African wind power is struggling to gain momentum

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Africa has a gaping hole in its energy supply. Six hundred million people, or about half of the continent’s population, do not have access to electricity. Without much faster progress, the continent will miss the Sustainable Development Goal (SDG 7) of achieve universal access to electricity by 2030.

There are clear benefits to bridging Africa’s electricity deficit by using renewable energy, including wind power. In addition to climate benefits, onshore and offshore wind is increasingly able to provide energy at lower cost than fossil fuels.

According to the International Renewable Energy Agency, nearly two-thirds of new renewable energy capacity installed in 2020 generated electricity cheaper than would have been available from the cheapest fossil fuel alternative. Dear. The cost benefits have since become even more significant, due to the massive increase in gas costs over the past year.

Africa is endowed with abundant wind resources. Research commissioned for the IFC in 2020 found that the continent’s wind resources could supply 250 times its electricity demand. “It’s only recently that we realized what a good wind resource sub-Saharan Africa is,” says Linda Munyengeterwa, regional industry director for infrastructure in Africa at IFC.

“In many parts of the continent, the wind tends to blow stronger at night and early in the morning,” she adds. “It’s very complementary to solar which only generates during the day.”

Yet progress in harnessing wind energy has been limited. The Global Wind Energy Council notes that Africa only uses 0.01% of the 59,000 gigawatts (GW) that the IFC says are available on the continent. And according to data released by IRENA in April, only three African countries – Egypt, Morocco and South Africa – have installed more than 1 GW of wind capacity.

Logistics headwinds

“The development of a wind farm is much more complicated and expensive than that of a solar power plant,” says Vuyo Ntoi, co-managing director at African Infrastructure Investment Managers. Before developers can begin installing wind turbines in the ground, they must collect data on the wind resources available at a potential site. This can be an expensive and time-consuming process.

“For solar, short-term irradiation data can be easily purchased (at low cost) and used, while for a wind farm, a longer program of on-site wind monitoring at the proposed hub height is necessary to support the bankability of the project.”

Ntoi adds that wind is generally less suitable for small projects, some of which can generate off-grid electricity, compared to solar. Wind power, he says, “does not readily lend itself to implementation outside of government-led programs”, due to the “nature of its licensing and procurement complexity, lack of capacity for co-location and therefore dependence on national networks, as well as the need for scale”.

The result is that wind developments are unlikely to proceed without a reliable buyer. These are hard to find in Africa. “There is real experience of payment difficulties with financially constrained utilities across the continent,” says Ntoi. “Wind developers, like other energy developers, are loath to develop projects in an ecosystem with poor credit quality where generators will not get the contractual payments to which they are entitled.”

Lack of solvency is a “main bottleneck”

Chris Chijiutomi, managing director and head of infrastructure equities for Africa and Pakistan at British International Investment, agrees that the lack of creditworthiness of African utilities is a “main bottleneck”. Another challenge, he adds, is “the general indebtedness of African countries, in terms of the ability of governments to offer guarantees that would then let the private sector know that they can come and invest.”

“The poor fiscal situation of many countries,” says Chijiutomi, “now creates limited space for them to offer sovereign guarantees or a letter of support needed to secure contractual obligations.”

In addition to financial guarantees, the ability of many African governments to provide security guarantees is also questionable. Patrick Edmond, senior consultant at strategic risk consultancy Africa Matters Limited, notes that several areas with good wind potential are exposed to security risks.

“The interior of Chad, Sudan, Niger and Mauritania is difficult to access, and the state has a very limited presence in these remote areas,” he says. “Northern Nigeria has enormous potential and demand, but major security challenges.”

Overcome conflicts

Wind project developers in Africa, as around the world, also face challenges responding to community opposition to new installations. These problems have been particularly intense in Kenya. A man was shot dead by police during protests against a wind farm project in Kinangop in 2015; the $144 million project was canceled the following year.

