E
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).
1
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.
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ENERGY EFFICIENCY MADE SIMPLE 2015