As an investor, you lookout for the next best thing, the newest start-up, or the upcoming product to take the world by storm. It might interest you to know that one of the next big things in the world right now in the energy sector.
To clarify, the renewable energy sector, and in the continent of great innovation, Africa. So, you might wonder, why should I invest in Africa’s renewable energy sector? Well, this article will give you not one (1) but ten (10) great reasons why investing in Africa’s renewable energy sector is a no brainer.
With a growing rate of 2.7% a year in Sub-Saharan Africa, estimations are that the population will double exponentially. Thus, by the end of the year 2021, the growth will be about 1 billion individuals to about 2.4 billion. The same can be said for the rest of the world’s population.
By the end of this century, the people on earth would reach about 16 billion inhabitants. This is way more than the world is designed to sustain. Researchers have deduced that the number of inhabitants’ earth should contain about 1.9 billion, which was surpassed almost a century ago.
At the rate at which these daunting figures are increasing, it is safe to say that the traditional energy sector can no longer produce nor provide ample energy for its citizens. This is why there is a need to utilise the natural renewable sources available around us more and more.
The potential of Solar, Hydro and Wind power cannot be overstated. It is, of course, not a task that can be carried out overnight, but the first step will be phasing out the use of fossil fuels.
While the phasing out occurs, there will also be the construction of wind turbines, hydro-electric dams and solar panels to replace them. These machines are capable of transforming natural resources into useable power.
WHY RENEWABLE ENERGY?
Renewable energy, also known as clean energy, is a source of energy that is derived from natural sources. These sources are constantly replenished within the same lifecycle as human beings. There are a myriad of advantages attached to the use of renewable energy, including but not limited to the following;
· Economic improvement
· Environmental rehaul
· Improved public health
It is a sector that is booming in recent years, and it is brimming with unlimited potential. To reduce and completely eradicate the use of fossil fuels, we at Shikana law group are at the forefront in pushing the narrative as religiously as possible.
At Shikana group, we’re international law firm that specialises in business and investment advisory while also offering legal services within and without the borders of East Africa, we understand that it might be a considerable risk, deciding to invest in a sector as novel and grand as the renewable energy sector, and in Africa no less. But with this in mind, the Shikana group has curated several reasons why making this smart investment is a no-brainer.
We look forward to seeing our customers take the giant step towards financial independence, and that is why these reasons below should spur you on to make the life-changing decision to invest in Africa’s renewable energy sector.
REASONS WHY YOU SHOULD INVEST IN AFRICA’S RENEWABLE ENERGY SECTOR
1. The transition protects the already dwindling non-renewable natural resources.
Investing in the renewable energy sector reduces the burden on the non-renewable options, such as coal and fossil fuels, Fuels the world has relied on for centuries. It is estimated that with the current rate at which fossil fuels are being used, then by the year2060, the world’s supply will be significantly depleted, and we would still have to turn towards renewable energy options. So why not start now?
2. It protects the ozone layer by reducing the emission of greenhouse gases.
It is common knowledge how much pollution the burning of fossil fuels has caused in the world. Not only are there physical and destructive waste products, but there is always the production of greenhouse gases such as CO2. These gases cause extended damage to the already diminished ozone layer. Without the ozone layer, the ultraviolet rays of the sun will not only cause damage to the lives of humans on earth but also to the plants on land and the plankton in the oceans, significantly damaging the earth’s ecosystem.
3. It reduces the effects of climate change and global warming on the planet.
The effects of climate change caused by global warming include;
· Rising sea levels due to the melting of ice glaciers, which disrupts aquatic life, leads to an increase in floods and can wreak havoc on communities.
· Increased heat waves and droughts caused by an increased intensity of solar radiation, which destroys plant life and adversely affects agriculture.
An investment in the renewable energy sector reduces all of the above-stated effects, thereby controlling the otherwise dangerous and unpredictable weather conditions.
4. Africa has an almost unending supply of natural resources.
Be it hydropower, solar power, geothermal power or even wind power, Africa has it all in abundance. Whether due to a stroke of luck with its location, or divine grace, whatever the reason, it is without a doubt that Africa enjoys excellent potential as it relates to renewable energy sources. With about ten terawatts of solar power, 350 gigawatts in an abundance of hydropower, 110gigawatts of wind power and about 15 gigawatts of geothermal power. What is great about this is that these resources are constantly growing and replenishing, as seen right in the name.
5. There will be a definite increase in job creation.
This sector requires an increase in the amount of labour utilised, unlike its counterpart. This increase in labour-intensive activities leads to increased job creation, as there will be more significant demand in the sector. With the expected expansion of the renewable energy sector, the number of jobs is expected to increase exponentially in both the renewable energy sector and its counterpart, the energy efficiency industry.
6. The cost of natural resources will remain constant, unlike the fluctuating prices of fossil fuels.
The price of fuel is affected by many factors, including;
· The decisions made by the organisation of petroleum exporting countries, independent petro-states, and private oil-producing firms directly influence oil prices.
· Production costs and natural disasters are significant reasons why the price of fuel might skyrocket, usually because supply is affected, hence increasing the price of existing stock.
· Demand and supply; during the Covid-19 lockdown, the world population shut down, making the demand for fossil fuels skyrocket. The industry was hit hard as its total market value suffered a significant crash.
7. It has become a constantly rising market share.
While you might be deciding to invest or not, thousands of others have already made that leap. According to a new study, the renewable energy sector is expected to receive nearly $5.1 trillion in power plants by 2030. While other energy sources such as coal and natural gas are expected to see a drastic economic drop, as far as investments are concerned. It is a constant returns investment. You can be assured that whatever amount of money is invested in it today will produce more in the long run.
8. It leads to a significant improvement in public health.
The pollution in both the air and water mediums, evident from the use of fossil fuels like coal and natural gases, are leading causes of several health problems, including;
· Heart attacks
· In severe cases, brain damage
Renewable energy sources do not create such adverse effects. An energy source known as clean energy is only available for the betterment of its users.
9. It reduces the amount of money spent on fuel production.
Investing in Africa’s renewable energy sector will be your little way of contributing to improving the African economy. It makes it possible for funds to be diverted into other sectors of the economy, including the education and health sectors, thereby enabling the continent’s growth.
10. It improves energy security.
Renewable energy provides a reliable power supply that fossil fuels could not boast about in the 21st century. It improves fuel diversification while also lowering the risk of spillage of fuels which affect the environment adversely.
Also, investing in it helps to reduce the ongoing importation of fossil fuels. For instance, during sweltering seasons in Africa, individuals can be sure of energy supply through solar panels. The security lies in the fact that they do not need to be worried about paying for electricity and the likes.
As earlier stated, investing is a huge step and one that should not be taken lightly. The Shikana group is always available to answer any questions you might have regarding your next investment opportunity. But while you are here, we hope this article has made you realise the benefits of investing in Africa’s renewable energy sector. It will surely be a decision that you will look back on with a smile.