Rome, July 2023 – RES4Africa Foundation, in collaboration with AFRY, just released the new report Accelerating Investment in Renewables Through Energy Aggregators, which proposes the use of electricity aggregators to accelerate investment in the Southern Africa Development Community (SADC), and generate cost-efficient electricity for households and businesses.
Electricity aggregators can act as intermediaries to investors in the market, absorbing potential risks like political, non-payment and negotiation issues. This results in a lower capital investment cost, providing producers with reliable offtake, consumers with low-cost electricity, and networks with multiple revenue sources. Such benefits could ultimately enhance the SADC electricity sector and bolster local economies.
Examples of aggregator business models that are already present in the SADC region include Africa GreenCo, PowerX, Energy Exchange, and Empower Trading. To unlock the full benefits of these and other aggregators’ investments, certain conditions must be met, ranging from progressing the unbundling of state-owned utilities to the introduction of measures that can speed up the project development phases of renewable generation plants, such as the process to obtain a generation licence.
According to the results of RES4Africa’s study, targeted actions should be designed and implemented, in order to enhance SADC’s policy and regulatory framework, making it able to unleash the full potential of aggregators, while making them more attractive to investors and local administrations. Further interventions outlined by the analysis are the establishment of transparent rules and tariffs, introducing direct incentives or refunding investment costs, and inaugurating import tax exemptions. Finally, it is desirable to increase social awareness, by disseminating knowledge through public projects and actively involving the population in their operative phases.