Overcoming Barriers Limiting Photovoltaic Plants in Sub Saharan Africa

Overcoming Barriers Limiting Photovoltaic Plants in Sub Saharan Africa

Photovoltaic Plants in sub Saharan Africa are generally recognized as embodying more elements of sustainable development than a conventional energy projects and sources. Given continental Africa’s relative higher access to intense sunlight and energy deficiency has renewed interest in the development of cost effective renewable energy.

The resulting energy deficiency highlights a scenario that is caused, in part, by a lack of investment in large scale commercialized renewable energy plants which is primarily due to the unwillingness of financiers to provide early stage resources in the developing world. The objective of the model is to arrive at decisions that yield the most profitable outcomes for foreign direct investment (“FDI”) opportunities, while taking into consideration the technical constraints as well as environmental impacts pertaining to Sub-Saharan Africa using Ghana as a case study.

Ghana lies near the equator, this prime location leads to the country having optimal access to solar resource. It is also considered as a country with relatively stable economic growth and a suitable climate for industrial investment. However, there is a growing need for access to electricity. Subsequently, the emerging economy faces energy crisis because the electricity generation lags behind demand. The demand for energy has doubled within the past decade. In addition to this, system losses have increased correspondingly. The annual growth rate for electricity demand in the country has exceeded 10% in the last three years.

Ghana as a nation has been so vulnerable to massive blackouts and load shedding due to several reasons; one reason is the nature of the electrical grid system itself. As a result, there are myriad pieces in the system that can break down. If one piece fails, it may trigger a cascading collapse through the rest of the system (Kwasi, 2014). The same can be said for most of Sub –Saharan Africa and in some cases the transmission system is now being built.

Finally the PV modules cost about 65% of the total capital cost hence an accurate forecast of the performance of the panels is crucial to project investors. To be able to forecast accurately, the panel efficiency and an accurate quantification of power decline over time, also known as degradation rate is essential to all stakeholders. Financially, degradation of a PV module or system is equally important, because a higher degradation rate translates directly into less power produced and, therefore, reduces future cash flows (Short et al, 1995).

Furthermore, inaccuracies in determined degradation rates lead directly to increased financial risk (Short et al. 1995). PV systems are often financed based on an assumed of 0.5 to 1.0% per year degradation rate although 1% per year is used based on warranties (Jordan et al. 2012).

A number of measures from the developing point of view was discussed that can support the development of large scale PV integration in Africa. By the methodology adopted, site, CF and capital cost can reduce the LCOE, and make the project viable. The unreliable features of intermittent energy sources such as photovoltaic’s was discussed below, the mismatch between demand and supply exist during the operation. In order to integrate PV technology the grid capacity must be enhanced. Strengthen transmission and distribution power networks and maintains load levels, the energy storage system can adapt energy production to energy consumption. New technologies must be explored that will safely manage intermittent energy onto the grid.

However with the recent increase in tariffs (domestic users are currently at ranging from $0.09/kWh whilst heavy industrial users like the mines are at $ 0.22/kWh) makes theprogram sustainable.
Finally, for brevity the cost of land was assumed to be the same for all regional capitals, which is not the case and that should be factored in any working model.

The final conclusion is that the frame work and technology that currently exist is sufficient and cost effective to attract FDI, when the right modalities are considered.

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