The Next Great Solar Infrastructure Project Could Be In Africa

To Investors, 

Africa is failing to capitalise on one of the greatest opportunities for clean and stable energy - harnessing solar power from the Sahara Desert. 

Last month an exciting renewable energy project called Australia-Asia PowerLink (A-A PowerLink) received clearance from the Singapore government - a stamp of approval that the project is viable and should go ahead.

Renewable energy developer SunCable is working with the governments of Australia, Singapore, and Indonesia on a $24 billion solar energy project to provide 4GW of power from the Northern Territory of Australia to nearby areas such as Darwin, and a further 2GW to Singapore via a 4300 km sub sea cable. 

This project will supply approximately 9% of Singapore’s renewable energy needs when it reaches full capacity. 

As great as this project is, it's certainly not the first large scale solar power project that requires collaboration between governments. 

Bringing it closer to home, I wanted to understand if there are energy projects that leverage solar from the Sahara Desert and why they aren't as loudly applauded.

What I found in my research was very fascinating, here’s a summary…

Ouarzazate Solar Power Station (Morocco):

With a capacity of 500 MW using concentrated solar power, initially envisioned largely as an export project for European economies, this ambitious project in Morocco faced setbacks when it came to supporting plans for an undersea transmission cable. That setback then shifted the project’s focus to Morocco’s domestic energy needs, and this power station now provides clean energy to 1 million+ homes in Morocco.

Benban Solar Park (Egypt) 

The Benban Solar Park is composed of multiple solar power plants with a combined capacity of 1.8 GW. Currently the park is operational and supplies electricity to an estimated 400 000+ homes in Egypt. 

TuNur Project (Tunisia):

Another concentrated solar power project, this time with a capacity of 4.5GW of energy. The TuNur project was also created to export energy to European markets. Currently the project faces delays in exporting energy due to the fact that building long-distance high voltage direct current (HVDC) undersea transmission cables is extremely expensive and technically complex. 

Sahara Solar Breeder Project (Algeria/Japan):

The vision of the Solar Breeder Project was to use the sand in the Sahara to produce silicon for solar panels, establishing a breeding system to expand solar plants. The premise is that one section of the final plant size would be built and the solar energy harnessed from that would be used to create a manufacturing plant where more solar panels are built using sand from the Sahara; those new panels would go towards expanding the size of the solar plant, and so on. 

Reportedly the creators of this project had a vision to supply 50% of the world’s electricity by 2050 by running energy through superconducting cables. This project has stalled due to the capital intensity required. 

Desertec Industrial Initiative:

The concept of the Desertec project was to again generate and supply energy from the Sahara to European markets. The Desertec project was eventually scrapped because of political instability, a lack of intergovernmental collaboration, and worries that the project wouldn’t benefit local communities first, before exporting energy.

Can you notice a pattern? 

Massive potential only to be exported to consumers on another continent. Check out these links on TuNur here, and here. And here’s a link to a similar story about the Ouarzazate Solar Power Station and broader African energy projects.

Let’s build more great solar infrastructure projects in Africa, for Africa. 

The “for Africa” part of that last statement is important. I strongly believe that the reason these existing projects appear to be focused on exports to other continents is because of a lack of will to build for Africa. SunCable was able to negotiate terms with authorities in Australia, Singapore, and Indonesia, in the name of innovation and benefiting the citizens of those economies.

If you look at the chart below you’ll see that, compared to the A-A PowerLink project where energy would be transported over 4300 km, Nigeria with unstable electricity supply is only 952 km away from Niger (between capital cities); the DRC is 2228 km away from Chad, and Ethiopia is 1024 km away from Sudan. Each of these countries would have stable and sustainable electricity if they could just align for the good of their economies. 

Of course there are many more complexities that Africa faces that are at play, especially lingering historical political and social imbalances, but where there's a will there's a way. The most alarming note about the Ouarzazate Solar Power Station, the TuNur Project, the Solar Breeder Project, and the Desertec projects was that it seems like they weren’t conceptualised as projects that would benefit the home country of those projects first. 

If African countries really did leverage solar energy from the Sahara for their own benefit then the downstream possibilities for economies involved would be truly amazing. For one, citizens would benefit from stable and clean energy.

But those African economies would also more broadly be in a position to take on energy intensive industrial projects like aluminium smelting (which could breed an auto and auto-parts industry in the country); green hydrogen production; steel manufacturing, fertiliser production, data centres, battery manufacturing, desalination plants, and cement production. 

All of this is easier said than done, but Australia and Singapore are taking on an audacious project, so maybe that could be the starting point - the will and determination that grand scale projects must be executed. 

I hope you enjoyed reading this letter

On my journey to becoming a master capital allocator, one lesson down, a billion more to go 

Hope you have a great day, 

-Mansa