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Winds of change blow through power sector

Winds of change blow through power sector

In order to address Africa’s enormous power shortages, governments are increasingly looking to sustainable and clean energy sources such as wind. 

The African continent, like the rest of the world, continues to clamour for solutions to energy deficits. Especially south of the Sahara, hundreds of millions of people have no access to electricity, while many of those that do suffer from rolling blackouts. Homes go dark and stay dark once the sun has gone down, and businesses struggle to compete and grow when having to deal with epileptic energy supplies. Moreover, with demand rising thanks to industrialisation, urbanisation and population growth, these problems are getting ever more urgent. It is little wonder then that governments all across the continent are attempting to address this energy crisis and looking to largely untapped sources of energy such as wind energy to help power Africa.

On 6th February 2015, for example, residents of Ayitepa, a small village in Ghana, gathered at a formal meeting to hear more about the benefits that they would potentially enjoy once a planned wind farm project kicks off. Over 300 people sat patiently as details of the 225MW wind farm project were broken down bit by bit.

Upon the farm’s completion, they were told, those at the meeting and many more would finally have their homes lit up and have access to reliable electricity, some for the first time.

The Ayitepa Wind Farm project is the brainchild of Swiss company NEK Umwelttechnik, a private company founded in 1989.

“Like many more companies in the energy business, we too are recognising the opportunities in Africa,” reads a statement on the company’s website. “We have around 10 people working full time, each from a different professional background and job specialisation. We work both nationally and internationally, employing local people in each overseas location.”

For the Ghanaian villagers, as with communities all around the continent, access to electricity through wind power would be hugely welcome and do much more than just light up their homes.

“The use of wind energy in powering our countries means much more than meeting an international standard. For some of the communities where such projects are involved, it means rescuing whole generations, introducing them to education and opening up their existence to a whole new world,” says Isaac Kalua, energy consultant and founder of the Green Africa Foundation.

Swirling investment

According to the World Bank report, The Economics of Renewable Energy Expansion in Rural Sub-Saharan Africa, Africa requires huge sums of investment in order to expand its energy sector, which in turn is crucial for economic development.

“Accelerating development in sub-Saharan Africa will require massive expansion of access to electricity – currently reaching only about one third of households”, reads the report. But given the fact that the continent is already feeling the disastrous effects of climate change, it adds: “this economic development should be reconciled with the need to keep carbon emissions down”.

Another report published in late April by the African Development Bank (AfDB) makes a similar claim with regards to investment, estimating that: “In order to end its energy deficits the continent requires investments of more than $60bn over the next 25 years”.

The report notes that nearly 60% of Africans have no access to reliable energy, and over 620m people live without the benefits of an electricity connection. According to Solomon Asamoah, a vice-president of AfDB, however, electrification rates in rural sub-Saharan Africa can be as low as 10%.

It is for this reason that the AfDB has committed $13bn over the past two decades to build up Africa’s energy sector.

“As this amount is far beyond the capacity of any single institution, we are working to leverage other sources of finance and establish strategic partnerships with other development partners,” says Asamoah. “We are also helping our member states to develop public-private partnerships for power infrastructure and to access sources of climate change finance.”

Another new source of funding for enhancing Africa’s electricity is the European Union-backed Energy Access Ventures Fund, which will be directed by Astor Capital Partners, a Paris-based private equity firm.

With $11m of the fund being provided by the European Investment Bank, the initiative plans to invest around $60m in 20 businesses over five years, focusing on small and medium enterprises. The aim is to help expand electricity access to one million people living in rural and peri-urban areas, and investments will initially be earmarked for Kenyan firms before moving on to Uganda, Tanzania and Rwanda.

Breaking into wind

Amongst the firms backed by this new fund are various renewable energy companies, including Olkaria geothermal power plant in the rift valley town of Naivasha and a wind farm in Turkana province in Kenya’s arid north.

Since Kenya’s independence, the Turkana region has been better known for famine and banditry than as a potential contributor to the country’s national power grid. But the more than $700m Lake Turkana Wind Power (LTWP) project will, upon completion, inject 300MW into Kenya’s grid.

According to the company, that is equivalent to around 20% of the Kenyan grid’s current generating capacity, and the project is the single largest private investment in Kenya’s history. The project will cover 40,000 acres and comprise 365 wind turbines.

“This is a very significant project for Kenya, with its huge associated transmission infrastructure likely to be used to connect future projects to the grid,” the area governor Joshua Nanok told African Business.

Further north in neighbouring Ethiopia, officials and investors are also betting big on the future of wind energy. Official records from the Ethiopian government estimate that approximately 20,000 square kilometres of land are suitable for grid-based wind power generation with the potential to add a huge 100GW to the national grid.

Among existing projects is the Ashegoda Wind Farm Project. Ashegoda is the second-windiest place in Ethiopia after Adama, and the project, which began in October 2009 and cost around $230m, has a total capacity of 120MW.

“With the country’s ambitions in keeping up with its fast-developing neighbours, an investment into energy was of paramount importance,” says Addis Abba-based energy consultant Tesfaye Negred. “With our huge potential on wind energy, development into this area is among the safest of bets.”

Other African countries are looking to harness wind power on a large scale. Nigeria’s 10MW Katsina Wind Farm is almost completed. In South Africa, energy deficits in Africa’s second-largest economy have provided the perfect opportunity for investors, under the auspices of the South African Wind Energy Association (SAWEA), to invest in wind energy.

SAWEA says that the country’s wind sector is regarded as one of the three most vibrant wind sectors worldwide, alongside Mexico and Brazil, and calculates that while South Africa had only eight wind towers in 2012, it currently boasts 300, with another 500 under construction.

One of the wind farms that is up and running in South Africa is the recently completed Dorper Wind Farm in the Eastern Cape. The farm is now fully operational and contributing 100MW into the national grid.

The South African government’s efforts in fostering the renewable energy sector have even won it the approval of some of its fiercest critics.

“It is commendable that we as a nation are looking at sourcing better and cleaner energy to meet our deficits. This will not only improve the supply but also open up our country to potential investors,” Julius Malema, leader of South Africa’s opposition Economic Freedom Fighters, told African Business.

Winds of change

Africa’s untapped clean energy potential remains one of its most important development resources. The continent is severely lacking when it comes to generating electricity and providing power to its one billion population. Yet the ability to generate this power is right at its feet in the form of hydropower, geothermal, solar and, not least, wind power.

Moreover, with Africa set to be one of the regions of the world that suffers the hardest shocks from fossil-fuel-driven climate change, clean energy is even more welcome. And as the costs of harnessing this natural power come down with advances in technology, this source of energy will only get cheaper and more sustainable.

Within 20 years, renewables are expected to account for 40% of total energy generation in Africa. And as the little Ghanaian village of Ayitepa waits with bated breath in anticipation of the possibilities that will be brought forth upon the completion of its wind farm project, the rest of the continent is looking on admiringly.

Other countries too are exploring and investing in the possibility and eventual reality of powering up their people by tapping into the vast winds swashing across the continent’s vast plateaus.

Daniel Wesangula

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Written by African Business Magazine

African Business and its award-winning team is widely respected for its editorial excellence. We provide the all important tools enabling you to maintain a critical edge in a continent that is changing the world. Our special reports profile a wide range of sectors and industries including Energy, Oil and Gas, Aviation, Agriculture to name but a few.

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