South Africa is leading the development of renewable energy in Sub-Saharan Africa, but other countries are now beginning to follow. Ben Willis considers the challenges that await them.
In late-Janurary, South Africa was ranked the world’s most attractive emerging solar photovoltaics (PV) market, according to a report from market analyst firm IHS. A combination of favourable macroeconomic conditions, market potential and user-friendly tendering processes all made South Africa, in IHS’s view, the clear leader among other contenders such as Thailand and Turkey.
For a country in a part of the world not exactly famed for its business-friendly environment, this accolade was a huge vote of confidence. It bore out sentiments voiced last year by solar industry players operating in the country that South Africa’s government had pulled off a real coup with its national clean energy programme, which has catapulted the country on to the world renewables stage in almost no time.
The question now is whether other parts of the continent can follow South Africa’s lead. Set against a legacy of under-investment in energy infrastructure, the rapid economic growth and increasing energy demand now being seen in some parts of Africa create all the right ingredients for an explosion in solar and other renewables. As the conventional wisdom goes, in the same way infrastructure-light mobile telephony has taken off in Africa, so decentralised forms of energy generation requiring minimal grid investment offer a similar opportunity to propel forward the continent’s development.
Indeed, over the past year a number of African countries have begun to show signs of interest in solar. Apart from South Africa, where almost 1.5 GW of PV projects are now either complete, under construction or in the pipeline, countries including Ethiopia, Uganda and Ghana have recently unveiled plans for 100-MW-plus projects.
But realising Africa’s vast potential will mean the negotiation of some significant hurdles — not just technological, but political, financial and logistical, too. Despite South Africa’s success in developing enough investor confidence to kick-start a renewables market, other countries are not necessarily in the same position as South Africa in terms of government integrity or creditworthiness.
One recent example illustrated the difficulties faced by investors eyeing Africa. At the end of November last year, a Bloomberg report suggested Kenya had put the brakes on its renewables programme by suspending the licensing of solar and wind farm projects until 2017. Just over a month later, the U.K.’s Guardian newspaper carried a wild report that Kenya was planning to source over half its total energy generation capacity from solar within just two years.
Further investigations revealed that neither report was accurate — the Kenyan government is still looking to encourage large-scale solar, wind and other renewables but has pegged its ambitions for solar at a modest 300 MW, rather than the huge numbers suggested by the Guardian. But the fact the authorities there allowed both stories to run without issuing any kind of clear correction highlights how muddy the waters can appear for foreign firms looking to understand potential new markets. For investors, uncertainty is generally a deal-breaker and the fact that the Kenyan authorities did little to reassure the market will have done the country little good.
Beyond uncertainty, other challenges include corruption, underdeveloped supply chains and a lack of skilled labour. But as South Africa once again illustrates, none of these obstacles are insurmountable; as the scrum of leading manufacturers and developers now jostling for position in South Africa attests, build it and they will come.
That’s not to say it won’t take an intense effort on all fronts — political, financial and industrial — for the potential of Africa’s renewables market to be in anyway realised.
With this in mind, this week will see the launch of a major new conference in Nairobi, Kenya, dedicated to exploring and debating issues around Africa’s nascent renewables industry. Solar and Off-Grid Renewables Africa 2014 is organised by U.K.-based Solar Media and will be held at the Sarova Panafric Hotel, on March 4 and 5. Full information on the event is available here.
Lead image: Africa via Shutterstock