Africa Energy Indaba 2021 will be hosted virtually from 1 to 5 March. The event brings together leaders from the regional and international power and energy community to discuss the status of critical projects, identify investment and development opportunities, consider how best to capitalise on those prospects, and to share industry best practice.
The development of renewable energy sources will be a key focus at this year’s indaba, picking up on the steady transition from traditional to renewable sources of power that we have witnessed over recent years. This shift is attributable to an increasing recognition of the environmental benefits of switching to renewables as well as the reduction in costs associated with renewable technologies such as solar PV and wind.
As urbanisation in Africa continues to escalate and GDP growth recovers post the pandemic, the demand for power is set to increase significantly. It is expected that renewable power will comprise the major share of new supply with (i) the continuing decline of costs, (ii) improved efficiency in battery storage technology enabling renewable sources to provide baseload supply, and (iii) the flexibility that renewable projects allow for multiple smaller projects in isolated settings or on mini-grids.
The renewable sector has demonstrated its resilience throughout the Covid-19 crisis, further promoting the case for economic recovery strategies to be underpinned by investments in the sustainable energy sphere. In addition, including renewable technologies in the energy mix will ensure a more flexible and reliable energy generation system.
Advances in increasingly affordable storage technologies have enabled renewable energy units to become more reliable. And as decentralised power supplies, renewable projects and low-carbon technologies tend to foster greater community inclusion than fossil-fuel plants, while simultaneously increasing the resilience of the energy system, providing a solution that supports economic recovery as well as reduced emissions.
Renewable energy will be a critical driver of Africa’s post-Covid-19 growth recovery and economic prosperity, as first world nations are progressively incentivised to invest in Africa’s renewables sector. The recent United Kingdom Africa Investment Summit, hosted by the UK Department for International Trade, brought together UK and African businesses to explore opportunities for partnership and investment.
As African nations aim to build back better, there are many opportunities for UK and other foreign investors to collaborate with them. Africa must take the necessary action to ensure renewable projects are attractive to global financiers. Such steps include ensuring:
- the procurement and project preparation are presented transparently, within a clear regulatory framework
- there is a stable and creditworthy off-taker contracted to purchase the power on a take-or-pay basis and
- the project parties, inclusive of the developer/sponsor, contractors and other key stakeholders, demonstrate credible experience in the sector.
Power projects in Africa are notorious for taking a long time from planning to completion. The most effective way for governments to mitigate such concerns is to procure power projects through a well-structured programme where all regulatory approvals are in place before development begins. This instils confidence in developers. The greatest opportunities for investors in Africa’s power landscape are in countries where there are coherent plans to procure power projects – South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) presents an example and is being adopted as a model by other African nations.
Opportunities exist at large mining sites too, particularly in outlying regions of the continent that have no access to the power grid. Where such operations are currently running on diesel generators, there are opportunities for renewable energy generation projects that would be more cost-effective and sustainable.
According to data from the International Energy Agency (IEA), expanding Africa’s capacity to realise universal access to energy by 2030 would require over $100 billion annually, of which 40% would be dedicated to solar, wind and other low-carbon power generation projects.
In view of this, much focus, both locally and internationally, is being placed on renewables in Africa, presenting many investment and development opportunities. The upcoming Africa Energy Indaba will unpack these prospects and address implementation. Registrations for the event are now open.
For more information visit: www.africaenergyindaba.com