The Lake Turkana wind project – the largest in Africa – has also faced sustained opposition. Last year, a Kenyan court ruled that title to the project site had been improperly acquired. The ruling did not overturn the deeds, but paves the way for compensation from the local community.

The fact that the wind turbines that make up a wind farm are likely to be scattered over a wide area adds a layer of complexity. “As far as wind is concerned, sites are not necessarily self-contained or set in an ideal square area,” Chijiutomi explains. “You then have to deal with a lot more community and a lot more environmental and social issues associated with that.”

Some countries have tried to escape the social conflicts around wind farms by favoring offshore developments. In Africa, however, the development of significant offshore wind capacity appears to be a distant prospect. Even South Africa, a leader in the development of onshore wind energy, has yet to see a significant move towards exploiting its offshore resources. Niveshen Govender, CEO of the South African Wind Energy Association, reports that the country is unlikely to see offshore projects until at least 2030.

“A lot of the deterrence around offshore is more about investment costs,” Chijiutomi says. He cites the high cost of “doing the installation offshore, but more importantly, getting the connecting transmission lines to where the electricity is needed.”

In 2018, the 365 turbines of the Lake Turkana Wind Project in Kenya sat idle for almost a year due to delays in connecting the wind farm to the national grid. (Photo: Yasuyoshi CHIBA/AFP)

Network connection problems delay projects

In fact, the challenge of connecting turbines to transmission lines is also a major problem for onshore projects – especially for those located in remote areas, far from existing grid infrastructure. “The worst thing that can happen – and has happened in some cases – is to have the power plant ready, but the grid connection infrastructure is not,” warns Chijiutomi. “Then the government or whoever is the buyer, pays for the energy they can’t use because there’s no grid connection.”

This is precisely the situation that has afflicted the Lake Turkana project. The wind farm itself was completed on schedule in 2017. But the Kenyan government has fallen behind in building a new 272-mile transmission line, after the Italian company it hired went bankrupt. to build the line. Electricity from the project was not delivered to the grid until 15 months after the turbines were completed.

Lessons from South Africa

The Lake Turkana project is not alone among complex infrastructure projects facing delays. Indeed, despite its difficulties, it now supplies 17% of Kenya’s power generation capacity and has been cited by management consultants BCG as a ‘best practice’ example of a power project in Africa.

Further information on scaling up a wind deployment comes from South Africa. Wind energy development in the country was crippled for several years under the rule of its disgraced former president, Jacob Zuma. Since 2018, however, its independent power producer program has regained momentum. A dozen wind projects were given the green light that year, followed by 12 more in November 2021. Another tender was launched six months later.

Perdekraal East wind farm
Perdekraal East wind farm in South Africa. (Image: Siemens Gamesa)

The regular nature of tenders has proven to be essential in enabling developers to achieve scale and reduce costs. “With each procurement cycle of the project, the price of wind power has decreased significantly,” Govender points out. “The policy changes indicate a clear direction in terms of plans for the continued acquisition of new generation capacity, in line with the energy roadmap, which foresees 14.4 GW of new wind energy over the next decade.”

Ntoi agrees that “regular, predictable and repeatable supply supported by the government is probably the most important action that will enable the large-scale deployment of wind energy in Africa”.

He notes that South Africa has been “programmatic, therefore predictable” in its approach to sector development. “The parties have developed wind farms, with all associated costs and effort, in order to bid in the renewable energy procurement process. Because it’s a program, the developers know that there are recurring deals and if you don’t succeed in one trick, there will be another to follow.

Export opportunities for small African countries

The growing role of wind power in South Africa shows how the technology can ultimately help fill the continent’s electricity gap. South Africa is, of course, an exception in that its electricity market is considerably larger than in most African countries.

But, says Chijiutomi, expanding cross-border electricity transmission infrastructure could allow smaller countries to host large-scale wind farms. “I think there is also an opportunity where some of these countries that maybe have the wind resource, but their grid is not stable, they could be a producer of the wind resource and be able to sell it to neighboring countries.

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