The rise of African renewable power

Posted on :Wednesday , 19th October 2016

South Africa will lead the charge, as Sub-Saharan Africa’s renewable energy sector expands

Energy supplied from renewable sources across Sub-Saharan Africa will soar by nearly 65% between now and 2040, reaching around 585m tonnes of oil equivalent, according to the International Energy Agency (IEA).

The region's power sector will see rapid growth of renewables-based capacity, which will skyrocket from around 20 gigawatts (GW) now to nearly 170GW in 2040. The share of renewables generation capacity in the region's power mix will reach 44% of the total.

Across sub-Saharan Africa, installed solar power capacity increased from 40 megawatts (MW) in 2010 to around 280 MW in 2013. There are several grid-connected projects under construction, including the 155MW Nzema plant in Ghana and 150MW of projects in South Africa. The latter in particular will lead the renewables charge.

It has the second largest economy in Africa and consumes the largest amount of energy, accounting for about 30% of the continent's total primary energy demand-according to BP.

South Africa's renewables sector is the fastest growing in the world, according to Moody's, a ratings agency. In 2015 renewable energy asset finance soared by 300%, from a year earlier, reaching $4.5bn.

Falling costs, a growing number of independent renewable power producers and interest from investors are all helping the renewables sector expand rapidly. Sub-Saharan solar capacity is expected to exceed 6GW by 2020, before soaring to around 45GW in 2040, according to the IEA.

Around half of the region's total solar capacity will then be located in South Africa.

The country will also be the region's biggest contributor to wind capacity additions over the period, adding around 0.3GW per year. Its wind power capacity will reach 2GW by 2020 before soaring to nearly 7GW in 2040-more than half of the sub-Saharan total. Most of this will be located onshore. While South Africa's renewables sector has seen a surge of interest over the past year, coal still provides around three-quarters of its energy needs.

More than 85% of South Africa's installed electricity capacity is powered by coal-fired power stations, according to the Energy Information Administration.

But the government wants to diversify its energy mix by boosting renewable energy capacity and expanding nuclear power, particularly for electricity generation.

The IEA estimates grid-based power generation capacity across the whole of Africa will quadruple between now and 2040, albeit from a very low base of 90GW today.

Half of this growth will be in South Africa.

The government plans to increase its total renewable generating capacity to around 17.8GW by 2030. That's up from just 1.9GW last year.

How fast South Africa's renewables sector actually develops will depend on the pace with which the country's transmission infrastructure, which badly-needs additional capacity, manages to expand. This will depend on interest from investors.

South Africa's electricity system is badly constrained as the margin between peak demand and available supply has been narrowed significantly since 2008. That year some of the country's coal mines had to halt operations because of blackouts.

In 2008 state-run utility company Eskom asked the country's largest industrial customers to cut their consumption by 10% during peak times to avoid unexpected blackouts and scheduled power cuts.

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