Record low prices for utility-scale solar power were announced by Senegal’s Commission de Régulation du Secteur de l’Electricité (CRSE) on 5 April for a tender to build two 60MW solar PV plants at Kahone and Touba. The tender was launched under the mandate of the International Finance Corporation (IFC)-backed Scaling Solar initiative.
Giant French utility Engie and asset manager Meridiam bid €c3.8016/kWh for the plant in Kahone and €c3.9831/kWh for Touba. The tariffs will increase at a rate of 1.2%/yr, resulting in a likely reduction in cost over the life of the project of 40%.
The bid beats by some margin previous lows achieved by Scaling Solar in Zambia, which caused a stir in 2016 when prices of $c6.015/kWh and $c7.84/kWh were announced for two projects of around 50MW. The result caused a re-evaluation of solar procurement policy and tariffs by several governments in Africa, notably Nigeria.
It remains to be seen whether the latest announcement will have a similar impact. But the contrast with feed-in tariffs and bilateral systems such as Kenya, where four 40MW solar PV projects signed power purchase agreements with Kenya Power at 12c/kWh and attempts to bring down the tariff have been hampered by the absence of effective competitive benchmarking, emphasise the importance of how power is procured.
In a press release the IFC said, “After the record-low results of Scaling Solar’s first mandate in Zambia, this is another major breakthrough for the programme as these prices are approximately 60% lower than the solar contracts previously agreed in Senegal. This demonstrates that Scaling Solar’s innovative approach to bring investors and governments together in a transparent, streamlined, and competitive process leads to successful deals that will provide clean, affordable energy for Africa.”
Six bids were received for both projects. For Kahone the other bidders were Nareva Holding and Masdar (€c3.8899/kWh); Access Infra Africa and Total Eren S.A. (€c4.39/kWh); Actis Energy 4 and Mulilo Group Holdings Ltd (€c4.5036/kWh); Scatec Solar (€c4.5999/kWh); and Acciona Energia SA (€c5.793/kWh). For Touba the unsuccessful bidders were Nareva and Masdar (€c3.9899/kWh); Access Infra Africa and Total Eren S.A. (€4.39/kWh); Scatec Solar (€c4.6299/kWh); Actis Energy 4 and Mulilo (€c4.8888/kWh); and Al Nowais Investments LLC, Aldwych Power Holdings Ltd, and Alten 2010 Energías Renovables S.A.