LONDON -- Much of sub-Saharan Africa has experienced remarkable economic growth since the start of the 21st century. Six of the ten fastest-growing economies worldwide between 2000 and 2010 were in the region and, if current growth rates continue, Africa's GDP should increase three-fold by 2030 and seven-fold by 2050.
What is more remarkable is that the continent continues to face energy sector problems, inevitably holding back growth. It is clear that if sub-Saharan Africa is to lift its population out of poverty, alternatives to dependence on fossil fuels and hydropower are badly needed. Price fluctuations in the former have hit Africa especially hard, while the latter can grind to a halt in times of drought. These problems make the continent's vast potential for solar power essential to discussions about future energy policy.
According to a report by the International Renewable Energy Agency (IRENA), active promotion of renewable energy could see its share of African electricity generation rise from 17 percent in 2009 to 50 percent in 2030 and nearly 75 percent by 2050. Such a scenario would involve installed renewable capacity of around 800 GW by the mid-point of the century, led by PV with an estimated 245 GW, wind at 242 GW, hydropower 149 GW and concentrated solar power 94 GW.
Awakening Solar Beyond the Sahara
The focus for solar power until now has been very much on north Africa, partly due to its potential to export electricity to Europe that has been highlighted by the Desertec project. But solar potential stretches far beyond the Sahara Desert. More than 80 percent of Africa's landscape receives almost 2000 kWh/m2 per year and many countries receive 325 days of bright sunlight annually. With Africa's population expected to double to two billion by 2050, the need to begin tapping this resource is urgent.
Figures from the World Bank show that power tariffs in most parts of the developing world lie in the range of US$0.04-$0.08/kWh. Yet in sub-Saharan Africa the average is $0.13/kWh. African economies on average lose 2.1 percent of GDP annually as a result of power shortages. But with rapid reductions in technology costs and the prospect of increased security of supply, investment in solar projects in parts of sub-Saharan Africa could finally awaken.
South Africa, the continent's largest economy, gets around 90 percent of its electricity from coal but is leading the way as it seeks to increase capacity after many years of under-investment. At the same time, the government's Integrated Resource Plan calls for 42 percent of the nation's electricity supply to come from renewables by 2030. Some 8400 MW of PV capacity and 1200 MW of CSP should come online by that date through independent power providers, opening up a host of opportunities for international firms.
But many poorer countries face far greater difficulties. According to the World Bank, an energy crisis looms for 25 countries in sub-Saharan Africa that are hit by frequent blackouts. Just 24 percent of the region's population has access to electricity, compared with 40 percent in other low-income countries. Excluding South Africa, the region's entire installed capacity is only 28 GW, equivalent to that of Argentina.
Signs of life
In some countries the prospects are remote that the state will promote grid-connected renewables, as these nations have no incentives or legislation. But in others there have been encouraging signs of attracting foreign investment. One of the most testing issues is securing finance when most development banks appear to view renewable energy projects with suspicion, leaving private investors wary of shouldering too much risk. Another is implementing solar feed-in tariffs (FiTs) in countries blighted by poverty.
Dr. Xavier Lemaire, coordinator of the Sustainable Energy Regulation Network (SERN) at the University College London Energy Institute, said: “Solar is the most expensive renewable technology but the cost can go down 30 percent or 40 percent a year. That makes it very difficult to fix a tariff for 15 or 20 years.” Yet Kenya, Uganda, Tanzania, Mauritius and Ghana all have FiTs for on-grid solar, while Ethiopia, Botswana, Namibia, Nigeria, Senegal, Zambia and Zimbabwe are introducing or considering them.
Ghana has been one of Africa's star economic performers and in 2011 its government established an ambitious vision with its Renewable Energy Act. Although FiT rates have not been disclosed and are to be set project by project, Ghana's government has vowed to provide electricity to the entire population by 2016 and to increase the installed capacity accounted for by renewables from 0.01 percent in 2011 to 10 percent by 2020.
Energy Minister Joe Oteng-Adjei announced in November 2012 that the country was seeking $1 billion in private investment to meet its renewable targets. A month later UK-based Blue Energy agreed to construct Africa's largest PV plant, the 155 MW Nzema project in western Ghana, which is scheduled to begin generating in 2014. The $400 million plant will be the fourth biggest of its kind globally and has been awarded a 20-year FiT.
According to Blue Energy, Nzema will increase Ghana's electricity generating capacity by 6 percent and meet one-fifth of the government's 10 percent target for renewables by 2020. It will also be directly connected to the 161 kV West African Power Pool transmission line, which links Ghana to Ivory Coast, Togo, Benin and Nigeria. The company expects to conclude financing arrangements in the first half of 2013 with construction by Mere Power Nzema Ltd.
In November 2012 Ghana also hosted the first International Off-Grid Renewable Energy Conference, organized by IRENA, which brought together public and private sector delegates to focus on policies, financing and technologies required to scale up off-grid rural electrification. Among the conclusions were that off-grid renewables should be part of the electrification strategy, that they require specific policies, that targets are needed and that awareness must be raised of their low lifecycle costs.
In Ghana itself, the World Bank has helped provide credit lines through rural banks for solar home systems (SHSs), while a government scheme focuses on solar electrification for schools, health facilities and national security outposts in off-grid areas.
Kenya has proven the most dynamic SHS market, with around 300,000 installed, benefiting an estimated two million inhabitants. IRENA has also praised Senegal and Mozambique as having shown “strong political commitment to renewable development”, while recognizing that rural electrification remains a core concern.
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