Bank expects Covid-19 crisis to accelerate renewables roll-outs in Africa

7th August 2020

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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The Covid-19 crisis has highlighted the need for Africa to develop flexible energy systems in which renewables and decentralised technologies play a far greater role, says financial services provider Standard Bank Group.

The pandemic has led to a global decline in electricity demand as commercial and industrial activity slows and people work from home.

In South Africa, for example, electricity demand declined by as much as 7 500 MW on average in March and April – the height of the national lockdown.

However, demand is recovering in most African countries as economies reopen.

Considering that numerous African countries entered the crisis with an energy supply shortfall, governments will need to procure more power in the months ahead. The fastest and most cost-effective way to address the supply gap is through more flexible technologies – for example, renewable power projects, which means the crisis may prompt African governments to deploy renewables at a much faster rate than before, Standard Bank notes.

“Given that renewables are currently the most economically viable source of energy in most countries, we expect the Covid-19 crisis will accelerate the pace at which these technologies are adopted on the continent, with hydro, wind and solar being the most attractive technologies,” says Standard Bank power head Rentia van Tonder.

While renewable-energy units have historically only been able to provide an intermittent supply of electricity, they will become increasingly reliable, owing to rapid advances in storage technologies, which are becoming more affordable.

However, for the time being, there are no utility-scale battery storage facilities in Africa, the bank notes.

With electricity demand recovering, South Africa’s Department of Mineral Resources and Energy recently announced that it was preparing bid documentation for the emergency procurement of 2 000 MW of generation capacity.

Storage Technologies Given the time constraints, renewables may be best suited to plug the gap, and there are signs that these projects could include investments in storage technologies, which would further enhance the flexibility of these systems. Gas-to-power projects will also be able to provide dispatchable power solutions, complementing renewables, says Standard Bank.

Alongside launching Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme, finalising plans to enable the private sector and municipalities to secure their own power supplies would also be a welcome development in South Africa, the banking group highlights.

Decentralised green energy solutions, which promote innovation as they are purpose-built and not connected to national grids, will continue to gain momentum as municipalities, mining houses and industrial firms seek to ensure cost certainty and reliability of supply.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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