Power Africa Success Story: Solar Energy Initiative Launched in the Sahel With TBI Support

Energy and Infrastructure

Power Africa Success Story: Solar Energy Initiative Launched in the Sahel With TBI Support

Commentary
Posted on: 8th July 2021
Sergio Portatadino
Technical Lead and Deputy Chief of Party, Power Africa Senior Advisors Group programme

    During the African Development Bank (AfDB)’s 2021 annual meeting, held online last month, AfDB President Dr Akinwumi Adesina reaffirmed the bank’s commitment to investing in the construction of the world’s largest solar zone in the Sahel region of Africa, aiming to provide electricity to 250 million people. The initiative, called Desert to Power (DtP), is a large part of a wider AfDB drive to invest $25 billion by 2025 on climate-related programmes, as well as contributing to national energy-access targets.

    This is the latest effort by development partners and government leaders – of the G5 Sahel countries Burkina Faso, Chad, Mali, Mauritania and Niger initially – to foster a large-scale transformation of energy sectors in the region and make the most of its abundant renewable energy potential. Since 2019 the Tony Blair Institute for Global Change (TBI), working closely with the AfDB and with financial support by Power Africa through the Senior Advisors Group programme, has been supporting government leaders in the preparation of six roadmaps – five national and one regional. This support takes the form of in-depth sector analysis, stakeholder engagement, and policy recommendations promoting investment, sector efficiency, renewable energy and regional integration to support the G5 Sahel countries’ goal of achieving universal access to electricity over the next decade.

    Working Towards Power, Peace and Prosperity in the Sahel

    Working Towards Power, Peace and Prosperity in the Sahel

    DtP is a planning and coordination platform for governments, energy companies, civil society and donors, with a central task force hosted by the AfDB. In 2019, at a high-level summit in Ouagadougou, the heads of state of the G5 Sahel countries backed the AfDB’s DtP initiative to accelerate the transformation of their power sectors and underpin joint efforts to recover after years of insecurity.

    The G5 Sahel countries have been severely affected by terrorism and inter-ethnic violence but have been working closely with the international community on joint programmes ranging from security to agriculture in order to address these crises. Energy is critical to ensuring these endeavours succeed, and is necessary for political stabilisation and prosperity in both rural and urban environments.

    Figure 1 – Map of Sahel region involved in DtP programme

    power africa map illustration

    Tapping the Solar Potential

    Tapping the Solar Potential

    The trading of electricity across borders will form an integral part of DtP, and could provide both enormous opportunities for cost savings and much-needed sources of revenue across the region.

    TBI calculated aspirational targets in terms of connected solar megawatts (MW) by 2030 for each of the G5 Sahel countries. Projects already identified by the governments (representing a combined 2.8GW) were incorporated into the national roadmaps, but challenges remain. As illustrated in Figure 2, more than 3.3GW of new on-grid solar-generation capacity is needed in the sub-region. Most of the identified projects are at a very early stage of development (e.g. signature of memorandum of understanding) and their realisation is some way from being secured. Furthermore, a gap of more than 800 MW remains and risks increasing if some of the identified projects will not reach financial close; in this scenario, new projects would need to be identified, developed and delivered to achieve the 2030 targets.

    Figure 2 – Solar project pipeline in the G5 Sahel countries

    power africa chart illustration

    TBI then calculated the expected benefits from the implementation of DtP’s targets. The analysis showed that installing 3GW of solar photovoltaics over the next decade would save the five governments around $1.8 billion compared with continuing to rely on heavy fuel oil (HFO) or diesel.1 The power sector in all five countries is currently dominated by thermal generation, with fuel often sourced through ad-hoc arrangements. As can be seen in Figure 3, each country would benefit from replacing expensive (and polluting) HFO and diesel generation with solar. Savings increase to 4 billion if accompanied by regional power trading. The figures do not include the potential benefits from carbon credits or the wider economic benefits of an increased and more reliable power supply.

