Solar Powering Africa Markets, Fi Nance, Technology
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APRIL 2017 Platinum sponsor SPECIAL REPORT Solar powering Africa Markets, fi nance, technology Large Off grid Finance Logistics scale Solar’s growing Bridging the Planning, building role beyond investment gap in and operating Africa’s the grid commercial and successful PV utility solar industrial solar projects in Africa hotspots Solar Powering Africa Introduction Published by Solar Media Ltd. 3rd Floor, America House, This PV Tech Power special report is a unique industry as it seeks new opportunities in the region, and which 2 America Square, resource exploring the trends shaping the fortunes of are explored in depth in this report. London, EC3N 2LU, UK Tel: +44 (0) 207 871 0122 PV in Sub-Saharan Africa, a region that harbours some On p.8 we look at the progress made in the large- www.pv-tech.org of the world’s most promising emerging solar markets. scale segment and why West Africa is emerging as a Editorial Since we fi rst published the report last year, the region particular hotspot for utility solar projects. On p.12 we Head of content: has notched up a number of signifi cant milestones, look at the commercial and industrial sector, with a John Parnell including the completion of new utility-scale plants in particular focus on the new business models emerging Supplement editor: Ben Willis Senegal and Uganda, a price-busting auction in Zambia to support it. Off -grid and mini-grid applications come Reporters: and the signing of a bundle of signifi cant PPAs. under the microscope on pages 15 and 18, and on p.22 Tom Kenning, Danielle Ola There has been progress too in the commercial and we explore some of the innovative solutions being Design & production industrial space, with Kenya seeing its largest indus- developed to aid the planning, building and operating Design and production manager: trial PV hybrid plant reach completion. Meanwhile, in of PV plants in Africa. Sarah-Jane Lee Production: the off -grid and isolated-grid space PV is enjoying an The overall message is that solar is only just at the Daniel Brown increasingly prominent role as a key plank in eff orts to beginning of its journey in Africa. But bearing in mind Advertising achieve universal energy access in what has historically the progress that has been made since this time last Sales director: been the world’s most power-starved region. year, only the silly money would be against the region David Evans But many of the problems that have prevented having made several further leaps forward 12 months Account managers: Matthew Bosnjak, Graham Davie, Lili Zhu solar fully taking off in Sub-Saharan Africa still remain. from now. Investment bottlenecks, political and regulatory uncer- Printed by tainty and diffi cult operating conditions are just some John Parnell Buxton Press Ltd., Derbyshire of the challenges the solar industry continues to face Head of content This special report is a supplement to the quarterly journal, PV Tech Power, ISSN: 2057-438X While every eff ort has been made to ensure the accuracy of the contents of this supplement, the publisher will accept no CONTENTS responsibility for any errors, or opinion expressed, or omissions, or for any loss or damage, consequential or otherwise, suff ered as a result of any material here published. Falling costs pave the way for African solar boom The entire contents of this publication are 04-05 protected by copyright, full details of which The improving economics of solar in Africa are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system 06-07 Simple is best in Africa’s challenging conditions or transmitted in any form or by any means – electronic, mechanical, photocopying, An interview with Platinum Sponsor, Huawei recording or otherwise – without the prior permission of the copyright owner. 08-10 Utility solar finally on the African map 04 Cover image: A solar micro-grid provides The steady advance of large-scale PV power to a town in the Masai Mara region of Kenya. Photo courtesy of SunFunder 12-14 Bridging the finance gap Emerging business models for commerical and industrial PV 15-17 Beyond the grid Advances in off-grid and mini-grid PV Brands of Solar Media: 18-19 Ghana turns to mini-grids for electrification of isolated rural areas 08 Inside a model solar- and wind-powered mini-grid 20-21 Solar systems installed in harsh climatic condition require a new set of testing protocols Sponsor content by DuPont 22-24 Plan, build, operate Succesfully executing projects in Sub-Saharan Africa 12 26 ad index www.pv-tech.org | April 2017 | 3 Solar Powering Africa Credit: Scatec Solar Scatec Credit: Falling costs pave the way for African solar boom Markets | The steadily improving economics of solar have made its case in