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Spanish Firms Gain Edge in Nascent African Renewables Market

A number of Spanish firms have been awarded 510 MW worth of renewable-energy projects in South Africa and are set to compete in future auctions as the continent hastens plans to develop its green energy sector.

Abengoa, Gestamp and Iberdrola won 150 MW of concentrating solar power development (which they will carry out through two plants), 100 MW worth of equipment and 260 MW of wind power projects respectively in the auction, which put 28 projects equating 1,500 MW of clean energy on the block.

According to Enrique Manzanares, a representative for Spanish foreign commerce institute ICEX, which helped the Spanish firms participate in the contest, the 1,500 MW will require $4,5bn in investment.

Manzanares says Vestas, Siemens, India's Suzlon, China's Sinovel and Nordex had won a "significant portion" of the 630 MW wind projects awarded in the RFP. Two firms that didn't win anything were Spanish wind-power majors Gamesa and Acciona, Manzanares conceded, though he would not comment on the reasons behind their losses.

2,200 MW by 2014

Manzanares said, however, that these and other Spanish renewable companies will surely participate in Africa's next renewables auction, scheduled for March. He said the auction (the size of which has not been disclosed), will seek to develop Leshoto, Namibia and Bostwana's renewables industry.

He said Africa could auction another 2,200 MW in the next two years, most of which will come from highly polluting South Africa, which is working to install 3,745 MW of green power by 2025 to lower its economy's high oil dependence.

"South Africa's renewable-energy market is just taking off," says another ICEX representative requesting anonymity. "The country has great wind and solar resources and is leading the way in Africa's renewables expansion."

Steve Sawyer, secretary general of the Global Wind Energy Council, said South Africa represents a great opportunity for international developers to grow in the continent's biggest and most dynamic economy.

"Growth [in renewables] is going to be massive. The reason is simple. There is nothing right now," says Sawyer.

East and West Africa

Stanley Igwebuike Ijeoma, CEO of African renewable energy firm Schrodinger and a member of the World Council for Renewable Energy, adds that South Africa also has strong potential for geothermal and hydropower development. The country is also working to develop carbon capture and storage technologies.

Elsewhere in Africa, ambitious plans are afoot to develop East African's renewables sector with the East African Community's biggest members -- Kenya, Tanzania and Uganda -- preparing a string of wind, solar and geothermal projects. Tanzania is spearheading the region's wind development by currently building the $123m Singida wind park, which will have an installed capacity of 1,800 MW when fully operational in five years, Igwebuike says. In Kenya, there are also plans to develop geothermal plants, he adds.

But Igwebuike wasn't too optimistic about renewable power developments in West Africa, which he says is lagging behind all other African regions with just 50 MW of wind power capacity currently under construction in oil-rich Nigeria.

"We are working very hard to push the region's governments to launch development programs and come up with a feed-in tariff for future projects," Igwebuike says. "These countries need to understand that without government support and social awareness of the importance of renewable energy nothing will get done."

Igwebuike says Schrodinger is working with the World Bank and the United States Trade and Development Agency (USTDA) to conduct feasibility studies and test out renewable power projects in East Africa, adding that solar development will be a priority in the region's strongest economies Nigeria, Ghana and Sierra Leon.

One such initiative was a $162,000 USTDA grant handed to Nigerian telecoms firm IHS Nigeria, which it is using to replace its diesel-powered tower sites with solar-power ones. The solar-power systems are to be supplied by U.S. manufacturers.

"West Africa has the largest solar generation [potential] capacity in all of Africa and there are also great opportunities for wind and other renewables,"Igwebuike concludes.

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