    Figure 3 – Analysis of solar and power trading benefits in the G5 Sahel countries

    power africa chart illustration

    TBI’s Contribution to Desert to Power

    TBI’s Contribution to Desert to Power

    The above analysis is included in the national roadmaps that TBI produced together with the AfDB, along with the governments’ necessary focal points. These strategic documents identify priority investments and reforms for the G5 Sahel countries, such as supporting independent power producers (IPPs) in the solar sector, hybridisation of existing thermal power plants, construction of new transmission and distribution (T&D) networks, and off-grid solutions such as solar home systems (SHS) and mini-grids. In particular, managing intermittent solar power will require a major upgrade of existing T&D infrastructure and power-management systems. To address this, TBI recommended that each country undertake a grid-stability study to identify the operational requirements and investments needed to facilitate increased solar usage. Innovative solar optimisation and storage are priority areas for investment in DtP.

    The investment requirements for reaching DtP objectives are significant – in excess of $10 billion, in addition to what is required to upgrade and extend T&D grids – hence private sector participation is of paramount importance.

    Alongside the five national roadmaps, TBI developed a regional roadmap assessing priority interconnections and regional-scale solar parks with multiple off-takers, as well as national projects that would benefit from regional power markets. The regional roadmap also proposes harmonising national off-grid regulations – such as quality-control measures for SHS – to reduce the cost of market entry for private operators.

    Throughout the development of the roadmaps and other recommendations, TBI consulted closely with national government representatives to ensure that national concerns and priorities were articulated and addressed in the plans.

    Figure 4 – Desert to Power objectives in terms of new installed solar capacity, additional connections, and T&D

    Table showing costs and benefits of projects

    CLICK OR TAP TO OPEN FIGURE 4 IN FULL SCREEN

    *Energy mix computed in % of the 2030 annual gross consumption (in GWh).

    ** The remaining gap is the sum of the national gap and does not consider that Chad and Mali have identified more MW than those targeted by this simulation.

    *** Calculated as the cumulated price differential (at 2030) between HFO long-term unit cost ($150/MWh) vs. solar generation ($65/MWh), according to a linear commissioning schedule.

    Political Endorsement and Presentation of the Roadmaps

    Political Endorsement and Presentation of the Roadmaps

    The five governments officially adopted the national roadmaps in October 2020. These plans were then presented at the AfDB’s Africa Energy Market Place (AEMP) event in December 2020,2 The AEMP was first hosted by the AfDB in 2018, set up as a high-level forum where government leaders, private investors and development partners coordinate and catalyse public and private investments into energy sectors in the AfDB’s member states across Africa. where development partners committed to support the priorities identified to transform power sectors with investment of up to $10 billion over the next decade.3 A part of TBI’s advisory support, support is being provided through the Power Africa Senior Advisors Group programme, with funding from USAID.

    At the event, TBI delivered the opening presentation introducing a ministerial roundtable, as well as presenting in two additional sessions: one on the agriculture-energy nexus – in collaboration with agriculture experts from TBI’s Government Advisory Practice – and another on how best to structure support for IPP investments in the Sahel, with a strong focus on private-sector involvement.

    The AEMP, thanks to the endorsement by the energy ministers of the five Sahel countries involved, succeeded in clarifying the strategy as well as aligning with public and private stakeholders to ensure effective coordination and cooperation. At the end of the conference, development partners and private companies pledged to invest in line with the roadmaps.

    This investment has already begun, as shortly after closing the conference the AfDB approved a grant from its Sustainable Energy Fund for Africa. This intervention will fund technical studies for the integration of solar power into national grids, feasibility studies for solar hybridisation of existing thermal power plants, and support to Chad to integrate its first solar-generation project – the Djermaya solar plant – into the national grid. This work will set the stage for the next phase of investment and implementation, which will see the rollout of solar power across the region, resulting in reduced tariffs, growing foreign investment, less pressure on foreign exchange and a more reliable electricity supply to support economic growth.

    Lead Image: Getty Images

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