Huge appetite for investment in renewable energy

There is a huge appetite for investment in renewable energy projects in Africa, the International Renewable Energy Agency said.

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Cape Town - There is a huge appetite for investment in renewable energy projects in Africa, the International Renewable Energy Agency (IRENA) said on Monday.

Speaking on the sidelines of the South African International Renewable Energy Conference (SAIREC) in Cape Town, which attracted 3 200 delegates from 81 countries, IRENA director-general Adnan Z Amin said investors saw Africa as the next big market in terms of renewable energy opportunities as demand for energy in Europe declines.

“We really believe the business case for renewable energy is here. It’s a question of aligning policy frameworks, de-risk financing, having markets that brings investors, and it’s entirely doable,” said Amin.

“It’s also security in what guarantees the governments can offer and what incentives the governments can offer for long term investments like renewable power generation.”

If all the criteria were met, IRENA believes Africa’s renewable energy share could quadruple in the next 15 years

A study by IRENA, launched at SAIREC, shows that final energy consumption could increase from five percent to 22 percent by 2030.

For this to happen, political will was required, as well as a commitment to eradicating major stumbling blocks.

The major hurdles included a lack of regulatory frameworks, policies that were not aligned across regional “power pools”, and financial risks for investors.

“By creating a larger regional electricity markets within these regions through bankable renewable energy power projects, the African clean energy corridor initiative will attract investment to meet 40 to 50 percent of power needs in the East African and Southern African power pools by 2030,” said Amin.

With over 600 million Africans unable to access any form of power, and with this number expected to grow to over 700 million by 2030, conference delegates will be looking to share experiences and find common ground on how the continent can decrease its reliance on costly fossil fuels for energy, and move towards renewables.

“The potential is immense. Africa has bountiful and varied renewable energy resources, including excellent solar across the continent…hydro in many countries, strong wind resources and powerful geothermal in East Africa’s rift valley,” Amin said.

“Investment opportunities in the sector are plentiful. Our research finds that renewable energy deployment in Africa can reach 310 gigawatts by 2030 on the basis of the technology and the business case that we have today.”

If countries co-ordinate their efforts through cross border trade of renewable power, Amin believes huge cost savings could be achieved, and hopefully this would trickle down to electricity users.

IRENA believed there was a healthy appetite for investment in renewable energy projects in Africa.

However, to catalyse private investment, African governments would have to reduce risks by ensuring regulatory frameworks were in place, and that investment incentive schemes were put in place.

“The renewable energy revolution is here and together we must ensure that no country in Africa is left behind,” Amin said.

Energy Minister Tina Joemat-Pettersson told delegates her country was well on its way to achieving its renewable energy targets.

She said to date more than 6000 megawatt of electricity had been procured from 37 independent renewable energy power producers.

“This success in transforming natural resources into electricity on the grid is entirely due to a demonstrated political will, policy coherence, clear regulatory frameworks, convergence between energy generation and transmission planning, and fiscal plans.”

While South Africa was still expected to procure at least another 9600 megawatts of power from nuclear sources, German ambassador to South Africa Walter Lindner proudly announced at the conference that his country had turned its back on nuclear.

“It is simple, if you want to win elections in Germany you have to be against nuclear!” Lindner told delegates during one of the breakaway sessions.

ANA