In the last five years, deployment of utility-scale PV power stations has increased explosively, to become the fastest-growing sector of the solar industry. Wiki-Solar founder Philip Wolfe explains how Africa is starting to emerge as a player in the generation of mainstream solar power
While rooftop and off-grid applications of solar photovoltaics are widely recognised, the generation of bulk power is still relatively new. Yet this sector has become the main driver of growth in the global solar business, especially as other segments have subsided in recent years.
The worldwide installed capacity of 10MW-plus PV plants is likely to reach 20GWp by the end of the year. This represents a compound annual growth rate of over 75% since 2008. With an additional 40GWp of projects in the development pipeline, we can expect this expansion to continue.
Europe was in the vanguard of these developments up until to 2011, since when North America and Asia have made giant strides. Wiki-Solar’s analysis of the global utility-scale solar market shows that the majority of the current global capacity of 17.5GWp is divided between these three continents.
However, if you also include projects in development, (see Figure 2b), it looks as though South America and Africa are preparing to join the first division.
Drivers for utility-scale solar power
Much of the early deployment of megawatt-scale solar was stimulated by national and international incentives such as feed-in tariffs, Renewable Portfolio Standards and the Clean Development Mechanism. These succeeded in increasing global volumes, so solar manufacturers were able to drive prices down. This in turn has made solar electricity more cost-effective in relation to traditional sources of generation, and subsidy levels have been progressively reduced
While incentives are still important in some markets, PV is now becoming a commercially competitive option, especially in locations with good sunlight levels, high electricity costs, and traditional power shortages. In some regions solar power can compete without subsidy; in others it is the key to a reliable electricity supply to meet growing energy demands.
In key South American markets, for example, solar has reached what the industry calls ‘grid parity’ and utility-scale solar projects are being developed without subsidies. At the same time, rapidly developing regions in India and other countries are turning to solar power to meet their growing energy requirement and improve security of supply. There are indications that similar drivers apply to markets throughout Africa.
Utility-scale solar installed in Africa
The first utility-scale solar plants in the continent were installed in Réunion and Cape Verde in 2010 with an overall capacity of about 20MWp. The first commissioned project on the mainland was the 15MWp installation by Abu Dhabi’s Masdar in Mauritania in April 2013.
Because of the relatively early stage of development of the African market, regional figures in this report include projects of 5MWp and over, as distinct from the 10MWp threshold used in Wiki-Solar's global figures in Figure 1.
The largest system completed to date is the 75MWp system, commissioned in September by Scatec at Kalkbult in South Africa’s Northern Cape. This project is the first large-scale installation to be completed under the under South Africa's catchily named Renewable Energy Independent Power Producers Procurement Programme (REIPPP).
Projects in development in Africa
Several other plants within round one of the REIPPP are under construction; expected to contribute a further 450MWp of capacity by mid-2014. When all projects are completed this round should deliver 632MW AC (equivalent to maybe 728MWp, the rated DC capacity of the arrays). REIPPP round two approved a further 417MW (around 487MWp) of capacity, and 450MW is reported to have been recently selected from bids for round three, which closed in August. These figures are not included in any of the charts in this article.
While South Africa leads the continent in installed hardware on the ground, many other countries have solar capacity in development. Most of the leading East African countries have announced plans to develop projects on a scale between 30MW and 120MWp.
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In West Africa a 155MWp project has been consented in Ghana for British developers Blue Energy. It will feed power into the transmission line between Ghana and Côte d'Ivoire. A bilateral programme between Nigeria and Germany intends to develop initially 420MW of capacity divided between nine northern Nigerian states.
In North Africa, projects are in development in Libya and Egypt. Projects in north-west Africa had mainly been linked to the Desertec project, which appears to have stalled at the moment.
The latest development to be announced in the continent is Swaziland's 100MW project near Manzini. This could substantially enhance the country's security of supply, contributing up to 15% of its energy, according to recent reports (some of which said 50%, though this figure is probably wrong based on Swaziland’s published electricity consumption).
