An Urgent Call to Action for African Governments
It is Africa’s solar power moment. African governments and Independent Power Producers (IPPs) recognize the incredible opportunity to overcome African electricity poverty by utilizing one of the continent’s most abundant natural resources — the sun. Solar power capacity comprises over 90 percent of an estimated 10 terawatts of sub-Saharan Africa’s total potential power capacity.¹ The levels of Global Horizontal Irradiation (GHI), the amount of radiation received by a horizontal surface, across Africa are among the highest in the world making solar photovoltaic (PV) systems an attractive power option for African governments.²
Solar Prices Are Reaching Record Lows. Sub-Saharan African governments and foreign direct investors are developing policy frameworks, goals, and financing mechanisms, to diversify their generation mix. While gas and hydropower will continue to dominate sub-Saharan Africa’s power generation mix, particularly for baseload power utilization, solar capacity is expected to increase as a major power resource as technology prices continue to fall and solar tariffs become increasingly cost competitive with other thermal and renewable resources. Also, rapid advances in battery technology and storage business models are likely in coming years to make solar plus storage a viable baseload option at scale. By 2030, solar is projected to become one of the least expensive new energy sources in sub-Saharan Africa as investment climates improve, procurement processes become increasingly transparent and competitive, and demand continues to rise.
Competitive Procurement Drives Down Prices. One of the critical drivers of the historic solar price declines has been a global uptick in the use of competitive procurement processes. On average, the price of solar in a market drops by 35–50% when a country switches from feed-in tariffs or negotiated deals to the use of competitive auctions. Bloomberg New Energy Finance (BNEF) projects that over 80% of global solar energy capacity will be procured through competitive procurement in the next 10 years. Markets as diverse as the European Union and the Philippines have recently mandated that competitive tenders be used for all new renewable energy capacity.
To read more find the original article on medium/Power Africa/by Andrew Herscowitz, US #Power Africa Coordinator at @USAID.