The month of Ramadan has been moving very quickly here. Eighteen days have already passed and it feels like no time at all. For those who do not know, Ramadan is the 9th month of the Islamic calendar and is spent fasting—no food or water until sundown. The lack of water and hydration during the day has led me to reflect on the apparent abundance of sunshine and, especially, heat in Somaliland. It seemed like as good a time as any to talk about some of the advantages of renewable energy in Somaliland. This will be a very brief discussion of the favorable circumstances for wind and solar.
In terms of availability, Somaliland presents an excellent opportunity for investment in renewable energy, with enormous advantages in terms of wind and solar. I’ll talk about wind first.
There is consistent wind across the country year round. On the coasts, wind speeds exceed 7 – 9 meters per second. 50% of the country has wind speeds that exceed 6 meters per second, which could be able to generate electricity on a large scale. And larger areas have wind speeds of more than 5 meters per second, which is suitable for water pumping and rural electricity generation.
The Somaliland government recently launched a wind energy pilot project at two sites. They installed five 20-kilowatt wind turbines at Egal Airport in Hargeisa, and three more turbines will soon be completed just outside of the coastal city of Berbera. Additionally, the government has installed four wind data monitoring stations in Hargeisa, Borama, Berbera, and Burao, which can be monitored online.
The major challenge for the wind model is that the upfront costs are much higher than those for diesel generation—some estimates show that 75% of the total cost is the upfront investment. Despite their maintenance costs being much lower than diesel generators, many local electricity providers have avoided these kinds of investments. However, since electricity prices are already at $1 per kilowatt-hour, and susceptible to the volatility of oil prices, these investments should be seen as a way to secure their long-term profitability, while avoiding unexpected future costs related to rising oil prices.
The government has developed a financial model for comparing the diesel and wind investments over time, which is available from the Somaliland Investment website.
Without going too deep into analysis of the model, wind energy’s upfront cost is much higher than diesel generators, but the absence of fuel costs mean that the investment is recovered after three years, and opens the door to cheaper electricity while still maintaining profitability.
With that, let’s talk briefly about solar.
Somaliland receives 3,000 hours of sunshine every year. According to NASA’s data on surface meteorology and solar energy, Somaliland is an excellent resource for large-scale solar deployment. The below chart illustrates the amount of solar radiation shown as kWh/m2/day, which has been averaged over a twenty-two year time-frame.
I’m sorry, but can we just take a second here to pause, relax, and bask in the fact that I was able to use NASA as a resource for this blog post?
Okay, back to business.
Averaged over the entire country, this translates to roughly 5.8 to 6.0 kilowatt-hours per squared meter per day (kWh/m2/day), which is shown graphically in the map below.
Many areas around the world have successfully introduced mainstream solar through programs like Net Energy Metering, where homeowners install solar on their roofs and offset their electric bills by putting as much energy onto the grid than they are using, even though they have become somewhat controversial recently. However, Somaliland’s electrical grid is not capable of supporting the additional load and monitoring that would be required for such a program - at least for the time being. Therefore, there are two options available in the near-term: on-grid solar and off-grid solar.
On-grid solar would mean that the utilities would install solar panels for large-scale electricity generation to be distributed on an existing electric grid. These projects require large initial investments, which Somaliland utilities have been unable or unwilling to make. Off-grid solar would mean a that a homeowner installs solar panels capable of providing all of the needed electricity for their home, and does not require an electric utility to provide electricity. This would mean that they would withdraw from the electrical grid entirely. There are gray areas in both of these scenarios and they generally depend on a number of different variables in any given home, city, or country.
The largest barriers to investments and adoption of wind and solar technologies in Somaliland are lack of finance, lack of electric regulation for utilities, and lack of technological expertise. That is why Qorax Energy is working with ATU to develop this local expertise and ensure that investments in renewable energy are lasting and impactful. Too often, major renewable energy investments in Africa fall short because they do not adequately build local capacity to ensure long-term sustainability of the investments. By working with local institutions to build local capacity, Qorax Energy is changing the formula for renewable investment in Africa. If you want to learn more, you can read about Qorax Energy and EnerSom, their first energy portfolio company, in their latest blog post.
You may have noticed that I did not discuss the finance or regulatory barriers that I mentioned above. That is a story that will have to wait for another day.
More details and additional information regarding solar and wind energy in Somaliland can be found in the Somaliland Investment Guide.