Energy Efficiency Made Simple Vol IV

ven when including the national electrification rates of South

Africa (85%) and Ghana (72%), which are currently the highest

in sub-Saharan Africa, the average electrification rate at national

level remains as low as 30%. This is despite an annual average GDP

growth context of about 4-5% as shown by the latest forecasts from

the International Monetary Fund (IMF). One cannot hide the fact that

power deficits are, and will remain, a core obstacle for socio-economic

development in sub-Saharan Africa within the next decade.

Wind, solar, geothermal

Thanks to their cheap and environmentally-friendly operating costs

(no fuel costs), falling technology and capital costs, as well as short

construction lead times compared to traditional fossil fuel power plants,

wind, solar and geothermal technologies are gaining momentum

in Africa.

Thereby, massive investments in solar and wind power have been

taking place in the past three years in South Africa with the success-

ful implementation of the Renewable Energy Independent Power

Producer Procurement Programme (REIPPPP). These technologies

have also been gaining strong ground in North Africa, with Morocco

and Egypt taking the lead by implementing large grid-connected solar

and wind power projects.

What can we expect from the rest of Africa?

Next to this, the logical question that one could raise is: What can we

expect from the rest of Africa? This has been the purpose of the anal-

ysis report, titled ‘Large-scale RE power development opportunities in

sub-Saharan Africa – A story about bankability, affordability, and grid

capacity (2015)’ [2]. The study [2] identifies countries with the highest

opportunities in terms of grid-connected RE resources, combined with

a series of other factors such as the countries’ regulatory, political,

and economic landscape. The research focused on four different RE

technologies: Solar photovoltaic (PV), Concentrated Solar Power (CSP),

wind, and geothermal. Hydropower was excluded as many countries,

especially those suffering from severe drought in Eastern and Southern

Africa, are trying to diversify their electricity generation mix to include

more non-hydro renewable energy sources, which are less prone to

climatic changes. As stated previously, most countries in sub-Saharan

Africa are facing a power deficit or need to build additional power

generation capacity in order to address a strong economic growth or

to replace ageing power plants. The gap between power supply and

power demand is less important in certain countries compared to the

others (especially countries with lower population density such as

Botswana and Namibia).

Nevertheless, ideal geographic locations combined with strong

natural resources can offer an opportunity to export their power

surplus to neighbouring countries or to regional power pools where the

deficit is larger. So far, regional power trades have remained limited,

with the Southern African Power Pool (SAPP) being the most active

as of today.

Emphasis is currently placed on reinforcing intra-regional power

transmission networks, especially in Eastern Africa where one of

the main active projects includes the Ethio-Kenyan transmission line

project which aims to build a 433 km transmission line between

Ethiopia and Kenya, with the intention to export Ethiopian power

further into the Eastern African region. This will constitute an important

prerequisite to implement successful, sustainable, and diversified

large-scale RE power sources.

New opportunities

Following the recent success of the South African REIPPPP, the strong

global fall of RE technology costs, and the available RE stock/services

surplus from a financially constrained European power market, many

international (RE) power developers decided to look for new opportu-

nities elsewhere, including in Africa. Large economies of scale (with

the auctioning of solar and wind power projects of several hundreds

or even thousands of megawatts) combined with a clear regulatory

and institutional framework, as well as a strong will (i.e. which concre-

tises into action) from governments to implement large amounts of

RE power technologies in a relatively short timeframe, have favoured

North and South Africa. Now, many developers are showing a growing

interest to develop their activities in the rest of sub-Saharan Africa.

Many private equity funds have been set up with the intention to in-

vest large amounts of money into clean energy infrastructure projects

across sub-Saharan Africa. Power demand remains; however limited in

most countries and, therefore, does not allow the economies of scale

benefitting RE developers in North and South Africa. Nevertheless,

there is a plenitude of ‘smaller’ opportunities across the region. It will

be more a matter of finding an efficient way to finance them or to

‘scale them up’ in order to improve the bankability of such projects.

Large-scale Renewable Energy power

opportunities: Africa

C Paton, Frost & Sullivan Africa

Following a global trend, governments inmost sub-Saharan African

countries have set up Renewable Energy (RE) targets for their

power sector that are becoming increasingly ambitious. According

to the REN21 Renewables 2015 Global Status Report [1], as of early

2015 most of the countries in sub-Saharan Africa have already set

up official RE targets with the exception of Angola, Burkina Faso,

Cameroon and Zambia. The latter is rather unexpected and most

likely explained by the fact that 99% of its power installed capacity

already comes from renewable sources (i.e. hydropower).

The electrical sector is a regulated and relatively conservative sector –

for a good reason. The opportunities that renewable energy sources

offer in the sub-Saharan Africa arena have encouraged regulation to

reflect on how to incorporate these technologies, and Independent

Power Producers in general, into the existing grids.

ENERGY EFFICIENCY MADE SIMPLE 2015