Tag Archives: Renewable energy

Ongoing ‘Decreasing International Solar PV Prices’.

Simon Batchelor from Gamos writes to continue the theme of global solar PV prices, and their continuing price reduction.

In his blog on Decentralised Solar PV Acceleration in South Africa, my colleague, Mark Borchers, noted that “Where national grid power prices are rising fast, as is the case in many African countries, the decreasing international solar PV prices will sooner or later lead to a situation where it makes sense for businesses to install their own grid-connected rooftop systems.”  In a blog last year “Will Solar Photovoltaics Continue to Decrease their Cost?” we shared some insights into the ‘decreasing international solar PV prices’.

It is well worth keeping an eye on this price descent of solar, and this blog takes the opportunity to refer to a new report by IRENA – The International Renewable Energy Agency. The report “THE POWER TO CHANGE: SOLAR AND WIND COST REDUCTION POTENTIAL TO 2025” focuses on utility scaled activities, nevertheless they present an up to date analysis of solar photovoltaics and suggestions of costs through to 2025.

They confirm that solar PV modules have high learning rates (i.e. cost reductions as technology manufacturers accumulate experience) (18% to 22%) and rapid deployment – there was around 40% growth in cumulative installed capacity in each of 2012 and 2013 and around 30% in 2014 and 2015. These factors resulted in PV module prices declining by around 80% between the end of 2009 and the end of 2015. In 2011, price declines accelerated as oversupply created a buyer’s market. The price declines then slowed between 2013 and 2015 as manufacturer margins reached more sustainable levels and trade disputes set price floors in some markets. Current country average module prices range from USD 0.52 to USD 0.72/W. They believe that module costs are set to continue to fall, and they state that by their reckoning, module costs will have dropped by 42% by 2025.

However these module costs are only part of the system costs. IRENA shows that there are considerable gains to be made by reducing all the other system costs. In their figure 2 (see below) they show some of the balance of system costs for various countries of utility scale PV projects. It is interesting to note that the difference between China and Germany on the one hand and Australia and Japan on the other is a factor of 3. The report suggests that there is considerable room for reducing these balance of system costs further and it is improved efficiencies of installation that will continue to drive the system prices down.

The report also considers the levelised cost of electricity (LCOE), which takes into account the lifetime of the system, the ongoing operation and maintenance costs, as well as the capital investment. They note that the LCOE of solar PV fell 58% between 2010-15, making it increasingly competitive at utility scale. Of course looking ahead there are many unknowns, however their predictions are that utility scale PV could have project costs in the range of USD 0.03 to USD 0.12/kWh by 2025.

This general trend highlighted by the report in the context of utility scale PV nevertheless supports Mark Borchers’ observations on shopping malls and PV. He noted that “a combination of steadily reducing international solar PV prices and consistently higher-than-inflation electricity price hikes” was behind the decision to put solar PV on malls, and that “such installations are now a financial no-brainer – giving an 18% internal rate of return (IRR) with a 5 year payback”. While the IRENA report had a slightly different focus (scale of PV), it nevertheless confirms that PV is likely to continue its price descent, making the IRR for shopping malls in South Africa even better in the coming years.

Mark ends his blog by stating that since this is financially worthwhile, and will inevitably become even more so, he calls for urban areas to think about the “big implications for sustainable energy planning”. We echo that call.

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Decentralised Solar PV Acceleration in South Africa

Mark Borchers from SEA writes on a recent visit to an embedded photovoltaic generation project in a commercial building, and the insights into the industry acceleration gained there.

I recently visited a shopping mall in Tshwane, South Africa, which had installed a grid-connected solar PV system on its roof (called an ‘embedded’ generator – because it is embedded in the local distribution grid). This is not unusual in the country nowadays, and estimates are that over 1000 embedded, distributed PV systems are in existence around the country, generating 40 to 50 Megawatts during the day. But I was struck by the fact that the mall developer said that for them such installations are now a financial no-brainer – giving an 18% internal rate of return (IRR) with a 5 year payback (whereas the decision to build a mall only requires a 10% IRR). So they intend to do these installations on all malls they construct. What’s behind this trend? Largely a combination of steadily reducing international solar PV prices and consistently higher-than-inflation electricity price hikes. Also, mall and other commercial operation load profiles tend to match solar PV generation quite well, being daytime-peaking.

