African renewable energy market will grow significantly

According to Frost & Sullivan, Annual Renewable Energy Project Tracker, several wind projects currently being developed in North Africa will be fully operational by the end of 2010. Upon completion of these African wind farm projects, installed wind power capacity in Africa will see a dramatic increase. Additionally, the off-grid solar power market in Sub-Saharan Africa is anticipated to advance at a compound annual growth rate (CAGR) of more than 10 percent between 2009 and 2015.

“South Africa and Kenya, leaders in the RE industry, have announced feed-in tariffs for RE projects along with other regional governments that are currently investigating opportunities for RE projects," says Frost & Sullivan Energy and Power Systems Programme Manager Cornelis van der Waal. "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."

The Sub-Saharan African renewable energy market is due to triple in investment value between 2010 and 2015, which is motivated by a need for energy diversification and energy security supply. Awareness of the important role renewable energy projects have in energy security and rural electrification is on the rise.

Renewable energy projects are faced with the challenge of a slow paced regulatory reform and the ongoing monopolies of state utilities. A rehabilitation of the industry is necessary in order to speed up the pace of development and the private sector, particularly, incentives should be provided to invest in the sustainable sector.

"For example, in South Africa, there is huge investment planning towards the development of a large scale wind industry which is currently hampered by RE caps and time-consuming power purchase agreements (PPA) signings," explains Van der Waal.

South Africa, Kenya, Nigeria and Uganda are exploring the inclusion of grid-connected solar power into the national RE feed-in tariff (REFIT) policy. Companies with local manufacturing capacity will be the first choice to supply the solar photovoltaic technology.

"South Africa is expected to approve the renewable energy feed-in tariff for grid-connected solar power in 2010," concludes Van der Waal. "This will allow companies with local manufacturing capacity to capitalize on the feed-in tariff laws."