the South African Revenue Service (Sars). According to the Medium-Term Budget Policy Statement (MTBPS), tax revenue is expected to fall almost R51 billion short of earlier estimates in the current fiscal year …The probe also comes amid warnings that further tax hikes could be futile and may even result in a decline in the country’s tax-to-GDP ratio. …National Treasury has introduced various tax hikes over the past few years. The main budget tax-to-GDP ratio increased from 24.5% in 2012/13 to 26% in 2015/16, mainly as a result of higher effective personal income tax rates. But the tax-to-GDP ratio has subsequently stalled at 26% in 2016/17 and in the latest 2017/18 forecast and it is not inconceivable that the final outcome for the current fiscal year could fall below 26%… Gigaba seems to be aware of the dangers of additional tax hikes and warned in his MTBPS that it could be “counterproductive”.

I’m glad that there’s a recognition that higher taxes would backfire, but that’s not going to fix any problems.

The pressure for higher taxes will be relentless unless the South African government begins to control spending. The government should adopt a constitutional spending cap, which would alleviate budget pressures and create some “fiscal space” for lower tax rates.

But I’m not confident that will happen, particularly if the International Monetary Fund gets involved. Desmond Lachman, formerly of the IMF and now with the American Enterprise Institute, writes that the country is in trouble.

South Africa is in trouble. Per capita income has been in decline for several years and its economy is in recession for the second time in eight years. Unemployment remains at over 27%. Meanwhile, the rand is floundering on the foreign exchange market… In view of the favourable global economic environment, the country’s predicament is even more troubling. Interest rates have rarely been lower and capital flows to emerging markets have seldom been stronger. …If South Africa’s economy is performing poorly in this environment, it will probably struggle even more when central banks start to normalise their interest rate policies and when the global economic environment becomes more challenging.

He has the right description of the problem, but I’m worried about his proposed solution.

IMF assistance can hasten restoration of confidence. …An IMF programme would not be popular politically within South Africa but the government does not appear to have any realistic alternative.

Simply stated, the IMF has a very bad track record of pushing for higher taxes.

That doesn’t necessarily mean its bureaucrats will push for bad policy in South Africa, but past performance sometimes is a good predictor of future behavior.

For what it’s worth, the IMF is fully aware that the burden of government has been increasing. Here’s a blurb from the most recent Article IV report on South Africa.

During the past few years, the share of both revenues and expenditures continued its rising trend. The size of general government in South Africa is one of the highest among international peers at a similar level of development. Primary expenditures rose by 1.5 percentage points of GDP between 2012/13 and 2015/16, owing primarily to public enterprise-related transfers (0.8 percent of GDP, including a 0.6 percent of GDP equity injection for Eskom in 2015/2016) as well as relatively generous wage agreements combined with an increase in consolidated government employment (0.3 percent of GDP). In recent years, including the 2017 budget, higher personal income taxation has been the main tax policy instrument to collect revenue combined with higher excise rates.

And here’s a section of the data table showing the expanding burden of both taxes and spending.

Unfortunately, the IMF never says that this growing fiscal burden is a problem. Instead, the focus is solely on the fact that spending is higher than revenue. In other words, the IMF mistakenly fixates on the symptom of red ink instead of addressing the real problem of excessive government.

So if the bureaucrats do an intervention, it almost certainly will result in bailout money for South Africa’s politicians in exchange for a “balanced” package of spending cuts and tax increases.

But the spending cuts likely will be either phony (reductions in planned increases, just like they do it in Washington) or will quickly evaporate. But the higher taxes will be real and permanent. Just like in most other nations where the IMF has intervened. Lather, rinse, repeat.

Speaking of misguided international bureaucracies, the Organization for Economic Cooperation and Development already has been pushing bad policy on South Africa. The bureaucrats even brag about their impact, as you can see from this Table in the OECD’s recent Economic Survey on South Africa.

The OECD is happy that income tax rates have increased and that there’s more double taxation on dividends, but the bureaucrats are still hoping for a new energy tax, expansion of the value-added tax, and more property taxes.

They must really hate the people of South Africa. No wonder the OECD is known as the world’s worst international bureaucracy.

I’ll close by noting that the country’s problems are not limited to fiscal policy. The country is only ranked #95 by Economic Freedom of the World. And it was as high as #46 in 2000.

Instead of pushing for higher taxes, that’s the problem the OECD and IMF should be trying to fix. But given their track record, that’s about as likely as me playing centerfield next year for the Yankees.

Reprinted from International Liberty

Daniel J. Mitchell South Africa taxes

Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

This article was originally published on FEE.org. Read the original article.

Rex Tillerson Statement on Robert Mugabe’s Resignation

This statement on events in Zimbabwe was issued on Tuesday, November 21, 2017, by the U.S. Department of State, attributed to Secretary of State Rex Tillerson:

Secretary of State Rex Tillerson official portrait ZimbabweWith the resignation of Robert Mugabe, today marks an historic moment for Zimbabwe. We congratulate all Zimbabweans who raised their voices and stated peacefully and clearly that the time for change was overdue. Zimbabwe has an extraordinary opportunity to set itself on a new path.

The United States strongly supports a peaceful, democratic, and prosperous Zimbabwe. As events unfold, we continue to call on all parties to exercise restraint and respect constitutional and civilian order.

We urge Zimbabwe’s leaders to implement much-needed political and economic reforms for a more stable and promising future for the Zimbabwean people. We will continue to support the people of Zimbabwe as these reforms move forward.

Whatever short-term arrangements the government may establish, the path forward must lead to free and fair elections. The people of Zimbabwe must choose their own leaders.