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While national government and most municipalities do not yet have clear regulatory frameworks to accommodate such installations, the financial case particularly in the commercial sector is such that they are happening anyway, leaving the government to catch a horse that has already bolted from the stable. A few quick calculations show that mall construction alone is likely to add 6 or more Mega-Watts (MW) of solar PV to the country’s electricity grid capacity per year. Others estimate that 500MW per year could be added from these embedded PV systems from all sectors. That’s about 1% of the total national generation capacity per year, which is significant, and something that national electricity planners will have to take seriously.

There are many benefits to these developments, but also challenges. The benefits include growth in renewable, low carbon energy, local economic development, and the fact that such generation capacity is entirely privately funded. The challenges include potential revenue loss from electricity distributors due to reduced sales, and balancing the grid power at a national level to meet the country’s demand – particularly the evening peak demand where solar PV does not contribute. There has been significant work done to show how the country can negotiate these challenges, but it does mean that well-entrenched systems have to adjust and change – which seldom happens quickly. Overall, this trend is in keeping with what is being observed internationally: that the future will move increasingly towards decentralized generation, with solar PV in particular becoming an increasingly big player. It has been suggested that the days of large power utilities are numbered. (Bloomberg.com)

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This is a development we need to keep an eye on in urban Sub-Saharan Africa as a whole. Where national grid power prices are rising fast, as is the case in many African countries, the decreasing international solar PV prices will sooner or later lead to a situation where it makes sense for businesses to install their own grid-connected rooftop systems. And this is likely to happen irrespective of what government or utilities do, or don’t do, about it. It’s an inevitable transformation of the power sector which has big implications for sustainable energy planning in urban areas.

Ghana’s Drive for Gas Power Calls Commitment to Renewables into Question

Innocent K. Agbelie and Simon Bawakyillenuo from the University of Ghana ISSER write on the Ghanaian government’s gas policy and renewables development. This article was originally posted at urbanafrica.com.

From 2012 to the beginning of 2016, the Government of Ghana has been stretched to the limit due to the existing power supply infrastructure’s inability to provide constant and reliable electricity for domestic and industrial activities. This has resulted in the acute electricity supply load shedding known as ‘Dumsor’.

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Ghana’s electricity supply market currently has an estimated 10 to 15 percent year-on-year demand growth rate, underpinned by increasing domestic and industrial demand. Prominent among the actions taken by government to placate highly agitated power consumers is the expansion of thermal plant facilities, which are powered by gas imported from Nigeria and also from the Atuabo Gas plant in Jomoro District in the Western Region of Ghana. Since 2000 the share of thermal plants in the total national installed capacity has been on the rise, contrary to the country’s avowed green economic development pathway. This share (computed from the difference between the total national installed capacity and total hydropower installed capacity as reported by the Energy Commission,2014 and 2015) went up from 16.8% in 2000 to 31.8% and 44.1% in 2005 and 2014 respectively.

In contrast, the total installed new renewables’ capacity is a woeful 0.1% of the national total power installed capacity in 2014, while the share of hydro-power installed capacity declined from 83.2% in 2000 to 55.8% in 2014. The increasing share of thermal power generation sources will increase Ghana’s carbon emissions, accelerating climate change and the associated extreme events.

According to the Minister of Energy and Petroleum, the Government of Ghana wants to ensure that the nation becomes self-sufficient in its energy supply. Accordingly, government intends to increase the share of thermal generation capacity to 80% in the total national installed power generation capacity in the next 10 years. These thermal plants, according to the Minster, will be powered by the cheapest source of fuel: gas. This pronouncement sadly evokes lots more questions than answers in the minds of many, including: “What is the future of renewable energy development in the next decade as it is uncertain what the remaining 20% of the installed generation capacity will constitute?”, “What will be the effect of having 80% thermal plants on Ghana’s carbon footprint in the next decade and beyond?”, “Does a cheap fuel source necessarily guarantee a clean fuel source?”

