Energy: Green today, cheap tomorrow
As incomes rise an populations grow, Africa needs more power, and fast. More than half the population lacks access to electricity, leading to a spike in the use of polluting and inefficient diesel generators.
Nigeria, South Africa, Kenya – everyone is looking to generate more power to support the economic growth in their countries
But while renewable energy is quicker to set up than coal or gas power plants – around 24 months for a wind farm versus at best four or five years for a coal-fired plant – it has long been seen as a luxury because of its prohibitive costs. No longer.
Green energy is get- ting cheaper through both technical innovation and econom- ies of scale.
“Solar photovoltaic (PV) modules in 2014 cost three-quarters less than in 2009, while wind turbine prices declined by almost a third over the same period,” says a January 2015 report by the International Renewable Energy Agency (IRENA).
A Deutsche Bank report says the cost of rooftop solar is approaching that of coal-fired power. “Over the next 20 years, we expect over 100 million new customers to deploy solar,” it says.
Africa could be the Saudi Arabia of green energy. Many African countries receive an average of 325 days of sunlight per year.
Areas such as the Horn of Africa have significant wind generation capacities, while countries along the East African Rift Valley hold massive geothermal potential.
Countries are capitalising on these advantages to meet their energy needs.
“Nigeria, South Africa, Kenya – everyone is looking to generate more power to support the economic growth in their countries,” says Dolapo Oni, head of energy research at Ecobank.
More than half of the 85 countries in the Sustainable Energy for All initiative, launched by UN secretary general Ban Ki-moon in 2011, are African.
One of the initiative’s three objectives is to double the share of renewable energy in the global electricity mix.
Green sources provided for an estimated 19% of global energy consumption in 2012, according to IRENA.
Keep it small
The private sector has taken up the challenge. Clean energy is not easy though, and small may be beautiful in the short run.
The $400bn Desertec initiative, for example, sought to build solar farms in the Sahara Desert to provide about 15% of Europe’s electricity.
Promoters launched the project in 2009, but in 2013 they put it on hold because it was too costly and over-ambitious.
Antony Karembu, a policy adviser for the African Development Bank’s Sustainable Energy Fund for Africa (SEFA), argues that governments need to learn from such cases.
“We need solutions that are actionable for Africa. We need to stop looking at the big projects and start focusing on the small to medium-sized projects. The timelines for the big ones are too long and transaction costs are higher.”
SEFA launched the African Renewable Energy Fund in March 2014 with $100m to support small independent power producers.
It aims to unlock private-sector investment and is involved in an early-stage wave energy project in Cabo Verde and supporting studies for a project in Mauritius that seeks to use sea water to cool buildings.
Other smaller and more attainable projects are now taking the continent by storm. Britain-based Blue Energy is building Ghana’s 155MW Nzema solar park – Africa’s biggest solar PV plant – which will generate enough power when it launches this year to supply electrity to 100,000 households. ●
Contractors built Africa’s first geothermal plant, Olkaria I, in 1981, and Kenya is now the eighth-largest geothermal producer in the world. Now joined by Olkaria II and III, it is the continent’s largest geothermal project. The state-owned Kenya Electricity Generating Company (KenGen) operates the upgraded geothermal complex, which was commissioned in February 2015. It contributes 280MW to the national grid.
In January, KenGen, which produces about 80% of the country’s electricity, announced that geothermal’s share of power production had risen to 51% from 19% the previous year, making it the main power source in the country ahead of hydro. Experts estimate Kenya’s geothermal potential at 10,000MW, and the government is targeting the development of 5,000MW by 2030.
To tackle the lack of local expertise that had curbed geothermal growth, Kenya opened the Geothermal Energy Training and Research Institute at Dedan Kimathi University of Technology in April. The country is also harnessing its potential for wind energy. The KSh70bn ($742m) Lake Turkana Wind Power Project, which London-based Aldwych International began this year, is expected to produce 300MW and will be one of the largest wind projects in Africa when completed in 2017.
The Moroccan government wants renewables to account for 42% of its electricity generation mix by 2020, with solar, wind and hydro each representing 14%. The 2020 target includes the Moroccan Solar Plan (MSP), launched in 2009 to generate 2,000MW of solar capacity across five power stations spread over the country at Ouarzazate, Ain Beni Mathar, Foum El Oued, Boujdour and Sebkha Tah, with an estimated total cost of $9bn. The kingdom currently imports more than 90% of its energy, making it the largest importer of energy in North Africa.
According to a 2013 IRENA study, Morocco ‘is prioritising the manufacturing of components for PV solar (films, cells, panels, etc.), solar thermal (flat mirrors, control systems, condensers) and solar water heating (SWH)’ so that local companies are not left out of the green boom. Under the MSP, local content is a key criterion in the evaluation of bids. The 160MW solar plant at Ouarzazate that the government awarded to ACWA Power includes 42% local content.
A series of wind projects are making progress, too. French company GDF Suez and its local partner Nareva developed the 300MW 2 in southern Morocco,
a $610m project that began construction in June 2013 and started commercial operations at the end of 2014.
Heavily reliant on coal for power, South Africa is targeting 18,000MW of renewable power generation capacity by 2030. The country attracted the world’s largest clean-energy investment commitments for the first quarter of 2015, with planned investments totalling $3.1bn according to Bloomberg New Energy Finance. That was ahead of India’s $1.6bn.
The state-owned electricity utility Eskom – which generates about 95% of South Africa’s power and is the largest electricity producer in Africa – is taking steps to diversify its energy mix using the country’s solar and wind resources. The company announced in January that the Sere Wind Farm in Western Cape Province, its first large-scale renewable energy project, was running at its full 100MW capacity, which is enough to supply electricity to about 68,000 homes.
In April this year, the government selected bidders for a series of wind and solar projects during the fourth round of the Renewable Energy Independent Power Producer Procurement Programme. The projects are due to add more than 1,100MW to the grid and include the 140MW Roggeveld Wind Farm, the 4.7MW Kruisvallei hydro plant to be developed by Italian firm Building Energy and a 25MW biomass project for paper-maker Sappi.