Prospects for Investment in Large-Scale, Grid-Connected Solar Power in Africa
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Downloaded from orbit.dtu.dk on: Oct 06, 2021 Prospects for investment in large-scale, grid-connected solar power in Africa Hansen, Ulrich Elmer; Nygaard, Ivan; Pedersen, Mathilde Brix Publication date: 2014 Document Version Publisher's PDF, also known as Version of record Link back to DTU Orbit Citation (APA): Hansen, U. E., Nygaard, I., & Pedersen, M. B. (2014). Prospects for investment in large-scale, grid-connected solar power in Africa. UNEP Risø Centre, Technical University of Denmark. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. Users may download and print one copy of any publication from the public portal for the purpose of private study or research. You may not further distribute the material or use it for any profit-making activity or commercial gain You may freely distribute the URL identifying the publication in the public portal If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Prospects for investment in large-scale, grid-connected solar power in Africa Lang, M. & Mutschler, U., 2013. German Feed-in Tariffs of the Solar Energy Markets in Kenya and Tanzania, 2013. Available at: http://www.germanenergyblog. Working paper. University of Hamburg. de/?page_id=14068. Parnell, J., 2013. Ugandan government signs deal for Lemaire, X., 2011. Off-grid electrification with solar 500MW of solar power. PV tech Magazine, 13. No- home systems: The experience of a fee-for-service vember. Available at: http://www.pv-tech.org/news/ concession in South Africa. Energy for Sustain- ugandan_government_signs_deal_for_500mw_of_ able Development, 15(3), pp.277–283. Available solar_power. at: http://linkinghub.elsevier.com/retrieve/pii/ Prasad, G., 2007. Electricity from solar home systems in S0973082611000512 [Accessed June 4, 2014]. South Africa, Cape Town: University of Cape Town. Mbogo, S., 2013. Largest solar plant in EA to be Available at: http://www.erc.uct.ac.za/Research/ opened in Kenya. The East African. Available at: publications/07Prasad Electricity from SHSsl.pdf. http://www.theeastafrican.co.ke/business/Larg- PURC, 2013. Publication of Feed-in-Tariffs for electric- est-solar-plant-in-EA-to-be-opened-in-Kenya-/- ity generated from renewable energy resources, /2560/1920704/-/1jjuo6/-/index.html. Public Utilities Regulatory Commission. Avail- ME, 2012. Feed-in-tariffs policy on wind , biomass able at: http://www.giz.de/fachexpertise/down- , small-hydro , geothermal , biogas and solar loads/2013-en-ghana-gazetted-fit.PDF. resource generated electricity, Nairobi, Kenya: PVInsider, 2014. PV vs CSP: which technology will prevail Ministry of Energy (ME). in the South African energy mix? PV Insider/CSP Meza, E., 2013. Special Report Africa : Kenya. PV mag- Today. Available at: http://www.pv-insider.com/afri- azine. Available at: http://www.pv-magazine.com/ ca/pdf/SouthAfricaCSPvsPV.pdf. news/details/beitrag/special-report-africa--ken- Ramboll, 2012. Renewable energy resource potential in ya_100013508/#axzz2yN8PFzyZ [Accessed April Kenya, Consultancy report prepared for the Minstry 8, 2014]. of Energy in Kenya. AUTHORS Mints, P., 2013. Solar PV Profit ’ s Last Stand. Renew- REN21, 2013. RenewableS 2013. GLOBAL STATUS RE- Ulrich Elmer Hansen, Ivan Nygaard, and Mathilde Brix ableEnergyWorld.com, March 2013. Available at: PORT 2013, Renewable Energy Policy Network for Pedersen. UNEP Risø Centre, Department of Management http://www.renewableenergyworld.com/rea/news/ the 21st Century. Available at: http://www.ren21. Engineering, Technical University of Denmark, UN City, article/2013/03/solar-pv-profits-last-stand. net/Portals/0/documents/Resources/GSR/2013/ Marmorvej 51, 2100 Copenhagen Ø, Denmark. MME, 2014. Points des secteurs de l’energie et des GSR2013_lowres.pdf. mines, Ouagadougou: Ministère des Mines et de Reuters, 2014. Rwanda signs $30 mln deal for 10 UNEP Risø Centre, Denmark l’Energie, Burkina Faso. MW solar energy plant. Available at: http:// Nygaard, I. et al., 2012. Screening of feasible applications af.reuters.com/article/rwandaNews/idAFL- June 2014 of wind and solar in Mali: Assessment using the 6N0O22GK20140516. wind and solar maps for Mali, UNEP Ris� Centre, Richts, C., 2012. The Moroccan Solar Plan - A compar- UNEP Risø Centre Technical University of Denmark (www.frsemali.org). ative analysis of CSP and PV utilization until 2020. Marmorvej 51, 2100 Copenhagen Ø Available at: www.frsemali.org. Master Thesis. University of Kassel. Denmark Olson, S., 2012. Masdar prepares to build 15MW solar Terzic, B., 2012. Energy Independence and Security: A plant in