Working Paper 170 - Development Of Wind Energy In Africa

markets have been developing in Africa. There are two key objectives: provide a mapping of windenergy potential and projects developed on the continent so far; and identify impediments hinderingfurther development of wind energy markets on the continent. We use a hand-collected sample of 94wind projects in Africa to perform what we believe is the first continent-wide mapping for the markets.The paper is structured as follows: Section 2 provides an overview of the continent’s wind potentialand installed capacity. Section 3 provides a micro picture of the sector by mapping wind energyprojects, describing their main characteristics and financing sources, and identifying incentives thathave been established to promote the sector. In section 4, physical, technical and economic peculiaritiesthat prevent African countries from harnessing their wind energy potential are examined. Section 5 is aconclusion of the discussions in the paper and also provides policy recommendations.2.0Africa’s Wind Energy Market: Setting the StageTo contextualize the development of the wind market in Africa, it is important to set the backdropagainst which projects are being developed. This includes mapping of locations with wind resourcesand the size of potential output, reviewing the electricity generation mix for currently installedcapacity, as well as assessing the outlook of the industry. The mapping of potential is important toestablish the upper limits of wind energy development on the continent. These limits are mostmeaningful when cast against existing technologies and other important considerations in wind energydevelopment.While multiple dimensions exist on which wind energy potential could be defined, we adopt for thepurposes of this paper, a characterization based on the technical wind energy potential for Africancountries. This approach takes into consideration the physical upper limit given observed wind speeds,technological efficiency, and other structural and ecological restrictions5. We defer to section 4 thediscussion on soft constraints to wind energy development such as legislative restrictions and limitedcompetition in the energy markets.Using a technical feasibility method based on technologies available in 2005, Buys et al. (2007)6 findthat eight African countries, namely; Somalia, Sudan, Libya, Mauritania, Egypt, Madagascar, Kenyaand Chad have large on-shore wind energy potential (Figure 2.1). Mauritania’s potential, for example,is about four times its annual energy consumption in tons of oil equivalent, while Sudan’s is equivalentto 90% of its annual energy needs. Yet, there is variability in terms of geographic location of windpotential across countries. In particular, the study finds that five additional African countries –Mozambique, Tanzania, Angola, South Africa and Namibia – have potentially large off-shore windenergy resources (Figure 2.2).5Wind potential could be (i) theoretic: the physical upper limit of an energy resource, (ii) conversion: theoretic capacityaccounting for technology efficiency, (iii) technical: conversion capacity accounting for other technological, structural andecological restrictions (iv) economic: technical capacity which is economically feasible (Teske et al 2011).6Buys et al. (2007) estimate potential electricity generation from renewable energy resources based on a geo-referenceddatabase of energy indicators from a variety of sources. A key merit of this database is that it adopts a standard unit ofmeasurement – million tons of oil equivalent (mtoe) – which makes estimates ideal for comparison of potential acrossenergy types.2

Figure 2.1: On-shore Wind Potential (mtoe*)Figure 2.2: Off-shore Wind Potential ongoCongo, SeychellesAngolaNamibiaTanzaniaSouth AfricaMozambiqueTunisiaMoroccoCape iaSudanComorosMauritiusCongoCongo, SeychellesAngolaNamibiaTanzaniaSouth Mozambi TunisiaMoroccoCape VerdeChadEthiopiaKenyaEgyptMadagasc rce: Buys et al (2007). The ‘high’ scenario assumes technical feasibility at 2007 wind rotor density for Germany –world leader in 2005 – in terms of installed wind energy capacity; ‘Low’ scenario assumes 60 percent of Germany’sdensity. * Mtoe: stands for million tons of oil equivalent.Figure 2.3: Wind Speeds in Africa at an Altitude of 50 mWind Speed at 50 m (m/s)7.5 and higher7.0 to 7.56.5 to 7.06.0 to 6.55.0 to 6.04.0 to 5.0Less than 4.0Source: AfDB, 2004A study undertaken by the AfricanDevelopment Bank to create a wind atlas forAfrica also revealed significant potential on thecontinent (AfDB, 2004). This study produced aquantitative map of wind speeds on thecontinent (Figure 2.3) simulated using theWind Energy Simulation Toolkit (WEST)7model at an altitude of 50 meters and aresolution of 50 km. Results demonstrated thatthe best wind in Africa is found in the coastalregions of the continent: in the North (Algeria,Egypt, Morocco Tunisia and Mauritania), theEast (Djibouti, Eritrea, Seychelles andSomalia), West (Cape Verde) and South (SouthAfrica and Lesotho). Notably, this studyidentifies wind potential in some countries notidentified by Buys et al in 2007, highlightingthe need for further work to establish accuratedata on wind energy resources on thecontinent.In general though, sources show that the highest wind potential exists in coastal areas, which tend alsoto have both on-shore and off-shore potential (Figure 2.3). With the exception of countries like Chadand Ethiopia, whose topographies give rise to high speed winds in certain high altitude areas, the rest ofmainland (land-locked) Africa’s wind intensity is too low to be harnessed for electric power generation.7The Wind Energy Simulation Toolkit (WEST) is a dynamic three-dimensional model of wind circulation on a horizontalplane which integrates physical phenomena such as radiation and condensation and parametric analyses of effects such asturbulence and convention (AfDB, 2004).3

