The picture is very uneven, however: access is largely restricted to urban areas, while South Africa accounts for nearly half the consumption. In Mozambique and Tanzania, for example, more than 90% of households rely on firewood, charcoal and animal waste for their main energy source. Overall, installed power generation capacity for the whole of sub-Saharan Africa is under 40MW per million people, by far the lowest in the world. Even those who are connected experience frequent blackouts.
Inevitably, this energy poverty has a massive impact on the basic provision of health and education, on income generation, productivity and all aspects of daily life. Electricity is needed to power schools, refrigerate medicines, supply fresh water and, at a higher level, keep the wheels of business rolling. "Without energy, economies cannot grow and poverty cannot be reduced," says the World Bank. But most of these countries have little spare cash to invest in new capacity and many are, in any case, dependent on imported fossil fuels, which puts extra strain on national budgets.
Yet sub-Saharan Africa is not short of energy resources, especially renewables. So far, however, these remain largely untapped. It is estimated that as little as 10% of the potential hydropower and less than 1% of geothermal is currently exploited. Wind power lags even further behind, with just 29MW installed to date (see map). But better resource assessment in recent years reveals considerable potential, most notably round the coast from Ethiopia down to South Africa and up to Angola. Wind speeds at the site of Kenya's Lake Turkana wind power project average 11 metres per second (m/s), while those along the Namibian coast register a healthy 7 m/s.
The reasons why wind power has not been deployed more enthusiastically in sub-Saharan Africa are many and complex. Africa is raucously diverse, as Kofi Annan, former secretary-general of the United Nations, put it. From the deserts of Sudan and northern Kenya to the tropical rain forests of the Congo and the South African grasslands, these are markets with very different needs and capacities, and ones that defy easy answers. Where there is a good wind regime, the main barriers are likely to be the lack of a stable regulatory framework and sustainable support mechanism backed up by the rule of law. There may be political instability and concerns over the creditworthiness of the government or what is generally the state-owned utility. Basic infrastructure such as access roads and transmission lines are often lacking, and the best sites may be far from where the power is needed. Then there is the question of who will pay for it all and whether government is able - or willing - to entice private investors into the market to help shoulder the load, and to subsidise any feed-in tariff. Or it may simply be there are not yet sufficiently reliable wind measurements to give investors confidence.
Nevertheless, a number of governments are beginning to look more closely at wind power. They are driven by a whole range of factors, including concern over fuel costs and oil-price volatility, security of supply, chronic power deficits, the environmental impacts of climate change and the potential for job creation. Where wind is competing against imported diesel as a fuel for power generation, such as in Namibia, Cape Verde and Mozambique, cost is going to be a strong driver. South Africa needs lots of new, clean electricity quickly to maintain its economic growth: the country ranks among the world's top 20 greenhouse-gas emitters, yet has undertaken to reduce its emissions 42% by 2025. Countries such as Kenya, Tanzania and Ethiopia, which rely largely on hydropower but have been hit by prolonged droughts, want to diversify their generation mix (see box, next page). And throughout the sub-continent there are vast areas unlikely to get a grid connection any time soon. Instead, these communities could benefit from mini-grids linking small wind turbines with photovoltaic and biofuel generation, building from the bottom up, explains Hermann Oelsner, president of the African Wind Energy Association (see box, page 90).
"Africa needs new generating capacity that is clean, fast, competitive, independent and predictable, and wind meets all these requirements," sums up Andrew Hilton, vice president of communications at Vestas Central Europe, which opened a Johannesburg office in June.
South African springboard
South Africa is one of the few sub-Saharan markets where wind power shows real progress. Despite all its problems, the country already stands out for its relatively good infrastructure and broad industrial base. It is home to nearly half the region's generating capacity, over 90% of which is coal-fired. Nuclear and hydro provide most of the rest, with less than 1% from renewables. But there is urgent need for new capacity as the country's reserve margin has shrunk dangerously low and a crippling power deficit looms. While the government plans to build a massive clean-coal facility, supported by a loan from the World Bank, to help plug the gap, it is also targeting renewable energies. The goal is an annual 10GWh of green electricity by 2013. This will require at least 1GW of wind power, compared to just 10MW turning today.
To encourage investment, last year South Africa announced one of the world's most generous feed-in tariffs for wind power, set at ZAR1.25/kWh (EUR0.134/kWh) for 20 years (Windpower Monthly, May 2009). Though details, such as the terms of the power purchase agreement (PPA), are still being worked out, the news sparked a burst of activity. According to Oelsner, state utility Eskom has received applications from independent power producers to connect over 12GW of wind power. Investors are queuing up for good, well-structured projects, Oelsner says. Donor organisations are also keen to get involved. The World Bank, for example, is supporting Eskom's 100MW pilot utility-scale facility at Sere.
But Eskom is counting on the private sector to drive the market in the longer term. There seem to be no shortage of candidates ready to take up the challenge. Even in South Africa, with its own coal reserves, wind can compete with coal-fired production, argues Davin Chown, director of Ireland-based Mainstream Renewable Power's South Africa operation. Even the traditionally conservative economic development ministry puts coal and wind neck and neck, he adds. Then, if you do a full cost accounting, including things such as carbon emissions, fuel-price volatility and the benefits of local job creation, the case becomes clearer still. Water is also an important issue. According to Vestas, wind energy uses only one litre of water per MWh, compared to 2,000 litres for coal-fired generation.
