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Opinion | China’s solar energy expertise can really shine in energy-poor Africa

Opinion | China’s solar energy expertise can really shine in energy-poor Africa
Opinion | China’s solar energy expertise can really shine in energy-poor Africa

This is because solar energy benefits from a powerful positive feedback loop. As solar panels become more widely available, economies of scale kick in, driving down manufacturing costs. These lower prices make solar energy more accessible and attractive, driving demand. Increased demand leads to more investment and innovation, making solar technology even more efficient and affordable. This self-reinforcing cycle drives the exponential growth of solar energy.

With solar power accounting for less than 6 percent of global electricity generation last year, the biggest growth is yet to come. Solar power is expected to generate more electricity than gas-fired power plants in 2030 and coal-fired power plants by 2032—and could become our largest source of electricity in a decade.

However, there are two major obstacles to an even faster spread of solar energy: storage and transmission over long distances.

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China launches first ultra-high power transmission project in the Gobi Desert

China launches first ultra-high power transmission project in the Gobi Desert

In China, the growth of Energy storage systems – from power generators to industrial users – has accelerated. Globally, the cost of battery storage has fallen by 99 percent over the past three decades; battery technologies will continue to develop alongside solar in a strengthening ecosystem. There are grandiose plans to ship solar and other forms of renewable energy between countries, for example from Morocco to the UK and from its Southeast Asian neighbors to Singapore. China, which is Long-distance power gridcommissioned the world’s largest solar power plant in Xinjiang last month.

But regulatory frameworks and market-based pricing mechanisms are equally important. For large parts of the West, solar energy is just another option in the energy transition. For many in the energy-poor global South, however, it represents the first access to grid electricity.

In Africa, for example, solar energy can drive industrial development without the devastating environmental costs seen in Europe and the United States. The scalability of solar energy also creates opportunities for decentralized power supply solutions without the need for massive investments in the network infrastructure.

About 43 percent of Africa’s population, or 600 million people, lack access to reliable electricity. This is also the biggest obstacle to doing business, cited by 40 percent of African companies in a survey. Not surprisingly, as the distributed renewable energy (DRE) sector has grown in Africa, mini-grids for renewable energy have also mushroomed. Large factories get their own electricity from “inside the fence”; more than 400 million Africans get their electricity from residential solar panels.

In April, the World Bank and the African Development Bank announced a plan to bring electricity to at least 300 million people in Africa by 2030, mostly through DRE systems. If successful, Africa could become a global leader in the new decentralized energy paradigm, avoiding years of waiting for state-run grids to expand.

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India’s first solar-powered village improves the lives of working families

India’s first solar-powered village improves the lives of working families

This could be a crucial moment for China to transform its role in Africa’s emerging solar energy market. The country could move beyond simply supplying equipment and establish itself as a developer and operator of solar energy projects, leveraging its complementary strengths in photovoltaics, batteries and mobile payments.

The doors to the US market may be closed, but China can still shape developments in one of Africa’s most important growth markets. As margins in the solar supply chain become increasingly narrow, solar energy companies can take their place as a much more profitable and sustainable business. They could even become the cornerstone of Belt and Road Initiative in Africafrom supplying energy to mines to revitalizing industrial parks to create integrated industrial ecosystems.

Solar energy systems not only promise greater economic viability, but also have social impact. And the modular and scalable nature of solar systems allows for flexible deployment, from small off-grid systems to large utility-scale projects. The much shorter implementation times offer a faster return on investment. It also allows for greater private sector participation and reduces dependence on government agencies, streamlining project development and increasing efficiency.

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Ten years after China’s Belt and Road Initiative

Ten years after China’s Belt and Road Initiative

In Africa, solar energy projects are much more likely to require partnerships between Chinese, international and African companies in collaboration with state actors, rather than being led by them. This business-led approach – which emphasises collaboration, innovation and community empowerment – ​​would be a fundamental departure from previous state-led Belt and Road Initiative projects.

To be successful, Chinese companies must develop new skills in dealing with the regulatory environment, stakeholder management, developing innovative business models and managing intercultural partnerships.

By making a decisive shift from infrastructure construction to leading the continent’s green electrification, China can drive Africa’s sustainable industrialization.

This business-driven approach to distributed solar energy has the potential to bring light to millions of people and boost the economy – cementing China’s role as an indispensable partner for Africa. In doing so, China will not only help unlock Africa’s enormous potential, but also chart a new course for inclusive South-South cooperation.

Winston Mok, a private investor, was previously a private equity investor

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