November 18 2022 0Comment

Lesotho’s Renewable Energy Opportunities

In our latest blog, Dr Moeketsi Kali writes on the current situation and potential for renewable energy developments in Lesotho.

Lesotho’s leading renewable energy is state-owned and managed by Lesotho Electricity Company (LEC). The Lesotho Highlands Development Authority (LHDA) generates electricity, and LEC transmits and distributes it across the country. In addition, LEC manages the mini-grid station located at Semonkong. Lesotho Electric and Water Authority (LEWA) regulates the electric sector in the country. Lesotho’s electricity access rates are around 38%, with 60% for urban and peri-urban households and 18% for rural households. On average, the lowlands have more access to electricity than the highlands, as illustrated in Figure 1.

Figure 1: Lesotho electrification rate per district

Lesotho’s electricity generation capacity stagnated at around 74MW for over a decade with no expansion prospects. This challenge presents an opportunity for local and international entrepreneurs to invest in renewable resources in the country. Figure 2 demonstrates that as electricity demand increased, generation capacity remained constant over the years.

Figure 2: The demand for renewable energy outpaces its production in Lesotho.

Equally, from 2001 to 2021, the demand for electricity skyrocketed by 93% and the total consumption surged by 186%. In 2001, at least 25,000 households had access to electricity, and the number soared to 235,000 in 2017 as Figure 3 illustrates.

Source: Mpholo et al. (2018)

Muela Hydro Power Station generates 72 MW, Mantšonyane generates 2 MW from the river plant, and the Semonkong mini-grid generates around 400kw.

Even if 66% of the 2.2 million population of Lesotho lives in rural areas, they are largely excluded from reaping the benefits of renewable energy to curb the hazards of biomass. There is a need to attract investment to establish microgrids in the country to accelerate the electricity generation rate for all segments of society to have access to clean energy. Therefore, the government should consider creating an administrative unit that facilitates investment in the energy sector to speed up the licencing process.

Country’s opportunities for investing in renewable energy are significant. As the country’s electricity demand has exceeded its 72MW generation capacity, it is compelled to import electricity from Mozambique and South Africa. It seeks to reduce imported energy with the one generated locally, but investments are scanty in renewable energy projects; however, the existing ones show prospects of success. In addition, the emerging independent power producers invest in solar energy by establishing mini-grids to supply rural communities with energy.

Interestingly, the communities seem prepared to bear all the costs of installing electricity and consumption charges. While one could fear that the established Lesotho Electricity Company (LEC) may act as a monopoly and outcompete emerging businesses, the reality shows the contrary. Rural communities are willing to pay electricity tariffs that are more than twice the price charged by LEC. According to our preliminary findings, what matters to them is the constant supply of energy over the cost, as evidenced by the dissatisfaction of the Semonkong community towards LEC-owned mini-grid in their community.

Figure 4. Semonkong mini-grid