Solar power could drive Africa’s energy transition

Sun and plenty of space – the African Continent has perfect conditions for solar energy. However, a large part of this potential remains untapped. In 2022, a mere 0.5 percent of all new solar capacity was installed in Africa, i.e. roughly one gigawatt (GW). Why this is a positive sign nevertheless and makes this part of the world an attractive place to invest in sustainable electricity generation methods was analysed by experts of the German Solar Association (BSW) in their Intersolar Solarize Africa Market Report 2023.

One of the biggest challenges facing Africa is that roughly half of its 1.3 billion residents still has absolutely no access to electricity. In rural areas, this quota is often below 20 percent, while the situation is the worst in the sub-Saharan region. And it was exacerbated by the COVID-19 pandemic. Furthermore, the continent strongly depends on fossil fuels, which experts estimate account for 80 percent of the electricity mix.

Solar energy could provide access to electricity

BSW experts claim that African nations should thus switch to renewable energy both swiftly and on a large scale. They are convinced that this is the only way to achieve the Sustainable Development Goals (SDG) of the United Nations – above all SDG 7 – universal access to affordable, reliable and modern energy – and hit the targets of the Paris Climate Agreement. The study’s authors believe that solar power is the most promising option, as the technology already represents the lowest-cost method of generating electricity in many regions and lends itself perfectly to distributed solutions.

By the end of 2022, Africa had installed solar assets with a combined estimated capacity of 11.6 GW. The lion’s share could be found in South Africa (5.8 GW), Egypt (1.7 GW) and Algeria (0.4 GW). Whereas, according to the BSW, most of the capacity was attributable to grid-connected large-scale systems, small, often grid-independent assets were the front-runners in terms of sheer numbers. This is because people are increasingly going for mini-grids, which work independent of national transmission networks, or stand-alone systems such as grid-connected rooftop solar PV systems.

Substantial private investment necessary

This provides investors with myriad opportunities, as underscored by the report, which refers to an IEA study from 2022. This analysis concludes that, by 2030, some 42 percent of the African population could gain access to electricity through network expansion, another 31 percent via mini-grids, and 27 percent by means of grid-independent solutions. This would require 25 billion US dollars in annual investments, the study claims.

However, this is precisely where a further hurdle must be overcome. According to the experts, a large portion of the funds would have to come from the private sector. Due to market uncertainty, this investor group has been fairly reserved thus far. In view of the positive developments and the huge demand forecast, however, this may change.

Several countries recently made significant progress in terms of solar expansion:

• In Angola, an estimated 284 megawatts (MW) of capacity went online in 2022. According to IRENA, this was the biggest addition of all African nations.
• In early 2023, Egypt started building a 560 MW solar farm.
• February 2023 saw Nigeria’s largest solar farm to date (10 GW) connect to the grid.
• In 2023, Ethiopia signed an agreement with Masdar City, United Arab Emirates, to develop two solar farms with an aggregate capacity of 500 MW.

Solar capacity could rise to as much as 3,700 GW

Moreover, various scenarios demonstrate that the speed of expansion could increase rapidly, with installed capacity growing several times over by as early as 2030. For instance, the BSW refers to predictions by the IEA and Finland’s Lappeenranta-Lahti University of Technology. According to the IEA, capacity would have to advance to 175 GW by 2030 and to 852 GW by 2050 in order to hit net zero. The Finnish researchers are convinced that 417 and 3,675 GW are conceivable in view of the rising demand of the growing population.

Conditions favouring production of green hydrogen, including from solar power, could be an additional factor. This hydrogen could prospectively be exported to Europe. In turn, this could provide an incentive to European investors to become involved in such undertakings.

Floating PV with major potential

The report has pegged yet another technique as offering promising investment possibilities: floating PV. These are solar farms installed on bodies of water. Floating PV systems appeal for space reasons, because they do not compete with areas used for other purposes such as agriculture. In addition, algae formation beneath the farms is reduced, which improves water quality. And, to round off the advantages, water evaporation decreases. In Africa where over a billion people currently lack secured access to clean drinking water, floating technology could be a gamechanger in two respects. Companies the likes of RWE are already putting floating PV to the test in the first applications.

The BSW holds this potential to be enormous – above all south of the Saharan Desert. Based on estimates, there are over 100,000 square kilometres of artificial freshwater reservoirs, on which floating PV systems could be installed. Usage of just one percent of these areas would translate into 100 GW in capacity and 167 terawatt hours in annual electricity generation – enough to meet about 20 percent of current demand. South Africa, Nigeria and Zimbabwe could play a pioneering role, as they rank among the world’s top 20 in terms of floating PV potential.

Global progress enables leapfrog effect

The experts forecast that conditions on the solar market will improve constantly in the years ahead and that the sector will also increasingly benefit from political tailwind in Africa. Moreover, the continent can reap the benefits of technological progress and cost reductions already achieved. The best case scenario could actually be a leapfrog effect, as African nations could skip full-coverage electricity supply based on fossil fuels and move directly to renewable energy.