Engineering News | By: Terence Creamer | 26th June 2017:
Recent renewable energy price reductions, together with sub-Saharan Africa’s (SSA’s) formidable solar and wind resources, have made solar and wind technologies the cheapest sources of power in several countries, which carries significant implications, a newly published academic paper argues, for how the region’s relatively undeveloped power systems are designed.
Titled ‘Independent Power Projects (IPP) in Sub-Saharan Africa: Investment trends and policy lessons’, the paper has been co-authored by the University of Cape Town Graduate School of Business’s Professor Anton Eberhard, independent consultant Katharine Gratwick, as well as Elvira Morella and Pedro Antmann, both of the World Bank.
The authors see renewable energy breaking through on the continent – both in scale and price; a “breakthrough” facilitated, in part, by competitive procurement or auctions, which deliver lower prices and increased transparency when compared with renewable energy feed-in tariffs or directly negotiated contracts.
Renewable energy is, therefore, able to compete with fossil-fuel based sources, but will need to be complemented with flexible resources, owing to their variable production profiles. “This calls for a re-evaluation of the role of utilities and power markets in balancing the system and contracting appropriate back-up and auxiliary services.”
The authors forecast that IPPs will make an important and growing contribution to meeting SSA’s power needs, but urge policymakers to place greater emphasis on power planning and competitive procurement to ensure a “fair allocation of risk” across private investors, utilities and governments.
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