Explosive Growth on the Horizon for African Renewable Energy Market

Africa is Expected to Become a High-Growth Area for Renewable Power

Currently, California, USA is the hotspot for renewable energy development worldwide, with more open solar and wind projects in this small region than anywhere else in the world. However, experts expect this to change very soon and Africa is expected to be one of the most important new regions for renewable energy production.

Up until now, Africa has been by and large left out of the renewable energy race despite prevailing weather conditions and geography that would seem to lend it perfectly to different types of renewables, particularly solar. In addition, the lack of a centralized grid system over much of the continent also lends itself to stand-alone renewable power generation as an avenue for individuals and communities who are in need of energy solutions to produce electricity in the long term while avoiding the high fuel costs and upkeep of traditional fossil-fuel systems.

Up until this point, slow moving government participation and reform in Africa have represented a significant barrier for the progress of renewable energy projects. However that seems to be changing. South Africa and Kenya have both announced their intent to approve Feed-In Tariff programs in 2010 which will make it more feasible for communities and individuals to invest in renewable energy projects and may also attract private investors to the African market as well. A Feed-In Tariff would require existing utility companies to pay a flat rate for renewable-generated power that is supplied back to the grid, representing a low-barrier income stream for the owners of renewable energy projects.

While large-scale projects are unlikely in Africa just yet, the continent’s unique situation does lend itself well to the operation of small to moderately sized renewable power projects. According to analysts, “Many developmental agencies consider small-scale RE projects as the most feasible solution for accelerated rural electrification and therefore are increasingly investing in medium-sized projects, especially wind and solar projects,” said Cornelis van der Waal, Frost & Sullivan Energy and Power Systems program manager.