With all this pent-up interest, once the PPA and other issues are resolved and projects become bankable, the market should really begin to take off - Oelsner predicts in the next 18 months. And many, including Vestas and Mainstream, believe South Africa will act as a catalyst for the rest of the sub-continent. Certainly it should have a positive impact on its 11 neighbours belonging to the South African Power Pool (SAPP). SAPP now offers day-ahead trading and has "taken a very clear position around a green market and green trading", says Chown. The long-term aim is to connect with the nascent West and East African power pools, giving a "very interesting signal", he adds.
While South Africa has struggled to get 10MW installed, however, Kenya has "leaped in, boots and all", Chown points out, referring to the 310MW Lake Turkana project (Windpower Monthly, March 2009). The Nairobi-based consortium developing the EUR560 million project hopes to reach financial close by the middle of the year, based on a mix of development bank loans and various equity partners yet to be finally confirmed, and to start building soon after.
The stakes are high. Plagued by a chronic power deficit and rocketing oil prices, Kenya desperately needs to find new sources of energy if it is to retain its position as a regional economic force. Wind power "is basically the only form of energy which can be implemented on a large scale within a very short period of time", argues Hilton. When complete, Lake Turkana will boost Kenya's generation capacity by almost 20%. And there is more in the offing, with at least another 300MW under development near Turkana, plus several smaller projects in the wings.
Premium purchase price
In addition to Kenya's favourable wind resource, some of this activity is being driven by the guaranteed premium purchase price for renewables introduced by the government in 2008. The recently revised tariff for wind now stands at $0.12/kWh for facilities up to 100MW for 20 years, for the first 300MW of cumulative capacity; rates for plants over 100MW are negotiated on a commercial basis.
In the case of Turkana, state utility Kenya Power and Lighting Company (KPLC) will buy the power at a fixed rate of $0.09/kWh. The project has been struggling to reach financial closure because of doubts over KPLC's ability to honour the letters of credit required by lenders. The situation may soon be resolved, however, as the government now plans to set up a $209 million escrow fund which should provide the necessary guarantees for KPLC's letters of credit.
Across the border, Ethiopia is planning over 760MW of wind power by 2013. The first 120MW is already under construction in the Tigray region by French turbine manufacturer Vergnet under a turnkey contract (Windpower Monthly, January 2009). In addition, the Ethiopian Electric Power Corporation (EEPCo) has signed a preliminary agreement with China's Hydrochina International Engineering Company to build two plants with a combined capacity of 100MW (Windpower Monthly, November 2009).
Again, the activity is driven by concerns over the cost of oil imports and security of supply, but Ethiopia also sees itself as a potential exporter, wheeling power south to Kenya and other members of the East African Power Pool.
A 500MW transmission line should be operational by 2015. One of the countries that stands to benefit is Tanzania, which badly needs to plug its energy deficit.
Nearly 500 kilometres off Africa's west coast, Cape Verde is targeting renewables in a big way. With imported diesel providing 97% of its power generation, the country now wants to capitalise on its outstanding wind regime to generate a thundering 50% from renewables by 2020. Abraao Lopes, Cape Verde's director general for energy, estimates that the country will save around EUR48,000 a year on its fuel bills for each megawatt of capacity installed.
The government is kicking off in grand style with a landmark project totalling around 28MW designed and financed by the donor-funded infrastructure development company InfraCo as part of a public-private partnership (Windpower Monthly, September 2010). When completed next year, the Cabeolica project will meet 25% of Cape Verde's power demand and demonstrate "how it is possible to reduce dependence on oil products in Africa", says Lopes. Interestingly, InfraCo induced the Africa Finance Corporation (AFC), a large Nigerian private equity house, to take an ownership stake, explains InfraCo chairman Keith Palmer. This is AFC's first foray into the wind sector.
Overall, Cape Verde looks set to play an important role in the West African region. It now hosts the Centre for Renewable Energy and Efficiency of the Economic Community of West African States (Ecowas). Among other things, the centre will focus on capacity building and promoting investment in the sector to help the region tap into its vast resources of renewable energy.
Already several other Ecowas members are getting into the game. In June, Senegal passed its first renewable energy law which, in part, aims to encourage private investment and allows for some sort of mechanism to cover the higher cost of generation from renewable energies. At the same time, French company Sarreole is moving closer to building a 125MW facility which, when completed, would represent around 15% of Senegal's installed generation capacity (Windpower Monthly, March 2010).
Even oil-rich Nigeria is eyeing renewables to alleviate future fuel shortages and ensure more equitable access to energy. When in 2007 Nigeria's three main ethnic groups started fighting for control over oil revenues, the energy minister called for more distributed energy projects to empower poor communities and improve internal security. The government is currently developing a feed-in tariff for off-grid and mini-grid systems in rural and semi-urban areas, and a renewable energy framework for independent power producers. The US Trade and Development Agency is providing technical assistance.