Despite the high wind energy potential in some African countries, wind powered electricity generationis still very limited, with an estimated 1.1 GW installed capacity in 2011. Notably, wind-basedelectricity contributes less than 1 percent to installed electricity generation capacity on the continent.This share falls below that for OECD countries (3.8 percent) and for non-OECD emerging markets (1.1percent).Among developing countries, Africa’s wind energy potential is comparable to that of Latin Americaand the Caribbean. While the installed capacity for wind in Africa is expected to increase twelvefoldover the next decade, in line with global trends in renewable energy development and technologicalinnovations, the contribution of wind energy to Africa’s electricity generation mix will remain verylimited as illustrated by Figure 2.4. A similar trend is expected for Latin America whose currentcapacity falls below that observed in Africa. According to the International Energy Agency’sprojections (2010) wind energy is expected to contribute only 2% of generated electricity in Africa by2030 under a business as usual scenario, as compared to other conventional energy sources like coal(37%), gas (32%) and hydro (18%); and relative to a global share of nearly 5% of total electricitygeneration capacity.Wind installed capacity in Africa is not only small – both in absolute terms measured by installedcapacity, and relative terms as measured by its contribution to the energy mix – but has also beenhighly concentrated with 3 countries (Egypt, Morocco and Tunisia) holding about 96% of totalinstalled capacity as at end-2011. Further details about this market feature are provided in the nextsection.Figure 2.4: Historic, Current and Projected Trend of Africa’s Electricity Generation Mix100%Geothermal90%Solar PV80%Wind70%60%Nuclear50%Biomass & Source: International Energy Agency 2010420302035

3.0Mapping Wind Energy Projects in AfricaIn this section we first take a historic perspective on wind energy development in Africa to providestylized facts on the industry and its funding sources, then analyze the market’s outlook. Inevitably,there is a strong focus on market leaders including analyses of specific policies, strategies andfinancing instruments adopted in these countries to develop the market. We use a hand collectedsample of 94 wind energy projects, compiled from various data sources including the AfDB’s projectportfolio, Thomson One database, the Wind Power database, the Global Energy Observatory, researchpapers and various websites as detailed in the References section. Our sample is comprehensive with anear full list of completed projects in Africa between 1980 and 2010; and an extensive, though nonexhaustive, list of ongoing and planned projects8.3.1The Profile of Wind Energy ProjectsBased on the individual capacity of projects we identified, Africa’s installed wind energy capacityincreased twelvefold between 1995 and 2010 (Figure 3.1), with most of the growth taking placestarting early 2000. Notably, between 2000 and 2010, Africa’s installed wind capacity grew at a rate of41%; much faster than the average global growth rate of 27%. Africa’s great performance is areflection of the embryonic nature of the African market characterized by limited initial capacity.Indeed, Africa’s growth rate between 2000 and 2010 is very similar to the one reported for otherregions during their early stages of market development (i.e. 35% over the period of 1995-2000).Figure 3.1: Installed Wind Capacity in pacity (MW)A distribution of projects based on theirlocation and stage of development isprovided in Figure 3.2 and Figure 3.3.1200Out of the 94 projects identified, about athird (30) is completed. Of the completed1000projects, 93% came on stream after 2000,800which is consistent with the nascentAnnual capacitynature of this market on the continent.Cumulative capacity600Our database also shows a highconcentration of installed wind capacity,400with 73% of completed projects located in3 North African countries – Egypt,200Morocco and Tunisia – which collectively0account for 96% of total installed capacityat end-2010. Egypt leads this market,contributing 33% of total completedprojects and 50% of total installedSource: Authors’ analysiscapacity on the continent. Egypt isfollowed by Morocco which accounts for 30% of total completed projects and 41% of total installedcapacity. Tunisia has three completed projects, all located at Sidi Daoud, with a total installed capacityof 54 MW (about 5% of Africa’s installed capacity). In southern Africa, Namibia, Mauritius,Mozambique and South Africa already have installed wind energy capacity. So far, South Africa has aninstalled capacity of only 9 MW. In East Africa, two small projects have been completed; one in Kenya8‘Ongoing’ projects are defined as projects for which construction activities have commenced while ‘planned’ projects arethose in the pre-construction phase.5

