The forecast was made in a report from Frost & Sullivan, which states that the development will be mostly driven by off grid solar projects, with a growth rate that is expected to be higher than 10% a year over the next five years.
The report points out that several governmental agencies are becoming fully aware of the key role played by renewable sources to ensure energy security and electricity supplies in rural areas. Therefore, incentivating regulations have been applied and, even if the latter have been implemented at a slow pace and have met the opposition of still monopolizing state utilities, investment value will triple between 2010 and 2015.
As regards grid-connected facilities, the most active countries are South Africa, Kenya, Nigeria and Uganda. Also they are expected to soon adopt supporting schemes with direct payment of the grid-connected renewable energy.
New analysis from Frost & Sullivan finds that several wind energy projects in North Africa that are currently in the development stage will be operational in 2010. This will significantly boost the installed wind power capacity in Africa. The off-grid solar power market in Sub-Saharan Africa is expected to grow at a compound annual growth rate (CAGR) of more than 10 per cent between 2009 and 2015.
"South Africa and Kenya, leaders in the RE industry, have announced feed-in tariffs for RE projects along with other regional governments that are currently investigating opportunities for RE projects," says Frost & Sullivan Energy and Power Systems Programme Manager Cornelis van der Waal. "Many developmental agencies consider small-scale RE projects as the most feasible solution for accelerated rural electrification and therefore are increasingly investing in medium-sized projects, especially wind and solar projects."
However, the slow pace of regulatory reform and the continued monopolies of state utilities form a challenge to large-scale RE projects. A revamp of the industry is needed to accelerate the pace of development and the private sector, in particular, should be given incentives to invest in such a sustainable sector.
"For example, in South Africa, there is huge investment planning towards the development of a large scale wind farm industry which is currently hampered by RE caps and time-consuming power purchase agreements (PPA) signings," explains Van der Waal.
South Africa, Kenya, Nigeria and Uganda are exploring the inclusion of grid-connected solar power into the national RE feed-in tariff (REFIT) policy. Companies with local manufacturing capacity will be the first choice to supply the solar photovoltaic technology.
"South Africa is expected to approve the renewable energy feed-in tariff for grid-connected solar power in 2010," concludes Van der Waal. "This will allow companies with local manufacturing capacity to capitalise on the feed-in tariff laws."