Solar power station technology
Hardware solutions adopted in African solar power stations mirror those in the leading Asian markets. Polycrystalline silicon technology is most widely used. Apart from the plant in Mauritania, thin-film cells have yet to enter the utility-scale market, though they are commonly used in off grid systems in East Africa, for example.
Free-field projects typically adopt a North-South fixed tilt mounting structure. Theoretically, the solar regime and proximity to the equator would favour single-axis tracking. After the first projects are completed, and operations and maintenance expertise has built up, I would expect to see some developers move towards one-axis trackers.
Most project designs have adopted centralised inverters of 500kW-plus, and there is no reason to expect a move towards string inverters.
Leading market participants
It appears that much of the project definition is undertaken by partnerships between local enterprises and experienced developers from more established markets. International players with the largest pipelines include Norway’s Scatec, SunEdison of the USA, Ireland’s Mainstream Renewables, Thompson Cole and Blue Energy from the UK.
Engineering, procurement and construction (EPC) contracts, similarly, are being awarded mainly to participants from Germany, Spain, Ireland and India with an established international track record. South Africa’s Aveng, WBHO and Kensani are also active. In most other cases, local companies are used as subcontractors; and this will nurture an experience base capable of assuming full EPC responsibilities in the future.
There is no sign that the established electricity utilities have yet become involved in developing their own solar projects. Eskom and others are, however, playing an active and supportive role through their collaboration over grid connections.
In common with most world markets, the majority of crystalline solar modules are sourced from China and the Far East. Inverter supply, too, favours established producers, mostly in Europe.
Information on the financial structure of projects remains sketchy, but seems to be similar to other free-market economies. The eventual plant owner or independent power producer (IPP) provides the equity, typically around 30% of the project costs. Local IPPs often seek to spread the equity investment; so overseas investors are already active with, for example, Google investing US$10 million in one of the REIPPP round two projects.
The balance of capital required comes from debt financing, sometimes supplemented by grants from the host country. National and international development banks, notably the Development Bank of Southern Africa, have been involved in providing debt. The region's leading commercial banks, including Standard, FirstRand, Old Mutual, Investec and NedBank, have also been active participants.
Incentive mechanisms also enhance the financial returns of solar power projects in Africa. Most existing projects are participants in the UNFCCC’s Clean Development Mechanism, allowing them to sell the benefit of their emissions savings. Feed-in tariffs are being adopted in Ghana, for example, while South Africa supports the power price through the bidding mechanism under the REIPPP.
The potential for utility-scale solar in Africa
Much of Africa enjoys an environment that is particularly favourable to solar power generation: good sunlight levels, unreliable electricity supplies and high energy costs. The continent has the opportunity to leapfrog directly to a reliable and renewable energy system; missing out the interim fossil-fuel step that is now such a millstone for other parts of the world.
It is crucial that the pioneering projects now being installed provide good service, and adequate returns to their investors. That will ensure that more capital will be available, so Africa can achieve its rightful place amongst the top adopters of mainstream solar power generation.
Solar & Off-Grid Renewables Africa 2014
With some of the world’s fastest growing economies but lowest electrification rates, the African continent has huge potential for renewable energy forms such as solar. Indeed, some countries are already beginning to take notice of the opportunities renewable energy offers, with Kenya setting a target of almost 19GW of PV capacity by 2030. Organised by Solar Business Focus publisher Solar Media, Africa Solar & Off-Grid Renewables is a two-day event aimed at showcasing the exciting East Africa region offering top-class networking opportunities for existing and prospective industry players. The programme will feature contributions from leading figures, including Davis Chirchir, Kenya’s cabinet secretary for energy, Isaac Kiva, director of renewable energy at Kenya’s Ministry of Energy and Guy Lawrence, chief executive of East Africa Solar. Topics under discussion include the policy environment for solar and other renewables in East Africa and methods for accessing project finance.
Solar & Off-Grid Renewables Africa will be held on 4 and 5 March 2014 at the Sarova Panafric Hotel in the Kenyan capital, Nairobi.
Further information is available at http://africa.solarenergyevents.com/