(Ngong Hills) and the second one in Eritrea (Assab Wind Park). No completed wind energy projectswere identified in West and Central Africa.Figure 3.2: Installed Capacity by Country and Stage of DevelopmentEritreaMauritaniaFigure 3.3: Geographic Location of Projects by Stage ofDevelopmentCape iusGhanaDjiboutiEthiopiaKenyaNamibiaSouth AfricaEgyptMorocco*Capacity (MW)Although North Africa remains theleading region in wind energy4000markets in Africa, southern and3500eastern African countries areexpected to reduce the ectively of combined ongoing2000Completedand planned projects (Figure 3.4).1500For instance, 35% of all plannedprojects are located in South Africa1000followed by Egypt (27%) and500Morocco (21%). East Africa is also0gaining ground with several projectsin the region such as the two ongoingcommercial scale projects in Ethiopiaand Tanzania (Ashegoba andNjiapanda wind farms, respectively);* Excluding the planned Sahara Wind Project (5000 MW)and some planned projects in Kenya,Source: Authors’ analysisDjibouti and Ethiopia. The latterinclude the Lake Turkana wind farm in Kenya, which is the largest wind energy projects planned inSub Saharan Africa. No ongoing or planned projects were recorded for Central Africa.Figure 3.4: Regional Coverage of Projects by Stage ofDevelopment (% of projects)80%70%Complete60%Ongoing and Planned50%40%30%20%10%0%NorthSource: Find Local Weather (wind map) plus authors’ mapping ofwind projects6SouthernSource: Authors’ AnalysisEastWestCentral

Interestingly, concentration is reported for ongoing and planned projects as well with three countries –Egypt, Morocco and South Africa – collectively contributing about 75% of the total number of projectseither ongoing or planned (or 83% of total capacity) on the continent. This is due to, among otherfactors, a stronger political commitment to renewable energy from what are comparatively energyintensive countries and the high electricity access rates that already exist in these countries (see section4.2).It is worth noting that the bulk of Africa’s completed projects are located either in coastal areas, or siton islands. The exception is Kenya, which has its largest potential inland around the Lake Turkanahighlands whilst having significant coastal potential as well. Both its pilot facility and planned projectsare located inland. The wind farms in Algeria, Nigeria and Tanzania are also located inland.The small size of the African wind market documented earlier reflects not only the limited number ofwind farms but also the small scale nature of the projects. The individual capacity of most projects inAfrica, whether completed, ongoing or planned, remains small and broadly ranges between 1 MW and100 MW (Figure 3.5). Only 3 completed projects have installed capacity exceeding 100 MW (ZafaranaVI and VIII in Egypt and Tangier in Morocco). Notably, most

Development of Wind Energy in Africa Alli D. Mukasa1, Emelly Mutambatsere2, Yannis Arvanitis3, and Thouraya Triki4 1 Investment Officer at the Private Sector and Microfinance Department of the AfDB (a.mukasa@afdb.org) 2 Principal Research Economist at the Development Research Department of the AfDB (e.mutambatsere@afdb.org) 3 Research Economist at the Development Research Department of the .