En­ergy in­vestors flock to so­lar

The Sunday Mail (Zimbabwe) - - BUSINESS - Africa Moyo Busi­ness Re­porter

THERE is a wave of ap­pli­ca­tions by po­ten­tial in­vestors to in­vest in so­lar en­ergy gen­er­a­tion, amid in­di­ca­tions that the lower gen­er­a­tion costs for the re­new­able en­ergy source — com­pared to hy­dro-elec­tric­ity — is the ma­jor at­trac­tion.

In re­cent weeks, the Zim­babwe En­ergy Reg­u­la­tory Author­ity (Zera) has been run­ning ad­verts to no­tify the na­tion of firms that have ap­plied to in­vest in so­lar en­ergy.

Sev­eral com­pa­nies — in­clud­ing the Zim­babwe Power Com­pany (ZPC) — have ap­plied to start so­lar power gen­er­a­tion projects.

The big­gest project has been ap­plied for by ZPC, which wants to set up three so­lar power plants — each with 100MW ca­pac­ity — to be si­t­u­ated in Gwanda, Ma­tobo and Mun­y­ati.

ZPC wants to con­struct, own, op­er­ate and main­tain the pro­posed 100 MW In­sukamini so­lar pho­to­voltaic power plant at Valin­dre Farm of Ma­tobo dis­trict, Mata­bele­land South Prov­ince.

The Min­istry of Fi­nance and Eco­nomic De­vel­op­ment has al­ready awarded pre­scribed as­set sta­tus and na­tional project sta­tus to the Gwanda So­lar Project and the Gairezi project.

ZPC manag­ing di­rec­tor En­gi­neer Noah Gwariro had hinted on Au­gust 8, 2017 that the na­tional power gen­er­a­tion firm had been granted ap­proval by the State Pro­cure­ment Board (SPB) to “ne­go­ti­ate all so­lar projects in view of the down­ward trends in so­lar project prices”.

As from 2009 to Au­gust 31, 2017, Zera has re­ceived and pro­cessed 17 ap­pli­ca­tions and, if con­sum­mated, the projects have ca­pac­ity to gen­er­ate 684,8MW.

The fig­ure is just about 65MW shy of Kariba South hy­dropower sta­tion’s cur­rent in­stalled ca­pac­ity, and would come in handy, es­pe­cially at a time the na­tion is liv­ing with the threat of be­ing switched off by South African power util­ity Eskom over debt es­ti­mated at US$45 mil­lion.

The com­bined es­ti­mated out­put from the so­lar projects is 1 555,029Gwh.

Eng Magombo said the surge in ap­pli­ca­tions to de­velop so­lar en­ergy projects could be mo­ti­vated by the fact that project de­vel­op­ers have re­alised that Zim­babwe has so­lar po­ten­tial with a ra­di­a­tion of over 20 mega joules/ square me­tre (m2), which comes at “no cost as there is no fuel pur­chase agree­ment re­quired to op­er­ate a so­lar plant project”.

Twenty mega joules per square me­tre trans­late to an av­er­age of 5,5 hours of peak sun­light per day.

“This ex­plains why we have wit­nessed a num­ber of so­lar ap­pli­ca­tions more than any other tech­nol­ogy. The in­crease in ap­pli­ca­tions for so­lar projects is also at­trib­ut­able to the in­creased aware­ness glob­ally on the need to de­velop clean sources of en­ergy to curb emis­sion of green­house gases.

“The in­crease of these ap­pli­ca­tions is also stim­u­lated by the coun­try’s elec­tric­ity sup­ply deficit which is cur­rently met by im­ports. In ad­di­tion, so­lar en­ergy is a clean and re­new­able source of en­ergy and, as such, so­lar projects read­ily ac­cess in­vest­ment funds in a bid to com­bat or mit­i­gate cli­mate change,” said Eng Magombo.

Fun­ders of power gen­er­a­tion projects have largely be­come averse to un­tie their purse strings for en­ergy projects such as ther­mal, which is seen as harm­ful to the en­vi­ron­ment.

There is a cam­paign around the globe to en­sure a dras­tic cut or elim­i­na­tion of all causes of gaseous emis­sions that neg­a­tively im­pact on the en­vi­ron­ment.

This has made so­lar en­ergy, which is re­new­able, a nat­u­ral mag­net for fund­ing.

Lower cost of gen­er­a­tion A re­new­able en­ergy feed-in tar­iff study which was up­dated last year shows that the cap­i­tal costs for set­ting up a mini-hy­dro power sta­tion is US$2,400/kW.

How­ever, set­ting up a so­lar gen­er­a­tion project costs US$1,150/kW, with pro­jec­tions that the costs can go fur­ther down.

Set­ting up a 2MW hy­dropower plant would there­fore re­quire a cap­i­tal in­vest­ment of about US$4,8 mil­lion while a so­lar plant with the same ca­pac­ity would cost around US$2,3 mil­lion.

