Paper short abstract:

This paper asks how political economy contexts will shape the adoption of unprecedented innovations in enabling energy technologies and new business models, that have emerged over the past decade, and the resultant nature and pace of a new wave of power sector reforms in Kenya, Namibia and Zimbabwe.

Paper long abstract:

The past decade has seen rapid innovation in energy technologies and business models, especially the breakthrough of low-cost renewable and distributed energy, resources. These innovations are prompting a new wave of reforms on how the power sector should be organised, operated and regulated. We ask how political economy factors will shape the redesign of power markets in Africa that is prompted by the growing share of variable renewables and distributed energy resources. We apply a comparative case study approach of Kenya, Zimbabwe and Namibia and draw on analysis of qualitative data collected through semi-structured interviews. The study draws on three bodies of literature- standard power sector reform, current innovations inducing a new wave of reforms, and political economy as applied to the power sector. We find that of the three countries, only Namibia seems to have a political objective to maintain cost reflective tariffs while in both Zimbabwe and Kenya, political actors favour low tariffs as a means of retaining control and remaining in power especially towards election season. We conclude that the political economy of African countries is best suited to regulatory instruments which avoid privatization but include private participation in some form. This satisfies the dominant nationalist ideology but can achieve good performance. Furthermore, the study shows that effective integration of distributed energy resources requires sending the right economic signals with granularity in space and time. However this requires a level of sophistication that may be beyond reach in the context of African power markets at present.