The Angolan government is supporting the development of several new solar power projects, in an effort to accelerate the country’s energy transition and reduce reliance on diesel- and coal-fired power generation. From a regulatory perspective, Angola’s Ministry of Energy and Water (MINEA) is responsible for supervising the development of renewable energy projects and promoting rural electrification initiatives in the country. Solar photovoltaic (PV) development aligns with the Angola Energy 2025 long-term plan, whose primary goal is to foster inclusive and sustainable growth of the country and provide basic energy services to the entire Angolan population.
It also falls under Angola’s Action Plan of the Energy and Water Sector 2018-2022, which targets the establishment of an additional 500 MW of renewable energy by 2022, with a focus on utility-scale solar projects.
Following the U.N. Climate Change Conference that took place in November 2021, the Angolan authorities have set an ambitious target to derive 70% of its energy matrixfrom renewable sources by 2025. While the current national electrification rate is below 50%, the country has plans to increase this to 60% by 2025, on the back of clean energy development. Angola is home to abundant sunshine for much of the year, with a global annual horizontal solar radiation estimated between 1,370 and 2,100 kWh per cubic meter per year. As a result, the country could have as much as 55 GW of potential solar power capacity.
First Solar PV Plant Comes Online
In July 2022, Angola inaugurated its first solar PV plants, developed by a consortium led by Portugal’s MCA Group and the U.S.’s Sun Africa. The two plants– located in Biópio and Baía Farta – have a combined installed capacity of 285 MW and will supply electricity to 1.5 million households. With an installed capacity of 189 MW directed to over one million households, the Biópio photovoltaic power plant represents the largest solar power project in Angola, made up of nearly 510,000 solar panels. Meanwhile, the 96 MW Baía Farta plant will direct power to the national grid, targeting half a million consumers, and comprises over 260,000 solar panels.
The two projects are a part of seven total power plants set to be constructed across Benguela, Huambo, Bié, Lunda-Norte, Lunda-Sul and Moxico Provinces, with a view to delivering 370 MW of installed power capacity. The seven solar plants will supply clean electricity to around 2.4 million Angolans and are expected to be operational by the end of this year. In addition to delivering electricity to rural areas, the consortium’s activities are playing a critical role in technical capacity-building and job creation. Due to their technology-intensive nature, solar PV projects provide a valuable opportunity for Angolan engineers to learn and develop essential skills needed to construct, operate and maintain renewable energy installations.
Leveraging PPPs to Finance the Sector
Because solar PV projects can also be capital-intensive, the Angolan Government has pursued public private partnerships (PPPs) as a means of generating the financial and technical resources to execute planned and in-progress solar projects. In May 2022, renewable energy company Solenova – a joint venture between Italy’s Eni and national oil company Sonangol – laid the first stone for the construction of a 50 MW photovoltaic power plant in Caraculo in Namibe Province. The project comprises two phases – the first of which involves installing photovoltaic panels with a capacity of 25 MW. Construction is currently being carried out by Saipem, with operations for the first phase expected to begin in Q4 2022. The project will not only reduce reliance on diesel for power generation, but also improve access to electricity and cleanwater for the local population. Furthermore, power generated from the photovoltaic panels at the Caraculo plantwill be used to supply electricity to southern Angola’s territorial grid.
The Quilemba Solar Power Park is another major photovoltaic project underway in Angola, backed by PPP among France’s Total Eren (51%), Angola’s Sonangol (30%) and local renewable developer Greentech (19%). Located in Lubango, the capital of Angola’s Huíla Province, commercial operations of the 35 MW solar plant are expected by the end of 2023. The three stakeholdersare uniting to finance, construct and operate the plant, which holds an estimated cost of $82 million. When finalized, the Quilemba Solar Park will help Angola achieve substantial savings in fuel oil used in thermal power plants, as well as expan the role of photovoltaic energy utilization in southern Angola.
Off-Grid Solar Systems to Boost Rural Electrification
A number of off-grid solar systems are being put in place throughout Angola’s provinces, particularly those in rural areas that can most benefit from decentralized energy solutions. Angola has over 9.6 million inhabitants who live in rural areas and much of this population still utilizes firewood and coal as their primary source of energy generation. This presents an environmental challenge, not only due to the carbon emissions generated, but also because it accelerates deforestation and desertification due to soil erosion.
To improve electrification rates in rural areas, MINEA has announced plans to install 30,000 solar systems by the end of 2022, with the capacity to generate up to 600 MW of electricity. The off-grid solar systems are backed by a one-million-dollar loan secured by the Angolan Government in 2018 from the African Development Bank’s Sustainable Energy Fund for Africa, meant to finance Angola’s broader renewable energy program and energy transition. Decentralized power systems, for their part, have been gaining ground due to their lower costs of implementation, sustainable local value creation and reduced carbon footprint. Specifically, investment in commercial and industrial solar has skyrocketed due to rising utility costs and the increasing penetration of both solar and financial technologies, leading to the commercial market for off-grid solar power in Africa being estimated at $24 billion per year.
Given rising energy demand and low electrification rates at present, grid-connected, off-grid and hybrid systems – those that utilize solar power during the day and natural gas or diesel fuel by night –represent key investment opportunities within Angola’s power sector. According to the Angolan Association of Renewable Energies’ Renewable Energy in Angola report published in July 2022, the Solar Home Systems (SHS) market in Angola is still in its infancy, with sales in the range of 3,000 systems recorded to date. As a result, the country’s potential for solar market growth is prolific, ranging from SHS to Pay-as-You-Go schemes.
This article is from the publication Energy Invest: Angola, which will be distributed at the upcoming Angola Oil & Gas (AOG) 2022 Conference & Exhibition, taking place on November 29 – December 1 in Luanda.
