Renewable Energy Investment Trends in sub-saharan Africa Wikus Kruger MIRA Graduate School of Business, University of Cape Town Nov 2018
Nr of Projects Number of utility-scale RE IPPs in SSA 25 (ex. RSA) 20 15 10 5 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Solar, PV Wind, Onshore
MW Annual utility-scale RE IPP capacity additions in SSA (ex. RSA) 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Solar, PV Wind, Onshore
Number of RE IPPs per country Zimbabwe Zambia Uganda Senegal Rwanda Namibia Mozambique Mauritius Mali Madagascar Kenya Cape Verde Burundi Burkina Faso 0 2 4 6 8 10 12 14 16 18 20
RE IPP capacity by country Zimbabwe Zambia Uganda Senegal Rwanda Namibia Mozambique Mauritius Mali Madagascar Kenya Cape Verde Burundi Burkina Faso 0 50 100 150 200 250 300 350 400
Nr of Projects RE IPP procurement methods 20 18 16 14 12 10 8 6 4 2 0 DN REFIT ICB Solar, PV Wind, Onshore
US$ c/kwh Which procurement methods yields better prices in sub-saharan Africa? 35 30 25 20 15 10 5 0 ICB DN ICB REFiT DN MSD
Majority of global new renewable energy capacity to be procured through auctions Renewable energy capacity growth by type of policy defining remuneration levels Source: IEA, 2018
Lowest renewable energy prices achieved through auctions
Canada Ontario LRP I Programme 140 MW Ghana 20 MW Auction Sept 2016 Ghana 50 MW Auction 2016 Germany PV Auction II 150 MW Aug 2015 Brazil A3 auction 834 MW Aug 2015 Malaysia LSSPV Projects Auction 451 MW Jan Mauritius Farms Auction 10-15 MW Germany PV Auction III 204 MW Dec 2015 Brazil A4 auction 929 MW Nov 2015 India - Uttarakhand Auction 171 MW Oct 2015 Jamaica 33 MW RE sources May 2016 Israel Timna Solar Farm 60 MW Jul 2016 India - Telangana Auction 2 GW Aug 2015 Germany PV Auction V 130 MW Aug 2016 India - Haryana Auction 150 MW Dec 2015 China - Inner Mongolia 1 GW Sept 2016 France Auction (CRE III) Dec 2015 Germany PV Auction IV 128 MW Apr 2016 India - Jharkhand Auction 1.2 GW March 2016 India - Karnataka Pavagada Solar Park (DCR) Germany Auction 200 MW Feb 2017 India - Telangana Auction 350 MW May 2016 India - Karnataka Auction 1.2 GW March 2016 Germany PV Auction VI 163 MW Dec 2016 India - Odisha Auction (Phase-II Batch IV) 450 India - Andhra Pradesh Auction 400 MW May India - Karnataka Auction 920 MW June 2016 India - Maharashtra Auction 500 MW Jan 2016 Chile Energy Auction Oct 2015 India - Rajasthan Auction 130 MW Jul 2016 India - Rajasthan Auction 420 MW Jan 2016 Namibia Mariental 37 MW Feb 2017 Jordan Tender II 200 MW May 2015 South Africa REIPPP BW4 813 MW Apr 2015 Zambia Round 1 - IFC Scaling Solar 73 MW Jordan 61 MW Project (Risha Argentina RenovAR Round 1a 400 MW Oct 2016 Spain/Portugal Endesa Solar Iberian Auction II Germany Cross-border RE auction with Spain/Portugal Endesa Solar Iberian Auction III Saudi Arabia 50 MW Aug 2015 El Salvador RE Auction II 120 MW Jan 2017 Argentina RenovAR Round 1b 516 MW Nov 2016 