These and many other questions should prompt a rethink in the nation’s quest to become self-sufficient in not just energy, but clean and sustainable energy in the next decade.

Ghana’s 2010 National Energy Policy sets a target of 10% of total energy production from renewable energy sources by 2020. This will require an installed renewable energy generation capacity of 450MW. Although the target is backed by the Renewable Energy Act 2011 it is highly unachievable since the present total installedrenewable energy capacity as of 2014 is 2.5 MW representing 0.1% of the total national installed generation capacity.

Taking into account government’s pronouncement of increasing thermal share to 80% in ten years’ time, the future of the already unachievable renewable energy target is even more questionable. The thermally oriented energy mix projections into the future calls into question the sustainable development and green economy agenda of the country, given that Ghana is signatory to many international conventions and protocols that incorporate sustainability issues.

According to estimates by Ghana’s Environmental Protection Agency, the country’s annual greenhouse gas emissions have been on the rise, growing from 10 Mt CO2e in 1991 to 34 Mt CO2e in 2012. The bulk contributors to these emissions are the Energy, Agriculture, Forestry and Other Land Use (AFOLU) sectors. The country’s Third National Communication Report to the UNFCCC highlights that Ghana’s emission rate has grown significantly over the past two decades and contributes 33.66 Mt CO2e to global GHG emissions. With a projection of thermal plants making up 80% of the energy mix in the next 10 years, Ghana’s emissions are bound to increase significantly in direct contrast to the Policy Programme area of minimizing GHG emissions as outlined in the 2013 Ghana National Climate Change Policy.

Cheap-fuel thermal plants appear rather costly to the national and global environment in the medium to long-term. A more sustainable approach is required through commitment to policy strategies coupled with political will on the part of leaders, to take bold decisions in order to drive the renewable energy agenda just like they are doing on the thermal agenda. The fact is, the formulation of policies by policy makers are inadequate for a sustainable energy transition if practical actions are not taken to implement them. Civil society groups, research and advocacy organisations also need to put pressure on government so that it accomplishes its pronounced targets for renewable energy generation.

Bring Me Sunshine…

Simon Batchelor from Gamos writes on the Witkop Solar Farm in Limpopo Province, South Africa,

At our recent network meeting in Polokwane, we visited Witkop Solar Farm which is within the municipality’s boundaries.  Witkop is a 30 megawatt solar farm built and maintained by SunEdison in the province of Limpopo of South Africa.  There is remarkably little on the internet to describe this installation although that may be a function of the ease of installing and running solar farms?  It was part of South Africa’s push to get Independent Power Producers to install renewable energy.   In an overview of the processes involved, Eberhard, Kolker & Leigland  (2014) note the difference between South Africa’s competitive tender approach and a Feed in Tariff as used in many other countries.   “South Africa occupies a central position in the global debate regarding the most effective policy instruments to accelerate and sustain private investment in renewable energy. In 2009, the government began exploring feed-in tariffs (FITs) for renewable energy, but these were later rejected in favor of competitive tenders. The resulting program, now known as the Renewable Energy Independent Power Producer Procurement Program (REIPPPP), has successfully channeled substantial private sector expertise and investment into grid-connected renewable energy in South Africa at competitive prices.”

Witkop was cited in the preferred bids in 2011 by the South African government, named in the pipeline in 2012, and construction started in 2013. As part of the terms of the financing agreement, power generated from the two facilities will be purchased by Eskom, the national utility in South Africa, through a 20-year power purchase agreement.

As part of our network meeting, SAMSET created a video ‘Aide Memoire’ of the visit, as seen below.

