Challenged renewable energy sector growing rapidly in Africa

The renewable-energy sector has grown rapidly in the last four years and has delivered over 5 000 MW in South Africa alone, owing to the completion of about 80 renewable-energy projects, says financial services company Thomson Reuters.

“Renewables will receive considerable attention at African Utility Week and in Africa’s energy sector in the future. This is a topic that must be discussed as other kinds of projects like coal-fired generation have not delivered anywhere near that much in the last four years,” says Thomson Reuters Africa market development head Robert Fish.

He adds that renewables projects are much smaller and most often community based, with energy sales spurring economic growth in communities and contributing to employment, education and healthcare.

Fish further points out that North Africa has more investments and far more projects than Southern Africa, while Kenya, in East Africa, will have over R2-billion in renewables infrastructure investment by 2020 coming from Asia.

Although renewables projects are looking attractive from an investor perspective and are “probably going to be the future”, he warns that a balanced combination of traditional energy sources is needed to ensure that Africa meets its energy production targets.

South Africa, for instance, currently produces about 34 000 MW/d and consumes 28 000 MW/d. Fish says the country does have energy in reserve, but this is not enough.

“South Africa must build the equivalent of a third of its current power plants by 2030 to meet production estimates. A quarter of the quota has already been met with renewable-energy projects. This is not bad, considering South Africa’s highly politicised energy sector.”

Moreover, he says, South Africa’s downgrade to ‘junk’ status is going to have a financial impact on the South African power sector but, more importantly, poor governance decisions are going to delay the process of “getting renewable megawatts out there”.

“Consumers are in the middle of decisions regarding independent power producers in terms of legislation,” concludes Fish.