Peru First RE Auction 144 MW Feb 2016 Senegal PV auction 60 MW Mar 2018 Denmark Cross-border RE auction with Morocco Noor 1 PV 170 MW Nov 2016 India - Madhya Pradesh 750 MW Rewa Tender Spain/Portugal Endesa Solar Iberian Auction III South Africa REIPPP BW 4.5 (expedited) 2016* Armenia - 55MW Apr 2018 USA - Nevada First Solar's 100 MW Playa USA - Texas 118 MW East Pecos Solar & co USA - California (Palo Alto) 26 MW Wilsona Mexico Auction I 1.1 GW March 2016 Mexico Auction II 1.8 GW Sept 2016 UAE - Dubai 800 MW phase III of M. bin R. Al Chile Energy Auction Aug 2016 UAE - Abu Dhabi 350 MW Sweihan Mexico Auction III - - Dec 2017 Traiffs (US$c/kWh) Auctions are pushing down prices on solar PV projects 14,0 12,0 11,6 10,0 8,0 6,0 4,0 9,6 8,9 7,9 7,2 6,5 6,2 5,4 4,7 Note: * Provisional results (South Africa) 4,4 3,7 3,3 3,0 2,1 2,0 0,0
Tariff (US$c/kWh) and on wind projects 14,0 12,9 12,0 11,3 10,0 8,0 6,0 9,9 9,9 9,0 8,3 7,8 7,8 7,4 6,9 6,7 6,4 6,2 5,8 5,7 5,5 5,4 4,9 4,7 4,6 4,4 4,4 4,3 4,0 3,8 3,8 3,6 3,1 2,0 1,8 0,0
Lowest prices being achieved in emerging markets 4,0c 2,4c 2,5c 5,4c 2,5c 4,6c 8,7c 17,4c 4,7c 1,8c 3,1c 2.8c 2.4c 3,5c 2,0c 3,5c 4,0c 4,7c 4,8c 3,8c 3,3c 6.0c 2,2c 6.0c 5,4c 3,8c 4,0c 4,7c 4,7c 4,9c Wind energy
Renewable energy auction progress in sub-saharan Africa Rapidly spreading across the region, but varying results Auctions with projects @ FC Auctions with announced winners, but no FC Auction programs announced
Features of renewable energy auctions 6,300 MW (4 rounds) Multiple RE in sub-saharan Africa South Uganda* Zambia* Ghana Namibia* Malawi Ethiopia Senegal Africa* Year 2011-2018 2014 2016 2016 2017 2017 2017 2018 Auction Demand 4 x 5 MW 2 x 50MW 1 x 20MW 1 x 37 MW 1 x 100 MW 2 x 30 MW Site Selection Developer Developer (3km - grid) Selected by govt. Developer (input from offtaker) Selected by govt./ utility Local Content 40% min None None 20% None (but 30% PDN shareholding, LC req for gen license) Evaluation 70:30 Price: Economic Development 70:30 Price: Technical Price Not clear 70: 30 Price :Technical Max 80 MW (4x sites) Substations identified by govt. 5% develop ment & construction 20% O&M Selected by govt. Price 70:30 Price: Technical 15% None Selected by govt. PPA 20 Years 20 Years 25 Years 20 Years 25 Years 25 Years 20 Years 20 Years Guarantees Sovereign Sovereign & Liquidity Sovereign & Liquidity Sovereign & Liquidity None Sovereign & Liquidity Sovereign Sovereign & Liquidity Winning Price 4,7* 16,37 6,02 (Nonindexed) 11,47 ( 6,02** 7,35 10,35 Below US$c6 4,7 (Indexed) (USDc/ kwh) (Indexed) (Partly indexed) (Indexed) (TBC) (TBC) Currency ZAR US$/EUR US$ US$ NA$ US$ US$ US$ Financial Close Yes Yes Yes* No Yes No No No Price
Wikus Kruger Graduate School of Business University of Cape Town Wikus.kruger@gsb.uct.ac.za The Management Programme in Infrastructure Reform & Regulation (MIR) is an emerging centre of excellence and expertise in Africa.