In the south, Namibia has an excellent wind resource but development is hampered by the lack of a legislation and the difficulties of securing a PPA with state utility NamPower. The project closest to the starting gate is for 40MW at Luderitz, where Dutch developer Aeolus Associated received the production licence back in 2007. Now, however, they are in the last phase of negotiating the PPA and could start building early next year, according to Aeolus CEO Leo van Gastel. Following on their heels, Electrawinds of Belgium has 90MW in the pipeline, while France's Innovent is making progress on the first 60MW of what could eventually be a 300MW project near Walvis Bay.
Lesotho, over towards the east coast, has to import electricity from South Africa and even Mozambique to supplement its struggling hydropower plant. Rather than expand its hydro generation, the government is now looking to wind power because of environmental concerns. NETGroup Solutions, a South African consultancy, hopes to start work on a 25MW pilot project later this year near the Letseng La Terai diamond mine in the northern highlands. The company is currently in talks with various banks to secure financing. All being well, however, the turbines could be turning by December 2012, bringing much needed power to yet another African economy.
HYDRO VERSUS WIND BY SHEM OIRERE
Despite the ostensibly huge potential of tropical sub-Saharan Africa to increase investment in hydropower, recent ravaging droughts and erratic rainfall have forced policy makers in some African countries to redraft their energy policies. This is with a view to exploring alternative sources of electricity generation, including geothermal and wind power.
Indeed, with limited budgets for the energy sector, some countries are faced with making a choice between hydro and wind. Comparing the cost of generating electricity from hydro sources is difficult, but Kenya's monopoly electricity generator, Kenya Electricity Generating Company (KenGen), says that it is generally cheaper to generate electricity from wind than hydropower. As with hydro, there is a considerable capital cost for wind: new turbines, the cost of grid connection, electrical installation and other auxiliary costs like road construction to wind farm sites. But wind power, KenGen says, is ultimately cheaper than hydro in the long run, due chiefly to its minimal operational and maintenance costs.
However, limited research to identify suitable sites with sufficient winds and reluctance by private investors to take a risk on what remains a nascent sector south of the Sahara have limited the exploitation of the resource. This has led to continued reliance on hydropower, despite the worsening meteorological conditions in the region which, in recent times, have weakened the sector's performance. Environmental concerns, too, have become an important social and financial cost of developing hydro. The inundation of land and wildlife habitats through the creation of water reservoirs and the displacement of people have sparked strong protests from environmentalists and opposition political parties across sub-Saharan Africa, leading to costly delays in construction of several hydropower plants.
Moreover, there is a growing feeling that hydro is not a power for the people. "Most often, large dams provide electricity for foreign-owned industries, water for foreign mining companies and irrigation for large-scale farms. Small-scale farmers, rural communities, and the poor are the last to benefit, not the first," says Lori Pottinger, head of southern Africa programmes at International Rivers.
HUGE BENEFITS FROM MICRO MACHINES
By Shem Oirere and Jan Dodd
On-grid generation through the use of micro turbines can bring large potential benefits to the developing world. Off-grid micro turbines can create power for water pumping and desalination. They can also create power for cooking, thus avoiding the burning of wood, which in turn reduces deforestation and the time spent collecting firewood. And power brings economic benefits by opening up remote regions to development, creating jobs and benefiting health.
Kenya plans to increase access to electricity in rural areas by at least 20% over the next year by focusing on the use of isolated grids through wind-diesel hybrid systems and off-grid community electricity and water pumping.
This is in addition to the expanding rural electrification programme that has so far received $115 million in funding from central government for the implementation of 1,330 projects aimed at lighting rural Kenya.
Although the installation of wind turbines in Kenya remains marginal, the country currently has installed capacity of 750kW, which includes 150kW of small, isolated wind turbines and 600kW of medium-sized grid-connected wind turbines sited at Ngong Hills near the capital Nairobi and Marsabit in the country's North Eastern province.
Kenya does have some big wind. Kenya Electricity Generating Company (KenGen) already has an installed wind power capacity of 5.1MW at Ngong Hills and is implementing a second phase of the 10MW wind power project after receiving $25 million from the world's fourth-biggest wind power producer, Spain. KenGen's initiatives, however, are aimed at harnessing wind energy for the country's national grid.
But there are scores more machines in operation which generate their own off-grid power for their own communities.
The electricity generator says there are 80 to 100 small wind turbines each producing 400W as part of a solar photovoltaic-wind hybrid system with battery storage for use by a few businesses across rural Kenya. Hermann Oelsen, president of the Africa Wind Energy Association, says: "Even where strong national grids are not in place, wind energy lends itself to the creation of mini-grids and small-scale use. In light of the fact that the majority of the African population still has no access to electricity grids, small, decentralised and stand-alone wind energy systems, in combination with other renewable energies, will have to play a key role."
A recent report by GTZ, an international cooperation enterprise for sustainable development, says that about 25% of the country is expected to be compatible with current wind technology.
However, the development and use of wind power in isolated communities has been hindered by inadequate knowledge of Kenya's wind resource and the inability to accurately identify sites that might be suitable.