This im­plies that a so­lar project costs al­most half of what one has to shell out for a mini-hy­dro project.

Eng Magombo said the costs of set­ting up en­ergy projects of that mag­ni­tude vary

de­pend­ing on the source of fund­ing, with funds ob­tained from pri­vate play­ers usu­ally con­sid­er­ably high.

“The above es­ti­mates ex­clude the cost of fi­nance, which dif­fers ac­cord­ing to source and ten­ure.

“The cost of projects funded by funds of pri­vate fi­nanciers are likely to be higher com­pared to those funded through Gov­ern­ment to Gov­ern­ment ar­range­ment,” said Eng Magombo.

The per­spec­tive rings true for the re­cently com­mis­sioned 1,6MW Kupinga Hy­dropower Sta­tion in Chipinge, which was funded to the tune of US$5,7 mil­lion by Old Mu­tual Zim­babwe.

As part of re­duc­ing the cost of in­vest­ing in so­lar projects, and cut down on grid elec­tric­ity us­age, Gov­ern­ment is craft­ing a Re­new­able En­ergy Pol­icy and So­lar Wa­ter Heat­ing Reg­u­la­tions.

Zera re­ferred ques­tions per­tain­ing to the sta­tus of both the pol­icy and reg­u­la­tions to the Min­istry of En­ergy and Power De­vel­op­ment.

How­ever, no com­ment could be ob­tained as both En­ergy and Power De­vel­op­ment Min­is­ter Dr Sa­muel Un­denge and the min­istry’s Per­ma­nent Sec­re­tary, Mr Part­son Mbiriri, were not an­swer­ing their mo­bile phones by the time of go­ing to print.

In Septem­ber last year, Zera said the pol­icy was in the At­tor­ney-Gen­eral’s Of­fice.

The Re­new­able En­ergy Pol­icy en­cour­ages adop­tion and de­ploy­ment of green en­ergy, with em­pha­sis on de­vel­op­ment of so­lar power.

At the mo­ment, all so­lar equip­ment — ex­cept for bat­ter­ies — is com­ing in duty free, as part of ef­forts to re­duce the cost of set­ting up so­lar projects.

This was en­abled through Statu­tory In­stru­ment 47 of 2010.

Only Value Added Tax (VAT) is payable on all prod­ucts.

Eng Magombo said it is crit­i­cal to have so­lar power as part of the en­ergy mix as it helps re­duce the coun­try’s car­bon foot­print by re­duc­ing green­house gas emis­sions.

So­lar is also avail­able for over 300 days per an­num in Zim­babwe and elec­tric­ity sup­ply from so­lar is re­li­able and sus­tain­able.

“So­lar en­ergy can (also) be used mainly to meet the coun­try’s day de­mand, thereby al­low­ing a hy­dropower sta­tion like Kariba to con­serve wa­ter dur­ing the day as well as re­duc­ing elec­tric­ity im­ports.

“Its porta­bil­ity al­lows it to be eas­ily dis­trib­uted in re­mote ar­eas to al­low for first-tier ac­cess to mod­ern en­ergy which pro­vides en­ergy for en­ter­tain­ment, light­ing and pow­er­ing ICT gad­gets in homes and schools.

“At house­hold level, it is cheaper and is also scal­able, thus meet­ing the min­i­mum re­quire­ments which makes it ideal for iso­lated ar­eas pro­vided it comes with a ro­bust stor­age sys­tem,” said Eng Magombo.

None­the­less, so­lar en­ergy has its own down­side, in­clud­ing that it is ex­pen­sive once com­bined with stor­age for it to meet even­ing peak de­mand.

Sim­i­larly, the tech­nol­ogy re­mains in­ter­mit­tent as out­put fluc­tu­ates with changes in con­di­tions of the weather, while the qual­ity of equip­ment and the in­stal­la­tion process can also have an im­pact on the qual­ity of power sup­ply and the dura­bil­ity of the sys­tem.

Not a lo­cal phe­nom­e­non

The rise in in­vest­ments in so­lar is not lim­ited to Zim­babwe. Al­ready, so­lar en­ergy con­trib­utes 20 per­cent to Ger­many’s en­ergy mix and the In­ter­na­tional En­ergy Agency’s yearly re­view of re­new­able en­ergy points to con­tin­u­ing mas­sive up­take in the share of global elec­tric­ity gen­er­a­tion from re­new­able sources’ cur­rent 24 per­cent to 30 per­cent by 2022.

Den­mark is ex­pected to be­come the world leader with 70 per­cent of its en­ergy com­ing from wind and so­lar power.

It is ex­pected that Ire­land, Ger­many and the United King­dom will get over a quar­ter of their en­ergy needs from wind and so­lar.

The IEA fore­casts that Aus­tralia’s re­new­able gen­er­at­ing ca­pac­ity could grow by 49 per­cent in the next six years, hit­ting 28,4 gi­gawatts.

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