HomeRegional NewsAfricaMaking every drop count in hydropower generation

Making every drop count in hydropower generation

Africa has the highest percentage of untapped technical hydropower potential in the world, with only 11% being used. A concern raised is around how to take advantage of this resource while taking into account the effect of exploiting the continent’s vast natural water supply.

This article first appeared in ESI Africa Issue 2-2020.
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The continent’s installed hydropower capacity is expected to grow by 4,700MW over the next two to three years according to the International Hydropower Association’s (IHA) 2019 Hydropower Status Report. While large scale projects are often met with resistance in the development stage, the smaller projects are easier to get off the ground and completed.

The effects of climate change on water availability also need considering, as shown by the United Nations deciding that this year’s World Water Day on 22 March would be themed Water and Climate Change. How then does Africa make use of its potential hydropower capacity to help avoid the emission of greenhouse gasses just as changing rainfall patterns reduces
the flow of rivers?

Carole Rosenlund, head of Africa at the International Centre for Hydropower (ICH) in Norway, is looking forward to conversations on this topic and expanding her network at the annual African Utility Week & POWERGEN Africa conference in November this year. The ICH is involved in a number of training programmes across Africa covering various hydropower related topics.

Rosenlund points out that recent years have seen solar, wind and geothermal headlining and playing a critical role in increasing installed capacity and access to electricity in Africa: “These renewables are critical to the energy mix, but being intermittent sources they do not provide for a stable, reliable supply of electricity like hydropower, which remains a more flexible and stable source of energy despite its complexities [in relation to] society and the environment.”

“Nonetheless, hydropower is economically competitive and has been dominant in accounting for a large percentage of Africa’s electricity generation. It is therefore difficult not to be optimistic and enthusiastic about its relevance, knowing that if developed sustainably, hydropower can truly enable Africa to boost its energy output and overcome existing power
supply deficits and electricity access challenges,” says Rosenlund.

Enthusiasm for large-scale hydro-powered projects – as witnessed by enhanced regional collaborations and construction of new cross-border transmission infrastructure – should not in any way diminish the vital role that small-scale hydropower plays in Africa. According to Rosenlund, both are equally valuable in the energy mix and significant game-changers in meeting the energy needs of Africa.

In addition to climate change affecting water availability and flow volumes, other challenges facing the hydro sector in Africa include the continued shortage of skilled manpower, socio-political issues, weak policies and regulatory frameworks, security-related issues and the ever-present demand of finance.

The Small Scale Hydro Day programme at African Utility Week & POWERGEN Africa has been curated by renewable energy and energy access expert Wim Jonker Klunne: “During the last year or so, I’ve clearly seen increasing interest from the investor community in the smaller-scale
projects. There seems to be an understanding that small scale, locally embedded projects can be of interest as well. There is a need for patient capital that is willing to be invested for a long time before returns can b

Klunne says he has recently noticed a more realistic view on what to expect from investors: “Small scale hydro differs from most other renewables in that the upfront investments are relatively high and that the technology is long-lasting. This could negatively affect small hydro when compared to, for example, solar PV. However, I see more and more appreciation of the continuous nature of hydropower generation as it provides grid quality electricity 24/7 without the need for storage.”

The 180kW Semonkong small-scale hydropower plant in Lesotho. Source: Wim Jonker Klunne, hydro4africa

Sebastian Surie, the regional head for Africa at Climate Fund Managers in South Africa, is also optimistic about the role that small-scale hydropower can play in managing Africa’s energy mix. The projects are fast to build, which can help governments deliver sooner on their promise to increase access to reliable electricity for its people. “But a lot more investment is needed, not only in the generation asset but also in transmission and distribution networks. The private sector should be invited to participate in all of these,” said Surie.

Though Climate Fund Managers see a lot of momentum in the small-scale hydro sector across the continent they are cognisant of the fact that some countries struggle to get projects off the ground. This is either because of government’s inexperience with this particular type of project, environmental and social risks, or funding constraints.

Through three funds (offering development, construction equity and refinancing) they try to address the last two concerns by taking on a proactive role: “We see that governments are often hesitant to sign up for long-term offtake contracts that IPPs require, often afraid that they might make mistakes and sign up for the wrong tariff. Indeed, IPPs require a certain leap of faith, but with good advice and proper structuring, project risks can be properly allocated and governments should compel themselves to enter the journey and reduce the yawning power deficit in Africa by signing up for significant amounts of renewable megawatts,” said Surie.

Anton-Louis Olivier, the managing director of REH Group, thinks a greater emphasis on new hydro projects might be inevitable, considering the marked increase in the urgency to decarbonise the global power sector as more and more banks and investors stop financing coal, and in some cases, all fossil fuels for power projects. “There is also a recognition that this decarbonised power sector cannot be achieved with solar and wind power alone. You need hydropower as well. And this is not just large hydro, but also pumped storage hydro and small hydro. In Africa the hydropower resource is still largely underdeveloped, which means that there are still lots of technically good sites available. This is therefore a golden opportunity for the development of sustainable hydropower in Africa.”

He pointed out that large hydro will continue to play a big role in power generation on the continent with the resurgence of projects planned and developed by national governments in Ethiopia, Nigeria and Cameroon, but the number of small-scale hydro IPPs is also growing. “Although small and run-of-river hydro cannot compete on a pure tariff basis with solar PV IPPs, hydro is a much more predictable generator and is, therefore, more suitable to support weak rural grids,” said Olivier. ESI

This year African Utility Week and POWERGEN Africa dedicate an entire day to Small-Scale Hydropower during the conference taking place in Cape Town, South Africa on 24-26 November. www.african-utility-week.com | www.powergenafrica.com