By ALLAN OLINGO
In Summary
- Report shows clean energy policies are becoming more widely adopted across sub-Saharan Africa.
- South Africa was the best scoring country in sub-Saharan Africa on clean energy investments, thanks to its auction programme which saw it bag $4.1 billion of new investments last year.
- It was followed by Uganda and Kenya, thanks to significant policies supporting clean energy development, healthy investment activity and a growing number of stakeholders involved in the energy sector.
East Africa’s economies top countries in sub-Saharan Africa
in injecting clean energy into their national grids, through new
projects in wind and solar.
The latest report of Climatescope, the clean energy country
competitiveness index by Bloomberg New Energy Finance, shows that clean
energy policies are becoming more widely adopted across sub-Saharan
Africa.
“Fourteen countries from the region have introduced renewable
energy targets that saw their clean energy investment nearly double
between 2014 and 2015, to reach $5.2 billion,” the report says.
Kenya consolidated its standing as a global leader in geothermal
energy, adding 58MW, which raised its total installed capacity to 740MW
at the end of 2015.
Ethiopia commissioned 150MW of onshore wind power plant in 2015,
nearly doubling its cumulative wind capacity since 2010. It is second
to South Africa in terms of new installations.
In June, Ethiopia’s Minister of Water, Irrigation and
Electricity Motuma Mekassa told the Africa Energy Forum in the UK that
the country would be tendering for a 5,200MW solar power plant, which
would be the biggest project on the continent.
“We have an average daily solar radiation potential of 5.5kWh
and this project will be a game changer. We have held formal discussions
and we will look out for the best partner,” said Mr Mekassa.
According to Bloomberg New Energy Finance, Ethiopia has this
year issued requests for proposals to install a dozen additional
geothermal and solar projects, introducing a competitive auction bidding
process that is significant for the sector.
“Four of the new projects will be privately owned; the rest will
be built under engineering, procurement and construction contracts and
retained by the Ethiopian Electric Power,” the report says.
More investments
South Africa was the best scoring country in sub-Saharan Africa
on clean energy investments, thanks to its auction programme which saw
it bag $4.1 billion of new investments last year.
It was followed by Uganda and Kenya, thanks to significant
policies supporting clean energy development, healthy investment
activity and a growing number of stakeholders involved in the energy
sector. Nigeria also signed a $1.75 billion deal with 14 solar companies
to supply electricity to the nation’s power grid.
Last year also saw an increased interest from private equity and
venture capital flows into off-grid solar. The report also shows that
off-grid electrification companies in Kenya, Tanzania and Zimbabwe
received about $80 million in new investments last year — more than four
times the amount recorded in 2014.
Early this month, Kenya and the World Bank said that they were
in talks to finance a $150 million solar-and-wind project. Kenya Power
managing director Ben Chumo said that this was part of the government’s
efforts to get new capacity from renewable sources, which should bring
down energy costs
“The construction of this new plant is expected to start mid
next year and will seek to replace the more expensive diesel-fuel
generation,” Mr Chumo said without divulging the expected power wattage
of the plant.
According to data from African Development Bank, Kenya’s power
is the most expensive in the region at $0.18 per kilowatt-hour, compared
with $0.09 cents in Tanzania, $0.07 in Uganda and $0.03 cents in
Ethiopia.
The $316 million financing of the 100MW Kipeto onshore wind farm
in Kenya was another record-breaking deal for the country following the
conclusion of the $859 million Lake Turkana wind project financing in
2014.
“By far the largest clean energy project currently under
construction is the 310MW Lake Turkana wind farm, which is expected to
come online in 2018. Several other wind projects are in early planning
stages. There are also a handful of large solar projects. Once built,
these projects will be among the largest PV plants in sub-Saharan
Africa,” the report says.
Off-grid electrification
Ghana, Senegal and Uganda together attracted a combined
estimated $160 million in investment for 110MW of solar PV projects.
This marked a remarkable step up for the region, considering just 12MW
of solar PV secured financing in 2014 and 56MW in 2013. This
acceleration is set to continue in 2016, with 145MW of solar PV already
tracked by Bloomberg New Energy Finance.
In the geothermal sector, Ethiopia’s $100 million financing of
the first phase of Reykjavik geothermal Corbetti power plant boosted the
investments last year, with deals exceeding $95 million recorded in
four other countries including Kenya.
While the overall trend appears positive, some countries have
not reviewed their targets. For instance, Tanzania only plans to install
100MW of solar, 200MW of geothermal and 200MW of onshore wind by 2025
against a complete power-generating matrix of 10.7GW.
“Most new installations in Tanzania will be gas and coal, as the
government aims to cut reliance on the costly emergency diesel-fired
power stations. These efforts are starting to bear fruit: by end of
2015, gas capacity topped large hydro for the first time,” the report
says.
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