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Ronke Luke

Ronke Luke

Ronke Luke has experience advising senior executives (including at the ministerial level) on initiatives to develop and increase uptake of advanced energy and environmental technologies…

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Solar Power Growth Soars In Africa

Solar Power Growth Soars In Africa

When His Majesty Mohammed VI of Morocco commissioned the world’s largest concentrated solar power (CSP) plant on February 4, 2016, long-term advocates for clean energy in Morocco and Africa celebrated a breakthrough.

The $3.9 billion plant, Noor 1, which provides 160 MW of power, is the first phase of a four-part 580 MW facility that will be the world’s largest solar plant when completed. The project is a public-private partnership between Moroccan Agency for Solar Energy (MASEN) and a consortium led by the Saudi International Company for Water and Power (ACWA Power).

Once completed in 2018, Noor complex will supply power to 1.1 million people. The facility doesn’t come cheap. The whopping $9 billion required to finance 580 MW Noor is provided by a who’s who of development finance organizations including: German investment bank KfW ($1 billion), World Bank ($400 million), European Investment Bank ($596 million), Climate Investment Funds ($435 million), Clean Technology Fund ($97 million), African Development Bank (EUR 168 million).

Morocco and Noor’s financiers hope that this showcase project, which is anticipated to reduce carbon emissions by 760,000 tonnes annually, is a signal of what is possible in clean energy. Environmentalists aren’t rejoicing yet. They voice concern about the water required to cool a plant in the midst of a desert, particularly during an ongoing drought. The project’s advocates brush off these concerns. Morocco’s minister for Environment Hakima El Haite, who characterized Noor as the most important solar project in the world, is quoted as saying "This project allows a number of countries to see there's hope for countries who are not rich in petroleum." Related: Why Is Well Decommissioning So Slow In Canada?

There is certainly an upsurge in large scale solar plants across Africa. The impetus is the same as Morocco’s. Dependence on imported fossil fuels, subsidized energy costs and rapidly growing power demand are combining to form an unsustainable situation for governments across Africa. The collapse of oil prices provides some relief for government budgets, but internal pressure from citizens and businesses demanding electricity for socio-economic progress gives ruling parties little political relief.

Opposition parties are pounding sitting governments about brown outs, blackouts and their failure to bring development. So politicians who can lay claim to delivering electricity protect a vulnerable flank. Governments are more sharply focused than ever before on lighting up their states.

Early solar adopters include Kenya, Rwanda and South Africa. Rwanda lays claim to the continent’s fastest built solar facility. The $23.7 million 8.5 MW facility went from contract to commissioning in a year; an impressive feat considering getting projects from intention to fruition is still notoriously hard across Africa. The project’s success has spurred Rwanda to pursue more renewable projects. Related: Oil Rally Stalls After Iran Declines to Commit to Freeze

But most of the money to-date has flowed to South Africa. Under its Renewable Energy Independent Power Producer Procurement Program (REIPPP), South Africa plans to procure 3,725 MW of renewable energy including 200 MW of CSP and 1,450MW of solar PV by 2030. To-date South Africa has secured $14 billion in new investments for 64 projects totaling 3,500 MW of renewable energy. Amongst the 64 projects is the 96 MW Jasper Power Project, in which Google invested $12 million.

Kenya is East Africa’s most vibrant solar and renewable energy market, attracting domestic and international entrepreneurs. Financial innovations in mobile payments merged with solar home kits and mini grids eliminated once prohibitive capital costs making solar power accessible to poor populations once excluded from the grid.

M-kOPA Solar, which has connected 300,000 rural homes to solar kits, has essentially created one of the hottest (no pun intended) energy markets in Africa. In its most recent financing round it raised $19 million from backers including Al Gore’s Generation Investment Management that will go towards reaching 1 million customers in East Africa by 2017. While private sector focuses on the neglected rural customers, the Kenyan government is focused on increasing the renewables mix in grid-supplied power. In 2015, the Government of Kenya signed a $2.2 billion deal with SkyPower to develop “a series 1 GW solar projects” over five years. Related: Activist Investors Crushed By Oil Crash

West Africa has lagged behind in solar power development compared to other parts of Africa. After years of work, the Economic Community of West African States (ECOWAS) and the Regional Centre for Renewable Energy and Energy Efficiency (ECREEE) is finally reporting flickers of progress. The current project pipeline consists of PV systems in Cape Verde (5MW); Sierra Leone (6 MW), Ghana (two 20 MW facilities), Mali (20MW), Burkina Faso (20 MW), Senegal (forty 20 MW mini grids). In a more ambitious initiative, ECOWAS is proposing a 2GW solar corridor across the Sahara from Senegal to Niger. Seeking financing and attracting private sector investors for all these initiatives are the next challenges.

Across Africa, entrepreneurs have joined the development crowd to prove that solar power on a large scale is technically-viable. The success across the first mover countries debunks historical skepticism in other governments. With the demand for electricity soaring, and the dependence on fuel imports seeming like an increasing liability, the attractiveness of expanding the fuel mix to include solar is increasing. Competition for financing will determine which solar projects are built.

By Ronke Luke Of Oilprice.com

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