Microgrid projects could play a major role bolstering the electric grid in Africa, which needs roughly $1 trillion in investments, according to a white paper by researchers at Boston University.
The power system in sub-Saharan Africa is generally poorly developed and its quality ranges widely from country to country, and even within countries, the researchers said in their paper, “Bringing Power and Progress to Africa in a Financially and Environmentally Sustainable Manner.”
About 600 million people out of Africa’s 1.3 billion population lack electricity, according to the report.
Africa’s weak transmission system, especially between countries, presents a major barrier to large, centralized power projects, the researchers said.
“This fact drives African electricity sector development towards a greater reliance on generation additions in smaller increments — which in turn provides additional impetus for the deployment of solar and wind projects that are already benefiting from declining cost trends,” the researchers said. “The advancement of energy storage technologies will also support an increasing trend towards distributed renewable energy generation assets.”
Mega grids likely to decline in importance
Although Africa’s power sector is ripe for investment, project finance in the continent is risky given poor revenue streams in the electricity sector and country risks, according to the Boston University researchers.
Large-scale electricity infrastructure projects — power plants larger than 100 MW and long-distance transmission lines — will increasingly be deemed too risky for the returns that they can offer, the researchers said.
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