More renewable energy and reduce costs

Less than 10% of rural populations in Sub-Saharan Africa have access to electricity

Less than 10% of rural populations in Sub-Saharan Africa have access to electricity

Much has changed over the last ten years or so since the renewable power boom began. At the start of the boom, renewable power costs were very expensive and high quality developers were hard to find. Nowadays good core development expertise is available and capital costs have dropped dramatically.

Globally over the past five years, the  cost of energy has dropped by over 78% for solar and 58% for wind, driven largely by a decline in capital costs and technological improvements.

Global expertise, local execution

Some of the lesser developed power markets across Africa can benefit from global experience until the market is fully developed and world class talent can be found locally.

Companies like

  • BioTherm can help bring world class experience and partner with local companies.
  • Denham’s global solar platform Fotowatio Renewable Ventures (FRV) also brings solar development experience from Europe and the US to help drive the least cost solutions for Africa.
  • Endeavor is focused on thermal and hydro power developments, and brings global expertise to local markets. Endeavor is developing hydro projects on the continent

Mini-grids and grid expansion

The challenge is to create structures which match payback for the project to the realization of the user benefits, and which can capture those benefits to secure revenues for the project.

The issue in such cases is that too many of the factors which will make the project successful are outside the control of a generating business alone.

The project company has to expand its remit to ensure its output reaches end-users so that they achieve the economic benefits that enable them to pay.

In effect, the project company becomes the supply company, controlling and maintaining the local distribution network and putting in place tariff collection measures including, for example, pre-pay meters.

The mini-grid (or series of mini-grids) could comprise, for example, PV solar with a degree of backup generation, which if provided on a centralized basis within the mini-grid may prove more cost-effective than individual business- or household scale generating sets.

Mini-grid concession programs are already being developed in countries such as Senegal, Mali, and Kenya.

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