Botswana’s outdated power sector relies on coal for 60% of its generation, while approximately one-third of the population lacks access to electricity of any kind. The country’s 600MW peak demand is met through importing electricity from surrounding countries when available (roughly 200-300MW per day from South Africa) and running expensive back-up power plants.
The current policy framework provides no specific incentives for clean energy, and the impetus for implementing new policy in the near future is unclear. However, the government is crafting a national energy policy, which outlines new strategies and highlights the need for renewables to be integrated into the power sector. In the meantime, the manufacturing investment incentive and import duty exemption provide limited policy support for renewable energy investment and build-out in Botswana.
In 2015, the government requested the World Bank to provide technical assistance in establishing a renewable energy strategy for Botswana. Through the Africa Renewable Energy Access (AFREA) programme, it will help formulate a renewable energy strategy with a strong emphasis on the development of solar energy alongside an assessment of resource availability and a review of legal, regulatory, policy and institutional frameworks.
Botswana continues to explore the potential for locally produced solar power. It has considered feed-in tariffs but not yet implemented them due to limited technical capacity, the government’s focus on coal expansion and the potential cost. In June 2015, the government announced it would release a tender for two 50MW solar PV plants. Renewable energy currently makes up less than 2% of the country’s generation mix.
The vertically integrated government-owned utility, Botswana Power Corporation, runs the power system, which until 2015 had only the Morupule A 132MW coal-fired power plant. The utility has tried to bring online the 600MW Morupule B coal plant, but technical issues and the lack of project management foresight have delayed the full operation of its four units.
Back-up power plants include the 70MW Matshelagabedi, and the 90MW Orapa peaker plant owned by independent power producer Debswana, which operates at a high environmental cost, as it consumes approximately 17,000 litres of diesel per hour. Meanwhile, Botswana Power Corporation has struggled financially due to the country’s suppressed power prices and the cost of imported diesel. The utility has stated its intention to raise prices to match the cost of production.
In 2012 Japan’s Itochu Corp. financed a 1MW PV plant through a $12.5m grant. The country has completed feasibility studies for a 100MW concentrated solar thermal plant and in July 2015 invited bids to build the plant. In the biofuels sector, a diesel substitute 0.36mLpa plant was commissioned in 2006 while a $1.9m 5mLpa diesel substitute plant is currently under construction. The biofuels sector in Botswana remains stagnant due to policy constraints, while the debate over a biofuels blending mandate continues to hamper the sector’s growth potential.
Score Summary
Botswana scored 0.59 in Climatescope 2015, placing it 47th on the list of countries overall, one place higher than in 2014. The country’s highest score was on Low-Carbon Business & Clean Energy Value Chains Parameter III.
On Enabling Framework Parameter I, the country dropped six places to rank 49th. On the whole, its policy and regulatory environment scored weakly, though it does have some energy access policies in place.
The country finished 35th on Clean Energy Investment and Climate Financing Parameter II. There has been little investment in the sector to date, though financing conditions are more favorable than others in the region.
On Parameter III, Botswana placed 34th, partly reflecting the presence of a number of distributed clean energy service providers.
On Greenhouse Gas Management Activities Parameter IV, the country was ranked 50th. Modest inroads are being made in the area of corporate awareness.