Sub-Saharan Africa unassailable. But with regulation and investment still playing catch up, policy makers and industry have a job on their hands to take it to the next level, writes Ben Willis he theoretical potential of solar significant projects hitting the ground Sub-Saharan Falling costs power in Sub-Saharan Africa has and new players entering the scene. The Africa is better Nowhere has the fall in costs been more placed than ever rarely been in doubt. Some 600 most recent figures from the International apparent than in the utility-scale segment. T to capitalise on million people on the continent lack access Renewable Energy Agency (IRENA) suggest the opportunities Here, South Africa is held up as the role to electricity, with many more served by that total installed capacity in Africa offered by solar model, and the chart in Figure 1 shows only sporadic and often costly power. With jumped from around 500MW in 2013 to how steeply that country’s successful centralised grid infrastructure unlikely around 2,100MW at the end of 2015. independent power producer programme to reach some communities any time “In recent years, solar PV costs have drove down the prices being bid for utility soon, the ease of deploying PV coupled dropped dramatically and will continue to PV over a relatively short space of time. with Africa’s rich solar resources make it do so with further declines of up to 59% For several years South Africa was the only an attractive technology in unelectrified possible in the next 10 years,” said the utility PV market of note in Sub-Saharan areas. For countries looking to bolster the International Renewable Energy Agency’s Africa. But then in mid-2016 Zambia came capacity of their grids to keep up with (IRENA) director-general Adnan Amin to out of nowhere with a record-breaking burgeoning demand, meanwhile, utility mark the publication of a report towards tender price for Africa of around US$0.06 solar looks like an increasingly cost-effec- the end of last year looking at the costs per kilowatt hour, suggesting that other tive solution. of solar in Africa. “These cost reductions, countries have been watching and learning, Indeed, it is PV’s consistently downwards coupled with vast solar potential on the and the industry is doing its bit to educate cost trajectory that has helped it chip continent, present a huge opportunity for decision makers about what it can offer if away at some of the many hurdles it has Africa. Both grid-connected and off-grid given the right conditions to take root. faced in gaining a toehold in Africa and solar PV now offer a cost-competitive Several further tenders are expected begin to realise some of its huge promise means to meet rising energy needs and in the region soon, indicating that utility in the region. Falling costs across the bring electricity to the 600 million Africans PV has now passed the proof-of-concept board have been the main factor behind who currently lack access. It has never phase in this part of the world and is a marked shift in the narrative of solar in been more possible, and less expensive for gradually reaching if not maturity perhaps, Africa even over the past two years, with Africa to realise this potential.” then certainly a wider level of acceptance. 4 | April 2017 | www.pv-tech.org Solar Powering Africa According to IRENA, in 2015-2016 the cost Figure 1. African range for utility PV in Sub-Saharan Africa utility solar auction prices in a is anticipated to be US$1.3-1.4 per watt. global context “If the projects targeting US$1.3/W in installed costs can be built to budget, this would represent a very competitive level for Africa, given the estimated worldwide weighted average for utility-scale projects of US$1.8/W in 2015,” IRENA said. The picture is less clear for smaller off-grid and decentralised systems due to the paucity of available data but appears to be positive. Figures show a wide variance across the region in the range IRENA Credit: of prices for such systems depending on location and the technology: sub-1kW There have also been some targeted governments, regulators, finance and home systems can cost anywhere efforts to support the take-up of solar in development institutions, and of course the between US$4 and US$16/W, more if they the region, which are now starting to bear solar industry itself. It would probably be include batteries; systems above 1kW cost fruit. One key intervention that looks likely fair to say that so far supportive policies to in the range of US$2.5-7/W. But according to play a continuing role in the utility-scale help solar grow have been relatively slow to IRENA, small stand-alone solar systems market is the International Finance Corpora- to come forward in Sub-Saharan Africa, or providing power for individual house- tion’s Scaling Solar programme.