Ethiopian Energy^Power Business Portal

(reuters/Maina Waruru, 20 April 2018)

In February, Kenyans awoke to news that has become an annual ritual: Authorities were considering temporarily shutting down hydropower dams, the country’s largest source of electricity. The reason was the one given each dry season for the last four years – too long without rain had left too little water in reservoirs to turn the turbines and generate power. Kenya Power Ltd., the national electricity utility, has so far always managed to avoid a full shutdown, instead turning off just a few turbines at a time. But to make up the gap it has turned to more expensive – and polluting – diesel generators to keep the country plugged in.

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(By Luther-Jones Natasha/Daily Monitor, 26 March 2018)

In Summary

  • Regional attention . Discussing solutions. Recently at the East Africa Energy and Infrastructure Summit that took place in Kampala, PPAs, and potential off-grid solutions, took centre stage, attracting delegates from international equity investors and debt providers, leading international utility and regulatory companies, as well as a variety of African organisations from Uganda, Kenya, Tanzania, Rwanda and Ethiopia.
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In an electricity world that sees variable renewables at the centre stage, market players and policy makers cannot overlook the need for flexibility, a game where storage technologies are expected to play a key role.

The strong expansion of variable renewables, which are projected to make up more than half of global capacity additions to 2040 in the IEA’s New Policies Scenario (NPS), has major implications for electricity, first among them is the need for increased flexibility. Globally, electricity demand is projected to grow by over 20% over the next decade, but flexibility – the ability of the power system to quickly adapt to changes in power supply and demand – grows by some 80%. Flexibility will therefore be the cornerstone of future electricity systems. It will be met not only by traditional sources of flexibility – such as conventional power plants and electricity grids – but also by new sources of flexibility, including battery storage and demand-side response, which are projected to grow fast and contribute 400 GW by 2040.

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Only partly. It is true that the use of competitive auctions has accelerated cost reductions for some renewable technologies, notably solar PV, onshore wind and offshore wind, establishing price benchmarks that are recognised worldwide. However, these prices cannot be consistently followed, as each country and technology has different resource potentials, financing conditions and auction designs.

That said, overall trends show that recent bid prices for onshore wind and solar PV technologies for projects to be commissioned by 2023 range from USD 20 per megawatt hour (MWh) to USD 50/MWh. This corresponds to a 45-50% reduction in contract price for both technologies from 2017 to 2022/23; for offshore wind, the decline is almost two-thirds.

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