Energy and Africities Summit 2015

Mark Borchers from Sustainable Energy Africa writes on  the recent Africities summit, and the role that SAMSET played in advancing sustainable energy themes at the summit.

The Africities Summit is held every 3 years and is possibly the foremost gathering of African local government politicians and officials on the African continent. It is also well attended by national government and other players such as local and international NGOs.

The SAMSET team attended the 2015 Africities Summit in Johannesburg in November, and SAMSET organized a session on Sustainable Energy in urban Sub-Saharan Africa: the Role of Local Government (see the background paper here). It was competently chaired by the Executive Mayor of Polokwane (a South African municipality), Cllr Thembi Nkadimeng, and key recommendations emerging were included in the Summit outputs.

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Panel Discussion, Africities Summit, Johannesburg, November 2015: Source: Mark Borchers

In addition, SAMSET, in partnership with SALGA, GIZ and the City of Johannesburg, organized fieldtrips to sustainable energy installations in the area – rooftop solar PV, landfill gas electricity generation, sewage methane electricity generation, mass solar water heater rollout, and public transport and spatial planning systems (click here for an example).

Overall, however, although our event was relatively well attended, it was interesting to me that energy and climate change did not seem to be a priority in the minds of the majority of attendees. There were a few energy and/or climate change sessions held, and these did not attract much attention compared with many other sessions. Let us not forget that this relatively low level of participation in the energy events is in the context of a great range of parallel sessions of central importance to local governments, such as those around transparent governance, demographics, financial resources, decentralization and relationships with tribal authorities. In addition, the energy related events were not the only ones with unexpectedly low attendance. Nevertheless, it was apparent to me that energy issues were more peripheral to local government than I had envisaged.

On reflection, this isn’t surprising. Dr Vincent Kitio of UN Habitat Nairobi hosted one such energy event at the 2015 Africities, and told me that a similar event he organized at the previous Africities was the first ever that focused on energy. So energy is a relatively new consideration for local governments. In most African countries energy is considered purely a national function, and the important influence of local government on sustainable energy, such as in transport and spatial planning and building design, and the renewable energy opportunities from waste management, amongst others, has still not been internalized by any sphere of government other than in a scattering of pioneering municipalities across the sub-continent.

Yet, as noted by the Cities Alliance “…as long as cities and local authorities are not put in a position to take initiatives and be at the forefront of actions to make African cities more inclusive, competitive, sustainable, safer and better managed, there is little chance that Africa will overcome the challenges posed by rapid urbanization” (Assessing the Institutional Environment of Local Governments in Africa, 2014, p10).

This need to capacitate and resource local government applies to their role in promoting sustainable energy as well, and is of added urgency given the monumental challenge of meeting SDG (Sustainable Development Goal) 7 in Sub-Saharan Africa. This is the area SAMSET is working in, but, given how far we still have to go, many more players and resources are needed to achieve the huge shifts necessary.

Africities, 2063, and Time

This is a joint blog by Simon Batchelor from Gamos and Sumaya Mahomed, Professional Officer in Renewable and Energy Efficiency in the Cape Town Municipality.

At the recent Africities conference, some of the SAMSET researchers had a conversation with municipal partners, and this article tries to capture its essence.  Their subject – timescales.

In the development sector, donors, civil society, NGOs, researchers, all tend to speak in terms of 1 to 3 years projects. While the planning processes of logical frameworks and business cases allows for an impact after the project end, there are few agencies willing to commit to more than 3 years. SAMSET is actually a four year project and in that sense quite rare.  Most of the other USES projects were 1 to 3 years. Yet within SAMSET is the aspiration to assist our partner municipalities to gather data, create a state of energy report, to model the future (based on that data), to take decisions and create a strategy for ‘energy transitions’. And, within the timeframe of the project, to take some first steps in that strategy, some actions.

