guy doyle - green growth diagnostics for africa
TRANSCRIPT
Unlocking Investment in Africa’s Renewables
Dr Guy Doyle, Chief Economist
Insights on RE
support programmes
in Sub Saharan Africa
27/01/2017 2
• About Mott MacDonald
• Context for renewable energy IPPs
• REIPP and Scaling Solar
• Any solutions?
Agenda
Mott MacDonald | Opening opportunities
Who we are
USD1.7 billion turnover
Multidisciplinary
Multisector
Global presence
Over 17,000 staff
Employee ownedSUSTAINABLE
SOLUTIONS
Ranked
14
World class engineering,
design, management
& development
consulting firm
Principal offices
Mott MacDonald | Opening opportunities
AWARDS IN THE LAST SIX YEARS FOR
INNOVATION & TECHNICAL PROWESS600
Awards
27/01/2017 7
Full range of renewable technologies
Solar PV
Biomass and recovered
fuels
Onshore windSolar thermal
(CSP)
Offshore wind
Hydro
Geothermal Marine
Services
• Environmental
• Social
• Economics
• Finance
Mott MacDonald | Opening opportunities
Context for RE IPPs in Sub-Sahara Africa
Mott MacDonald | Opening opportunities
IPPs emerges as key trend as governments,
supported by IFIs, have sought to encourage
private capital and best practice technology
- Often initially as unsolicited offers
- Moving towards predominantly open
procurement – FITs and auctions
RE becoming attractive
• Falling costs
• Indigenous source
• Availability of external
funds
• Seen as being green
REIPPP blazed the
path
But others at an early stage!
REIPPP delivered:
• 5 auction rounds
• >7GW awards
• Huge cost reduction
• No legal challenges (from sponsors)
• High delivery rate
27/01/2017 Mott MacDonald | Power Middle East
Challenges and parties (often divergent) interests
• Legacy commitments – special deals and undefined commitments
– complicates move to open procurement
• Lack of experience/ capacity of procurement bodies to run tenders
• Time taken to establish capability – often unclear who should lead
• Securing land and agreeing compensation terms often difficult
• Public acceptability of some projects/lines
• Grid connection/ evacuation/system integration/space on system
• Offtake risks – payment and dispatch – need for guarantees
• Concerns about high initial costs
• Small scale of markets reduces interest from major IPP players
Donors’ interests
• Short delivery time-scales
• Preference for own nationals
• Want photographable assets
Hosts’ interests
• Wants solution quickly
• Can’t afford upfront funds
• Focus on value for money
• Often can’t agree who leads
Sponsors’ & lenders interests
• Want open/transparent
procurement
• Protection from key risks
• Prospect of future chain
Any Solutions?
Mott MacDonald | Opening opportunities
Clear endorsement at highest level of importance of open procurement
including outline of treatment for any legacy projects
Confirm willingness to switch to auctions
Engagement with all stakeholders and agreement on who is to lead
Support capacity building for procurement activities
even if only for oversight…..using Scaling Solar type mechanisms
Do the homework on what is required in guarantees
Outline 10-year plan for capacity/ technologies to be awarded
Making sure grid capacity is available
Start with demonstration of solar PV at selected locations
extend to other RE technologies
