My key takeaway from the Africa Solar Industry Association’s inaugural Africa Solar Outlook published in Q1 this year was that 37 countries in the world had joined the Gigawatt Club (installed more than 1GW of solar energy). Still, only two of those are in Africa, namely South Africa and Egypt.
However, nine African countries could soon join the club. The general outlook is based on announcements by governments and private developers. The most recent such information confirms the report’s analysis – that being South Africa’s REIPPP programme’s bid round 5 (see milestones below) and the government’s move to increase the embedded generation threshold from 1MW to 100MW.
Much has been said about the threshold announcement, but what this means for the commercial and industrial (C&I) market specifically is what does have my attention.
Every renewable megawatt that comes online—regardless of who owns it and who the offtaker is—supports our energy transition. That’s why I have an interest in the pan-African C&I sector, which combined, can join the Gigawatt Club.
Based on data collected by AFSIA, C&I could represent 30-40% of all solar capacities installed in the coming years. “So far, we have identified more than 6,200 large-scale, C&I and minigrid project across the continent. Out of these 6,200, 2,400 are already in operation and are composed by C&I projects for more than 80%,” states the report.
However, without some form of storage, the C&I market share for renewables growth will remain decentralised. In itself, decentralisation is not a negative strategy but having the C&I market playing an active role in the grid is a worthy goal.
At the ESI Africa news desk, we have noticed an increase in the uptake of solar hybrid solutions. However, due to COVID-19 complications, the price of components has increased, leading to a somewhat stagnating market.
The cost of the system is a factor for the C&I renewable customer. Still, electricity tariff increases and the unreliability of the grid network is prompting buy-in for solar solutions.
Speaking with Yewande Olatunde, the technical expert and business developer on C&I solar projects at Starsight Energy in Nigeria, she also points to the need to reduce costs being a deciding factor.
She explained: “The driving force for most C&I customers is first energy cost reduction on their monthly or annual bills as this is impacted by the heavy energy consumption mostly in megawatts of electricity. The second common influencer is energy efficiency which enables them to develop a conservative culture, thereby reducing their energy end-use, carbon footprints and boosting the company’s sustainability outlook.”
According to Olatunde, many policies and regulations have been developed and enacted in Nigeria, but “most of them lack the implementing strategy and enabling environment for the C&I market. The National Renewable Energy and Energy Efficiency Policy (NREEP), NERC Regulations and other policies need to be improved.”
Olatunde goes straight to the crux of this market. She explains that energy storage is needed to bridge the gap between demand and supply of energy, increase the grid’s stability, provide flexibility in conventional power plants’ operation and balance the variability of renewable energy. “Energy storage is a key power infrastructure for the C&I market. There are diverse storage systems available such as the pumped hydro, supercapacitors, hydrogen storage, compressed air systems and batteries.” However, she does stress that each of these technologies has different performance levels.
This level of diversity in the market can be confusing for newcomers who have decided to invest in an energy storage system. The power industry is not their core business and should not impact internal resources in the procurement process. Once installed, the power and storage system should again not strain resources in the management and maintenance of the system.
Storage solutions have become an essential technology to increase solar PV penetration in terms of reliability and efficiency. This technology also reduces fuel consumption, especially in C&I applications. Do you have questions about how best to add your solar and storage system to the Gigawatt Club? Send these to me and I will find an expert to respond.
PS To the women at our utilities, in municipalities and in the private sector – I salute the work you are doing and wish you a fabulous International Women in Engineering Day today!
Until next week.