In a slight contrast to this, Africities has as its slogan – “SHAPING THE FUTURE OF AFRICA WITH THE PEOPLE: THE CONTRIBUTION OF AFRICAN LOCAL AUTHORITIES TO AGENDA 2063 OF THE AFRICAN UNION.”. It is looking at 2063!  That is (nearly) a fifty year horizon. Africities knows that municipal planning, changes in infrastructure, raising the finance for those changes, takes decades not years.

SAMSET is funded by UK donors and some of the researchers come from the UK, so lets take the London Cross rail link as an example. First of all, lets remember that the essence of London Underground – the transport system that effectively keeps London working – that the essence was established in 1863 (The Metropolitan Railway, using gas-lit wooden carriages hauled by steam locomotives!). That’s nearly one hundred and fifty years ago. The cross link is a new tunnel that will join east London (the banking and business hub) to west London, and beyond. This tunnel has to go ‘in a straight line’ while at the same time missing existing underground tunnels, water mains, etc. At times it will be created just 1 metre from an existing underground structure.

So its perhaps surprising that it was apparently first mentioned in 1941, was written on a plan in 1943, serious consultations in the seventies, serious proposals in the nineties, commercial proposal in 2001, and decided on in 2005 (10 years ago) and construction started 2009. Despite the huge advances in tunnelling, it will still take another 5 years to complete.

And of course it is only one part of an ongoing dynamic change in infrastructure of one of the worlds leading cities.

So imagine now trying to raise funding for a Bus Rapid Transport system in Polokwane. The changes will require that roads be changed, new lanes created, negotiations with landowners of key areas, procurement of the equipment. It is not surprising that it has taken over 9 years since serious planning started (2006), and that it will take until 2020 before it is fully implemented, with all the associated traffic disruption of road works etc. Infrastructure in cities takes time to change.

SAMSET modelling shows what the energy consumption of a partner city might look like in 2030. It starts with a ‘business as usual’ model and then explores possible changes, assisting the partners to identify a key change that will make a good (low carbon) longer term change. In the case of Cape Town, the municipality asked for projections to 2040, as the felt 2030 was too close. The timescales in municipality minds are of 10 year, 20 year projects, not 1 to 3 year disconnected projects.

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Figure 1 Cape Town Growth in energy consumption per sector for ‘business as usual’ scenario.

And consider the energy impact of a building. A building will last 40 years or more, so if planning permission is given to an energy inefficient glass tower, the air-con commitment is there until 2063.

So municipal planning has a very long term view. Of course in a counter flow to this long view of the municipal civil servants are the politicians who have a very short term view. Politicians are often concerned with short term benefits and easy wins, so they or their party gets re-elected.  For city planners it is a difficult balance.

So when we think of energy transitions what is the right timescale? Well in a complex world we have to think of all the actors, their different needs and juggle all of them together. We do need to find early easy wins so that donors to research projects and politicians are happy enough to fund a phase two.  We do need to build capacity so that despite the movement of people from job to job, a municipality gradually gains the required skills to consult, plan and implement longer term energy transitions.  And we do need to have a long term view. Building infrastructure, even building buildings, commits a city to a particular energy path for decades not just years, and so those long term implications need to be taken into account.

Smaller African cities need sustainable energy intervention

Originally posted on The Conversation, Louise Tait from the University of Cape Town Energy Research Centre writes on sustainable urban planning and energy, and the SAMSET Project’s role in supporting sustainable energy development in developing world cities.

Africa is experiencing a massive flow of people into urban areas. This is happening in major urban centres such as Lagos, Accra and Dar es Salaam as well as in smaller and secondary cities. The pace at which this urban growth is happening inevitably puts strain on city authorities. The supply of services and developing infrastructure is vital for human and economic development.

But the evidence base to support forward planning remains scarce for most cities. In its absence, cities run the risk of infrastructural lock-ins to systems that are unable to accommodate their growth sustainably.

Cities with high concentrations of people and economic activities are major sites of energy demand. Africa contributes very little to global climate change today. But future growth must be managed sustainably. If the emissions of developing country cities increase similar to many western cities today, catastrophic climate change will be unavoidable.

