Africa turns to sunshine to meet surging power demand

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JOHANNESBURG (Reuters) - Cut in half by the equator, sunshine is one thing that Africa has in abundance.

Now a growing number of African enterprises are tapping this under-utilised source to keep their businesses running.

One of Kenya's largest tea producers, Williamson Tea, has installed a 1 megawatt (MW) plant at an estate in the Rift Valley, slashing grid reliance by nearly a third and reducing the need for back-up diesel generators.

To put this in perspective, a single MW can generally power several hundred middle-class households.

SolarCentury, the company behind Williamson Tea's installation, has also been contracted to build an 858 kilowatt plant on the parking lot of a Nairobi mall, and says there is a potential 40 MW pipeline across four east African countries.

"One thing many countries in Africa have is plenty of sunshine and now we are at a stage where the cost of solar technology can enable them to use that sunshine to get low cost power," said SolarCentury's regional director Dan Davies.

The British-based firm targets intensive energy users such as flower farms that need to keep cut roses refrigerated well in advance of Valentine's or Mothers' Day.

Over-stretched African national grids often lapse into darkness as rapid economic growth piles pressure on electricity networks already lagging demand.

The 48 countries of sub-Saharan Africa, with a combined population of 800 million, produce roughly the same amount of power as Spain, a country of just 46 million people.

To keep machines running, companies have had to invest in diesel generators, one of the more expensive sources of power. Governments too are contracting independent producers to run expensive heavy-oil-fired generators to plug network shortfalls.

Most sub-Saharan countries do not have much solar energy and depend on hydro-power, coal or natural gas to turn turbines.

Generators using gasoline or diesel cost at least $300 per megawatt hour (MWh), estimates the International Energy Agency (IEA), while solar power is nearly as expensive at $200 per MWh.

With hydropower typically much cheaper, at less than $75, and coal generation as little as $50 per MWh, it will take decades for solar to reach cost parity.

"If it is replacing or displacing oil-fired power, then it would make sense," IEA analyst Brent Wanner said, adding that solar will remain most suitable as an option in remote areas.

South Africa this week added 96MW to its grid with the launch of the largest solar park on the continent in the remote and sparsely-populated Northern Cape province.

Africa's most advanced economy is a solar power outlier, with over 500MW installed.

RWANDA NOW 7 PERCENT SOLAR

There is also a movement on the world's poorest continent towards green alternatives such as geothermal, solar and wind, with some countries using incentives such as decades-long power purchase agreements to entice independent producers.

Some are also working on legislation to govern purchases of solar power from small producers. Kenya is piloting a metering project with privately run Strathmore University to import surplus electricity from a 600kW roof-top plant.

In Rwanda, U.S.-based Gigawatt Global connected an 8.5 MW farm on rolling green hills east of Kigali to the grid earlier this year. The $24 million farm now accounts for 7 percent of Rwanda's power supply.

Gigawatt Global's Sarah Halevi said the company was seeing strong demand in both west and east Africa. The company plans to build 200MW within the next 18 months in Nigeria and is targeting a 1000MW pipeline by 2020.