“The sub-saharan Africa is endowed with a production potential of solar electricity colossal, which should allow the region to meet its energy needs in a sustainable way,” says Hugo, The Picard, a researcher at the French Institute of international relations (Ifri) in an editorial published at the end of may. In 2017, 4.6 TWh (terawatt hours) of electricity from solar energy have been produced on the continent, so that its theoretical potential is estimated at more than 60 million TWh per year. In comparison, Asia has a theoretical potential of 37.5 million TWh/year, and Europe, only 3 million Twh/year.
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A potential under-exploited…
While Africa is largely under-equipped in terms of energy production, it has not yet taken the path of the catching up and the sun is only 2 % of its electricity mix. About 80 gigawatts (GW) installed, the photovoltaic energy represents only 1.5 GW. “Nearly half of Africans (600 million people) do not have access to electricity in 2018, and approximately 80 % of companies in sub-saharan Africa suffer from frequent outages, leading to significant economic losses,” stresses Arnaud Mullet, analyst Africa at the international energy Agency, on the blog of reflection ID4D hosted by the French development Agency (AFD).
…absence of investments
Yet, the winds blew on the area. The sharp decline in the costs of pv, the multiplication of funding supported by the donors of the funds and the appetite of the private sector for the solar projects would have been achieved by a greater use of solar energy. Unfortunately, the barriers and constraints remain relevant. “The challenge of solar in sub-saharan Africa is neither technological nor technical,” notes Hugo The Picard. “Unlike thermal power plants, almost all of the cost of a solar power plant is concentrated in the investment expenditure. The solar investment requires certainty of payment on the entire life of the plant, to be financed in favourable conditions, that is, for more than 25 years, ” he continued. However, the sector as a whole remains handicapped by a number of difficulties. Energy services remains inadequate and unreliable, even in more developed countries, such as South Africa.
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national society of electricity to defaulting
Among the principal obstacles to investment in solar, Hugo The Picard tip the poor financial health of the companies of electricity service in sub-saharan Africa. According to a world Bank study, out of 39 countries in the region, 12 countries had electrical areas, which covered not the half of their total costs and 18 covered even their operating costs. The list of technical and financial difficulties impressed : obsolescence of the networks of transport and distribution, lack of investments, maintenance, losses techniques online, but also flights due to connections in the wild, this is in addition to the unpaid bills by consumers.
Hugo The Picard describes, then, a vicious circle sets in : “The bad financial situation of these companies to lower maintenance capex. The quality of the services deteriorates, the frequency and duration of power cuts increases. This has a negative effect on the economies of the countries representing a cost ranging from 1% to 5% of the gross domestic product (GDP) national. More and more users refuse to pay for a service become mediocre, which to decrease more the income of electrical companies. “
This assessment of the vulnerability of the national companies of electricity is also shared by Benjamin Denis, head of project team, responsible for energy, the French development Agency (AFD). “In many sub-saharan African countries, the resources devoted to the strengthening of the operators and to the mitigation of risks of default are insufficient […] The fact of cash-flow difficulties are recurrent, it is not uncommon to see these electricity companies to pay their suppliers with a delay of one year “, he explains on the blog ID4D.
The deployment of the solar energy centralized is also limited by the absorptive capacity of the distribution networks. Most of the time, these are national companies who manage the distribution network and purchase electricity producers. In Kenya it is KPLC, Sénélec in Senegal or Zesco in Zambia. The producers of electricity, such as solar power, are dependent on a single customer. A default of the national society or a breach of contract gives rise to a major risk for independent power producers.
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Change of paradigm
” improving the financial sustainability of the national companies of electricity services is a sine qua non condition to enable the proliferation of solar energy projects by independent power producers “, advance Hugo The Picard. “Governments should now focus on improving the operational efficiency of the sector. This is to reduce the technical losses and non technical, to improve revenue collection, reduce the redundancy and increase the prices “, avance-t-il. It thus recommends the installation of solar plants close to cities to reduce line losses and installation of prepaid meters in order to avoid arrears.
For a simplified approach and coordinated
The pandemic of Covid-19 will have repercussions. The financial resources may dry up. The abrupt stop of the growth and potential currency depreciations are taken into account and will weigh on the cost of solar power plants. “It is necessary to clarify the roles of the different actors present in the sector in sub-saharan Africa to make the best use of the skills of everyone and ensure that funds are allocated effectively,” writes Hugo The Picard. It thus recommends that donors focus on the segments where the private sector may not invest, in particular in the networks, and to reserve the use of tenders to larger-scale projects (50 MW + ). For smaller projects, he cites, for example, the introduction of mechanism such as Feed-in-tariffs “. This mechanism allows you to set a buyback price of electricity calculated on the cost of production, providing to investors the profitability of their project.
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Still obstacles to be overcome
most of The purchase contracts are signed in us dollars, transferring foreign exchange risk to the national societies of power, which buy electricity in dollars for the producers and sell in local currency. “To avoid such a threat, it is essential to rely on risk management solutions and intensify the efforts in favour of the electricians and their networks,” said Benjamin Denis. Hugo The Picard invites also to its side on States to ” remove obstacles to private sector investment, which will have more than ever a key role to play “.
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