The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

Nigeria missing as South Africa propels Africa’s wind energy surge

Related

PHOTO: KAREN BLEIER / AFP/Getty Images


As Nigeria struggles to tap into renewable energy, especially wind, developments in South Africa and other Africa countries have turned 2018 to a record-breaking year for wind turbine manufacturers.

The developments, which formed the highlight of the ‘Africa Wind Power Market Outlook 2019,’ released yesterday by global think-thank, Wood Mackenzie, revealed that changes in policy in South Africa could make wind energy contribute as much as 10 gigawatts (GW) of additional wind power capacity by 2030.

This comes as Nigeria’s total electricity generation averages a mere 4000 megawatts (MW), as the sector is projected to run into bankruptcy under combined challenges, including financial crisis, and regulatory passivity.

Although the Nigerian Electricity Regulatory Commission (NERC), said it was committed to stimulating investment in renewable energy generation in Nigeria, with a target of generating a minimum of 2,000MW of electricity from renewables by the Year 2020, Wood Mackenzie’s outlook indicate that the plan could be a mirage.

While cumulative wind power capacity in Africa stood at 5.5GW as at the end of 2018, Nigeria did not account for a single wind power project despite many projects across the continent.“The 310MW Lake Turkana project, the largest single installation on the African continent, was connected to the grid in Kenya after a year-long grid construction delay. Nareva Holding built the 205MW Aftissat wind project, utilising SGRE turbines. Lastly, the New and Renewable Energy Authority (NREA) of Egypt commissioned the final segment of its Gulf of El-Zayt extension, adding 120MW of capacity in 2018,” the report noted.

In South Africa, approval of a long-pending power purchase agreement (PPAs) in April 2018, which helped independent power producers (IPPs) to announce final investment decisions (FID), according Wood Mackenzie Power & Renewables could enable the country add more than 1GW of capacity in 2020 and 2021.

“Africa’s most industrialised economy, South Africa, boasts its largest wind power market, with 2.1GW of operational capacity as of Q1 2019. Issues with governance that took place in 2016 and 2017 were bad news for the local wind market, as no new additions were recorded in 2018.”

However, installations are expected to recommence in 2019 with 130MW of new capacity additions on tap, though potential project delays jeopardise that capacity and limit any upside potential for additional capacity. Growth prospects improve thereafter, with more than 1GW of capacity expected in 2020 and 2021 combined. This outlook is supported by ongoing construction activity, peaking in 2020 as IPPs race to achieve commercial operations.

“Africa’s wind project pipeline stands at 18GW as of Q1 2019. The project realisation rate, however, remains low in the region due to a host of challenges faced by developers. As some governments took measures to address these issues, the regional market is expected to recover and grow exponentially between 2019 and 2021. This growth is underpinned by a five-fold increase year-on-year in turbine order intake in 2018 and 6.5GW of wind capacity in advanced stages of development. The scale of the development pipeline underlines the ability of the continent’s largest wind markets to grow in a sustained manner, providing a blueprint for emerging markets to tap their wind potential and fuel economic growth,” Senior Analyst at Wood Mackenzie Power & Renewables, Sohaib Malik said.

The report noted that inconsistent policy measures remained a historically plague to wind market growth in Africa, but added that the trend is beginning to change.“We are observing a growing momentum behind the development of long-term incentive mechanisms to support the regional wind market. Competitive procurement has proven to be the favoured tool of policy support, with South Africa and Morocco introducing auction programs in 2011 and 2015, respectively. Tunisia solicited bids for wind IPPs in 2017, while Kenya and Ethiopia are contemplating the launch of auctions for future installations.

These developments mirror global trends where competitive procurement regimes have resulted in lower tariffs in many countries. Notably, this trend may be less impactful in emerging markets, which are expected to grow by less than 800MW of capacity through 2028, as auction volumes may not be sufficient to draw the attention of global wind industry leaders,” stated Malik.


Receive News Alerts on Whatsapp: +2348136370421

No comments yet