In common with many businesses in rural Africa, the cost of energy is one of the most significant outlays for the farms operated by Williamson Tea, a publicly listed company in Kenya. Not, it seems for much longer.
Project name: Williamson Tea solar park
Location: Changoi, Bomet County, Kenya
Annual generation: 1,600,000 kWh
Completed: May 2014
In May this year, local developers Azimuth Power and East African Solar, and international solar company Solarcentury, completed a 1MW PV installation at the farm that is expected to meet around 30% of its power needs.
“Williamson was keen not only to reduce their energy costs, but also to hit a few corporate social responsibility buttons at the same time,” says George Bowman, co-founder and director of Azimuth. “Solar also offers attractive investment deductions, so if, like Williamson, you have quite a large tax bill, investment in this type of technology makes a lot of sense from a tax perspective.”
Although Changoi is in a remote part of western Kenya, it is connected to Kenya Power’s grid. But that grid is relatively weak and the power it supplies unreliable, not to mention expensive. The farm has a back-up generator to provide power during outages, but with the cost of diesel-generated power running at up to US$0.3/kWh, the bill quickly adds up.
The objectives of the system, therefore, were twofold: reduce the amount of power the factory draws from the grid during the day and to work alongside the diesel generator during outages, thereby reducing the amount of expensive diesel it has to burn to keep the factory operating.
“The basic system Williamson had before was that if the grid fell over, someone threw a big switch and started up the generator to run the factory,” explains Dan Davies, Solarcentury’s East Africa manager.
“The concept we put to them was that you can use solar in the straight grid mode and save possibly US$0.2/kWh. And if the power goes off, you can also use the solar in parallel with your diesel generator. If you’re relying on the generator for 15% of your power, but that power is costing you double the power you get from the grid, then the economics start to look even better.”
Davies says only a handful of such projects has ever been built in the world. The brain of the system is a ‘Fuel Save’ unit supplied by Germany’s SMA Solar, which controls the output from the PV array to follow the load of the factory and maintain a stable supply. A key consideration was that the generator should always operate at or above its pre-defined minimum output, Davies says, below which it could be damaged. So if the generator is running, it’s a particularly sunny day and the factory load goes down, the control system turns the inverter off, allowing the generator to run at its safe minimum output level.
Incorporating such a sophisticated piece of technology into the system presented a number of challenges, Davies says: “The hardest thing was because we were in a remote area, we needed to have a decent internet connection to monitor the system and so that when we were commissioning it the support technicians from SMA in Germany could to get access to the system and set it up correctly. And that was a little bit of effort involved just to get a decent internet connection on the site.”
A further challenge was getting properly qualified technicians physically to the site to set the system up. “When you’re building a specialist system, you need specialist people to install it, and they’re not available in-country, so we had to fly in technicians,” Davies says. “So scheduling people’s work, when you’ve got a technician who needs to be in Cornwall one minute and then remote western Kenya the next, that’s another challenge."
“But we’re hopefully signing another contract for a similar system soon, so once you start building up volume, it makes sense for the technicians we’ve got here to go on training courses so we can build local capability.”
Bowman says another general problem with PV development in Kenya is obtaining connection agreements from the off-taker, Kenya Power. The utility’s immediate reaction to distributed PV projects is that they are taking away customers, resulting in some initial resistance.
“You have to be basically persistent and keep badgering them,” he says. “But they’re coming round to the idea and being more supportive in that they’re realising they’ve got grand aims to produce 5GW of extra generation in the next 40 months, and that actually the commercial sector providing some of that will be no bad thing. In addition to which, when we’re putting power on to the grid in remote areas, we’re actually reinforcing what is actually a quite overused and weak grid.”
While utility-scale PV installations are struggling to gain any traction under Kenya’s feed-in tariff, commercial projects such as this, designed for own consumption and built free of any tariffs, are showing real promise. Guy Lawrence, chief executive of East African Solar, points out that with a relatively low feed-in tariff on offer in Kenya, distributed generation projects such as this, which offset the high Kenya Power tariffs, allow relatively short payback times of around five to seven years, whereas for FiT projects payback would take over 10 years.
Bowman is careful not to get too overexcited over the prospects for distributed solar in Kenya: “What’s interesting is that a six to seven-year payback in the UK would be considered a fantastic return on investment, but we’re finding that a lot of businesses out here have a much shorter horizon – and they might be looking for a two to three year payback on investment in projects. So while it’s a good market, there are some problems, because a lot of businesses don’t view a six to seven-year payback as a good payback.”
Nevertheless, he says Azimuth is exploring other projects in Kenya and other parts of East Africa, including Tanzania. “We see the whole of East Africa as a pretty exciting place,” he says. “We’ve got a very healthy pipeline of projects in the commercial space, so things are looking good.”