Strong economic growth in East Africa, which is driving demand for electricity, both on- and off-grid, could also stimulate the territory’s renewable-energy market, new analysis by growth consulting firm Frost & Sullivan asserts.
The report, titled 'Strategic analysis of the renewable energy market in East Africa', covers Kenya, Ethiopia, Tanzania, Uganda and Rwanda.
It suggests that, with supportive policy and incentives, such as feed-in tariffs, the renewable-energy market could be poised for significant growth.
“Growth in the renewable-energy market is being driven by the pressing need for both on- and off-grid generation capacity across the region,” energy and power research analyst Gareth Blanckenberg reports.
“Renewable energy presents an attractive solution for the region, owing to its relatively fast build times and the interest it can generate from private project developers.”
He tells Engineering News Online that the electricity grids within the countries in the East African region are fairly limited in terms of their reach, creating a large scope for off-grid renewable-energy projects. There are already feed-in-tariffs in existence in Kenya and Uganda and a small project programme in Tanzania.
The Rift Valley has an abundance of geothermal resources, particularly Kenya, while there are also small hydropower possibilities in high-rainfall territories, such as Rwanda. Kenya’s north-west is suitable for wind, Ethiopia has material solar resources, while Uganda has solar and geothermal potential.
“The renewable-energy market is only really starting to open up right now, so it is unlikely to change markedly in the next five years. Longer term, the region should see substantial development that can support the currently rapid economic growth,” he notes.
A number of countries in the territory are already experiencing strong gross domestic product growth rates and are forecast to expand by more than 6% a year.
However, political stability, a strong regulatory regime and procurement policies that are supportive of private sector participation will be vital to encourage investors to pursue renewables projects.
“Within the East African region, there are pockets of stability that have the natural resources as well as the feed-in-tariffs required to ensure the successful development of large-scale renewable-energy projects. Investments in renewable-energy projects on the continent have already quadrupled recently; with most of this investment being in East Africa,” he concludes.