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(The following is continued from the main article listed above.) 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. 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. According to Michael Franz, an EU project manager who has worked on developing a solar market in Kenya, PV is increasingly economically viable across Africa but opportunities are lost due to a lack of policy and regulatory frameworks. He called for greater coordination between policymakers and private partners, and said development partners should help reduce high initial costs through credit lines and develop the expertise of local companies in design, installation and maintenance. While geothermal energy is the primary focus for renewables in Kenya, the country does have a solar FiT and in January 2013 it began to allow solar-generated power to be sold to the national grid rather than only independently to consumers. The change could lead to proposals for many larger solar plants from new investors. In February, Kenya opened its largest commercial solar power farm in Timau, Nanyuki, 230 km north of Nairobi. The 72 MW farm will provide electricity to a rose farm and is the first solar farm in Kenya to be connected to the grid, which will receive surplus electricity. China’s Jiangxi Corporation has undertaken to construct a 50 MW PV project in the northeastern Kenyan city of Garissa with modules and technical support from JinkoSolar. Suppliers of solar power to the grid must have projects generating a minimum of 0.5 MW and will earn Ksh10.25 ($0.12)/ kWh. Solar power can be sold direct to consumers at up to Ksh17 ($0.2)/kWh, the price reflecting an attempt to encourage projects in remote areas. Some developers view the U.S.12 cents tariff as insufficient, as it means investors face having to wait a decade for a return on investment. But initial costs should fall this year as Ubbink East Africa, a joint venture between Netherlands-based Ubbink and Kenya's Largo Investments, begins assembling panels of greater size, reducing the need for imports. Ethiopia, sometimes called the land of 13 months of sunshine, provides an example of the vast gap between solar potential and solar plans in much of the continent. The country's five-year Growth and Transformation Plan (GTP) began in 2010 and expects solar to contribute only 30 MW to increasing Ethiopia's generating capacity at least four-fold. The longer-term Climate Resilient Green Economy strategy identifies $38 billion of capital expenditure needed over 20 years to meet energy targets but forecasts heavy reliance on hydropower. Ethiopia does have an ambitious plan for 150,000 SHSs and three million solar lanterns by 2015. But a 2012 study by Hydro-China Corporation found Ethiopia has an annual solar energy reserve of more than 2 trillion MWh as well as vast wind potential. Energy Minister Alemayehu Tegenu said the study will enable informed decisions to be taken on exploiting renewables, and the findings may encourage Chinese firms to test his pledge by exploring utility-scale projects. Interest from Chinese companies is set to prove an important factor in the scaling-up of solar in much of Africa. Professor Dieter Holm, a renewable energy pioneer in South Africa and honorary board member of the International Solar Energy Society (ISES), said: “Local labor productivity is low. If the Chinese succeed in importing Chinese labor, they will produce competitively in South Africa.” South Africa has the highest electrification rate in sub-Saharan Africa but there are still 12.5 million people without power, mainly in rural areas. The country's Renewable Energy Independent Power Producer Procurement (REIPPP) program launched in 2011 and originally called for 3725 MW of renewable capacity to be installed by 2016. In October 2012 the government approved another 3.2 GW, and future rounds up to 2020 will now offer 4365 MW of capacity. First-round approvals consisted of 18 PV projects totaling 631.5 MW, two CSP projects totaling 150 MW and eight wind projects totaling 634 MW. Round two projects included nine PV (417.1 MW), one CSP (50 MW), seven wind (562.5 MW) and two small hydro projects. But delays to financial closure on early projects, requiring the National Treasury to step in to provide guarantees, has seen third round closure pushed back to August 2013. Eskom has asked for a 16 percent price rise each year for the next five years, which would take the price of electricity from 61 cents/kWh now to 128 cents/kWh in 2017-2018. Regulators are gathering views on the request, which has led to calls for independent generators to be allowed to directly seal agreements with consumers or local distributors, freezing out Eskom. Christopher Willis, a renewable energy analyst for South Africa and sub-Saharan Africa at Bloomberg New Energy Finance in Cape Town, said: “There's a lot of concern it will put many companies out of business. A technology like solar with falling costs should be able to fill some gaps.” He added that if PV companies can build on a 45 percent local content requirement in the next round, working towards a 65 percent target, they could expect “lots of government support in pushing solar”. The third round delay could also boost CSP at a time when it appears unattractive to investors compared with PV. The Southern Africa Solar Thermal and Electricity Association claims greater backing could see 9600 MW of CSP operational by 2030, rather than the 1200 MW allocated. They propose a time of delivery price incentive to reward CSP's availability during peak periods, stating the technology “costs more because it delivers more”. It also wants the CSP REIPPP limit of 100 MW per unit raised to 140 MW. A Department of Energy plan aims for a 5 GW Northern Cape Solar Park Corridor in an area with some of the world's best direct normal irradiance (DNI) ratings, stretching from Upington to Prieska. The long-term annual average DNI in Upington of 2816 kWh/m2 is superior to levels in Spain and the US. The government plans for the 1 GW first phase of the development to be completed in 2018 with the full 5 GW operational by 2022. Spanish firm Abengoa, an early beneficiary of the REIPPP, is constructing two CSP plants in the region, due for completion in late 2014 or early 2015. The 50 MW Khi Solar One central receiver plant, with two hours' storage, is being built near Upington, and the 100 MW KaXu Solar One parabolic trough plant is being constructed near Pofadder, with three hours' storage. Upington is also the proposed location for a 100 MW central receiver plant to be built by Eskom. California-based SolarReserve has interests in two 75 MW PV plants under the REIPPP, while Saudi Arabia's ACWA is working on a 50 MW parabolic trough plant awarded through the scheme. Executives at a number of solar energy firms, such as SunEdison and First Solar, have discussed using South Africa as a springboard from which to enter other markets in the region. Meanwhile Holm has said that solar prospects were bright in neighboring Namibia, Botswana and Zimbabwe “provided political stability is achieved”. And Bloomberg New Energy Finance's Willis said Namibia and Botswana have “spectacular solar resources” but neither have established any solar targets. Namibia currently imports much of its electricity from South Africa at favorable rates but faces 40 percent shortages on peak demand in 2013. A study commissioned by the African Innovation Foundation concluded that the levelized electricity costs of utility-scale solar plants means they are not currently viable for Namibia. But it recommended the building of a 250 MW combined cycle gas-fired plant, which could gradually be weaned off gas with thermal input replaced by CSP over 20 years. While South Africa has advantages that most nations in sub-Saharan Africa lack, a few are starting to show what can be achieved with clear policy development. The path to more reliable and sustainable energy networks across Africa is sure to be a long one, but an increasing number of nations are looking to their abundant solar resources to help them along. |