The SAMSET project

Supporting African Municipalities in Sustainable Energy Transitions, or SAMSET, is a four-year project that commenced in 2013. Its aim was to address sustainable energy transitions in African cities. It provides practical planning and implementation support to municipalities to manage future energy planning in a sustainable manner.

The project involves six cities in Ghana, Uganda and South Africa. The cities were Ga East and Awutu Senya East in Ghana, Kasese and Jinja in Uganda and Cape Town and Polokwane in South Africa. Research and support organisations in each country and the UK were involved as well.

Secondary and smaller cities are the main focus for support. These cities are also experiencing massive social and economic expansions. But they typically have less capacity to cope. Despite their significance as current and future sites of energy demand, they receive much less research and funding focus.

Secondary cities such as Uganda’s Kasese traditionally lack the research or funding to make sustainable energy transitions.

Developing an evidence base to support planning

The first phase of the project involved developing an evidence base to support planning and future implementation of sustainable energy interventions. Locally relevant planning tools are essential. There are very few studies investigating and modelling the energy systems of African cities. South Africa is a notable exception.

An urban energy system refers to all the flows of different energy resources, such as petrol, diesel, electricity, wood and charcoal in a city. It records where resources are produced or imported into an area and where they are consumed in different sectors. Such information can help cities better understand which sectors are major consumers and identify inefficiencies. It also helps identify where opportunities for energy efficiency and new technologies may lie, especially those associated with improved economic and welfare effects.

Much of how we understand urban energy systems is based on cities in western and developed countries. But many cities in Africa challenge assumptions about economic development trajectories and spatial arrangements that may be implicit in energy modelling approaches which are based on developed country experiences.

SAMSET modelled the urban energy systems of each of these cities using the Long-range Energy Alternatives Planning model. It was developed by the Stockholm Environment Institute. This model records all energy consumption and production in each sector of an economy. For example the household, commercial, industrial and transport sectors are all recorded. It is a useful planning tool because it projects the growth of energy systems until 2030 under different scenarios. This helps cities understand the future impacts of different investment and planning decisions now.

For SAMSET, universities in each country undertook primary data collection on sectoral energy demand and supply. A baseline model and range of scenarios were then collaboratively developed with local research partners and municipalities.

The project aimed to develop an evidence base to serve as a tool for local decision-makers. Also for further collaborative energy strategy development and to prioritise the implementing of options for the next phases. The scenarios have therefore attempted the following:

  • Through stakeholder engagement, to take into account governance systems.
  • Existing infrastructural constraints and opportunities.
  • Aligning with other development imperatives.

Value of the process

The project has served to introduce to city and local planners the use of energy models. It also attempted to set up the foundation for future development of energy modelling exercises and its applications. Collaborating to collect data, discuss key energy issues, and identify interventions are highly valuable to local stakeholders.

The process was instrumental in generating an understanding of energy planning. For some of municipalities, this was the first time consideration has been given to energy as a municipal function.

The modelling process acts as a strategic entry point to build interest and support for the project with municipal stakeholders. It also provides a useful platform and tool to engage around long-term planning and the implications of different actions. An example is infrastructural lock-in to emissions and energy intensive growth paths.

Value of the outputs

SAMSET is making an important knowledge contribution to the dynamics of sustainable energy transitions in African cities. Such research is of course made difficult by the data scarcity typical at a sub-national level. But this is merely reflective of the lack of financial investment to date.

The local data collection processes in this project have been vital in building capacity and generating awareness around urban energy systems. Developing new data and building knowledge of urban energy transitions in the global south is critically important. It has had a strong focus on establishing a network of both north-south and south-south practitioners to support more work in this arena.

The modelling has had to account for several distinct characteristics. These include:

  • The informal economy
  • Own energy generation through diesel and gasoline generators
  • The high reliance on biomass
  • Variations in urban forms and issues such as suppressed demand for energy services.

This project has also made important methodological contributions to modelling urban energy systems in developing countries.