Sub-Saharan Africa commissions 1.8 GW RE capacity this year


Solar PV, wind and geothermal power are each experiencing a growth spurt across many parts of sub-Sahara Africa this year, with the region on course to commission 1.8 GW of clean energy by the end of 2014.

Bloomberg New Energy Finance's (BNEF) latest analysis reveals that more renewable energy capacity will be added to Africa's pipeline this year than the entire amount that has come online so far this millennium. Lower PV costs per MWh, allied to a growing need for local power has pushed solar energy to the forefront as many countries in the region – led by South Africa, Ethiopia and Kenya – seek long-term alternatives to fossil fuels.

According to BNEF's calculations, approximately $5.9 billion will be invested in sub-Saharan clean energy projects (excluding large hydro) this year. While that figure is 5% below last year's $6.2 billion, the industry is readying itself for an upward trajectory, hitting $7.7 billion in 2016. During 2006-22, less than $1 billion a year, on average, was invested in the region.

"Sub-Saharan Africa is not new to renewable energy," said BNEF senior analyst Victoria Cuming. "South Africa has been an active market for a few years and there have been occasional large investments in geothermal in the Rift Valley countries.

"What is different now is the breadth of activity, with solar, wind and geothermal exciting interest in many different countries, and the potential for further growth."

South Africa will lead the charge over the coming three years, adding around 3.9 GW of utility-scale clean power between now and 2016, with wind outperforming solar PV. Kenya is forecast to install 1.4 GW of renewable energy – mostly wind and geothermal – while Ethiopia could add close to 600 MW of solar PV, wind and geothermal energy over the next two years.

Africa's potential has not gone unnoticed by foreign investors and developers. Last month, Spanish solar developer Abengoa secured a $142 million loan from the African Development Bank to help finance the 100 MW Xina Solar One solar thermal project, while other outsiders have been peering across the Sahara at the abundance of opportunities.

However, it is bottom-up, small-scale solar PV developments that could really transform the region’s energy future, believes BNEF's Cape Town-based analyst, Derek Campbell. "The joker in the pack for the sub-Saharan region is likely to be rooftop and other small-scale PV, which has the potential to enjoy explosive growth in Africa’s towns and cities, and also in rural areas not connected to the grid," said Campbell.

"Small-scale solar needs viable financing models, since the initial capital outlay is too high for most households. We have seen some strong activity in Kenya, with business models such as M-KOPA. The question is whether people in other countries can warm to the idea of generating their own solar power in the same way as they flocked to mobile telephony."

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