Mauritania. Available at: http://www.pv- Reality Check. Available at: http://dupress.com/ ISBN: 978-87-93130-08-1 tech.org/news/masdar_prepares_to_build_15mw_ articles/energy-independence/. solar_plant_in_mauritania. Willis, B., 2014. Kenya’s FiT-approved solar pipeline Graphic design: Phoenix Design Aid A/S, Denmark Ondraczek, J., 2013. The sun rises in the east (of Africa): reaches 750MW. Available at: http://www.pv-tech. a comparison of the development and status of so- org/news/kenyas_fit_approved_solar_pipeline_ Photo credits: ABB, Longmeadow Campus Johannesburg, lar energy markets in Kenya and Tanzania. Energy reaches_750mw. South Africa, Morocco – large PV site, Flickr accounts. Policy, 56, pp.407–417. Woods, L., 2013. MoU agreed for 50MW Kenya PV Ondraczek, J., 2011. The Sun Rises in the East (of Afri- project. Available at: http://www.pv-tech.org/news/ The findings, interpretations and conclusions expressed in ca): A Comparison of the Development and Status kenya_signs_mou_for_50mw_with_canadian_con- this report are entirely those of the authors and should not sortium. be attributed in any manner to UNEP. 21 PAGE ABSTRACT Solar power in Africa is on its way to becoming a production costs are today competitive with large-scale market-based commodity, thus escaping the niche for diesel, this market is rapidly emerging. Donor-influenced individual electricity supply that is mainly supported by plans and visions for solar PV development have often international donor organisations. Significant reduc- been optimistic with regard to the diffusion of solar tions in the cost of photovoltaic (PV) panels and a 400 PV in Africa, but the last three years of development, percent increase in oil prices since the 1990s have in terms of a number of large-scale investments in changed the competiveness of solar PV in all markets, grid-connected solar power plants and local assembly ranging from individual households via institutions to mi- facilities for PV panels, have exceeded even optimistic ni-grids and grid-connected installations. In volume and scenarios. Finally, therefore, there seem to be bright investment, the market for large-scale grid-connected prospects for investment in large-scale grid-connected solar power plants is by far the most important, and as solar power in Africa. 1 PAGE 1INTRODUCTION We are currently observing a shift in the African PV Hence although large-scale and market-driven invest- sector away from mainly donor-driven projects towards ments in renewable energy and local industry develop- market-driven investments in PV in all market segments. ment in a high-tech sector is not something one typically This transition is stimulated on the one hand by rising associates with Africa, this is nevertheless what we are oil prices and a substantial reduction in the cost of PV seeing emerge in the case of solar power. While this situ- panels during the last decade, which has significantly ation is exciting from a policy and investment perspec- improved the competitiveness of PV, and on the other tive, a coherent overview of the market for grid-connect- hand by conducive enabling frameworks comprising in- ed solar power plants in Africa is currently not available. novative financing schemes, exemptions from VAT and Therefore, in this paper we attempt to provide a system- import taxes, standardised power-purchasing agree- atic overview of the prospects for and recent investments ments and feed-in tariffs. In particular, the market for in large-scale, grid-connected solar power in Africa, large-scale, grid-connected PV plants is rapidly emerg- based on reports from governments, international finance ing throughout Africa, as production costs are currently institutions and research centres, and supplemented by competitive with large-scale diesel. This development the latest media reports from the internet. towards the market-based diffusion of PV therefore also marks a movement from mainly small-scale and off-grid The paper is structured as follows. Section 2 provides PV installations to larger scale grid-connected PV with a background description of the power infrastructure in increased capital intensity (Hansen et al. 2014). In paral- Africa. Section 3 explains developments in the mar- lel with this movement, a market for another large scale kets and prices for PV modules, followed in Section 4 solar power technology, concentrating solar power by examples of recent policies and government plans (CSP) has been developed especially in Spain, but also for supporting large-scale solar power in a number of lately in South Africa and Morocco, with the effect that African countries. Section 5 describes