Solar PV Farms
Solar PV Farms
Business Model Description
Construct utility-scale solar photovoltaics (PV) plants connected to the grid and subject to Energy Supply and Purchase Agreement with Central Electricity Board (CEB) determining tariff and metering procedures.
Expected Impact
Mainstream clean energy use and scale up the share of renewable resources in national mix, reducing Mauritius' carbon footprint brought about by imported fossil fuels.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Mauritius: Flacq
- Mauritius: Plaines Wilhems
- Mauritius: Rivière Noire
- Mauritius: Pamplemousses
- Mauritius: Rodrigues
Sector Classification
Renewable Resources and Alternative Energy
Development need
Mauritius is heavily dependent on fossil fuels. In 2020, 76.1% of energy was generated mainly from fuel oil and coal. Only 23.9% of energy was generated from renewable resources. The government of Mauritius spent around MUR 24,090 million (USD 635.5 million) for fossil fuels import, which stands for 14.5% of Mauritius's total import value in 2020 (1).
Policy priority
The Long-Term Energy Strategy for 2009-2025 plans to increase the use of renewable energy sources for electricity generation to 60% by 2030 and reaching 35% self-sufficiency through renewables by 2025 (3, 4). Coal phase-out by 2030, diversification of energy base and GHG reduction are also among the government’s Nationally Determined Contributions (5).
Gender inequalities and marginalization issues
Although 83.3% of legal frameworks promote and enforce gender equality in Mauritius, only 5% of the workforce of the energy sector is women (6, 7). Tackling gender pay gaps in the energy sector and devising policies for women’s equitable access to renewable energy sources for their homes and businesses must be addressed (8).
Investment opportunities introduction
Local energy demand amounts to MUR 20 billion (USD 450 million), supplied mostly through imported fossil fuel. The Central Electricity Board (CEB) plans to invest MUR 5.3 billion (USD 128 million) in the next three years to multiple renewable energy projects and in battery storage system for stabilization (9).
Key bottlenecks introduction
Return from renewable energy projects is highly dependent on offtake agreement and pricing by Central Electricity Board (CEB). The country needs to ensure a stable network through smart grid development to address intermittence issue. Allocation of Mauritius’s scarce land for renewable energy development might become incompatible with other land use options (21).
Alternative Energy
Development need
In 2020, electricity generation accounted for 43% of the total GHG emissions in Mauritius. Mauritius' reliance on imported fossil fuels heightens the need for extensive renewable energy generation. Investments in solar, biomass and wind require private funding for the country’s transition to a green economy as well as electric vehicle and electric bus integration (2, 3, 21).
Policy priority
Mauritius targets to reach 35% self-sufficiency regarding electricity transfer and 10% efficiency in the electricity sector by 2025 in its Long Term Energy Strategy (4). In the 2021-22 budget speech, the government announced their objective of at least a 5% reduction in electricity consumption of all public institutions, and commissioned the set up of six more solar PV farms (9).
Gender inequalities and marginalization issues
External shocks that threaten energy security vulnerate marginalized segments of society more than any others. The affordability of energy is essential for reducing social inequalities in the community. Women's workforce cannot be discarded in the energy sector to accomplish the government's renewable energy production goals.
Investment opportunities introduction
Scalability and profitability incentivize solar PV investments in the short to medium term. Developing additional sources of biomass offers a viable business in the longer term and indispensable for government’s long term energy strategy. The national biomass framework allows sugar planters to benefit from USD 0.08 per kWh of electricity (9, 17).
Key bottlenecks introduction
Land scarcity, lack of national land use policy, the current regulatory framework and structure of electricity tariff, and a lack of smart grid to address intermittence issue are the key bottlenecks of the alternative energy subsector in Mauritius.
Solar Technology and Project Developers
Pipeline Opportunity
Solar PV Farms
Construct utility-scale solar photovoltaics (PV) plants connected to the grid and subject to Energy Supply and Purchase Agreement with Central Electricity Board (CEB) determining tariff and metering procedures.
Business Case
Market Size and Environment
Utility solar PV capacity expected to increase from 80 MW to 300 MW by 2030
In 2020, 5.1% of renewable energy is generated by solar PV and the total installed capacity of solar PV farms reached around 83 MW (1,12).
Installed mounted utility solar PV capacity is above 80 MW in 2021, and might exceed 300 MW by 2030 according to government trajectory (20).
The Budget Speech 2022/23 acknowledges that energy consumption in 2030 will require 1,196 MW installed capacity whereas current capacity stands at 761 MW, of which 165 MW comes from renewable resources. Government trajectory is to generate additional 435 MW from renewable resources by 2030 (45).
Indicative Return
15% - 20%
Investors expect an IRR of 10 to 21% on equity for solar PV utility projects in Mauritius (16).
Investment Timeframe
Medium Term (5–10 years)
The payback period of a solar PV farm investment is expected to take 5-13 years in Mauritius, depending on the offtake agreement and Central Electricity Board (CEB) pricing (17).
Based on a stakeholder consultation with a prominent renewable energy producer active in Mauritius, solar PV investments will generate returns in 7-10 years (19).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Market - Highly Regulated
Capital - CapEx Intensive
Land Scarcity
Impact Case
Sustainable Development Need
Mauritius heavily relies on fossil fuels for electricity generation, principally petroleum and coal (76.1%) which are imported (37). The share of solar generated energy should be increased to reduce the country's carbon footprint for which the energy sector accounted for 62% (38).
Although Mauritius has achieved universal access to electricity, as a Small Island Developing State (SIDS) it remains vulnerable to oil price shocks and supply availability (38).
Mauritius needs to move away from fossil fuels to reduce the risk of external shocks for energy security and stabilizing costs for industry competitiveness.
Gender & Marginalisation
Women represent barely 5% of the energy sector workforce in Mauritius (6). Encouraging women's participation in sectoral workforce and connected technical and engineering fields should elevate government's target of 60% electricity generation from renewable resources by 2030 (3, 8, 31).
The marginalized segment of the population is extremely vulnerable to external shocks and fluctuations in electricity prices that reinforces social disparities in the society (36).
Expected Development Outcome
Solar energy production will increase Mauritius's total renewable energy resources, help the government to reach 60% of renewable generation in total electricity production, 30% of reduction in greenhouse gas emission, and 13.7% of solar energy contribution to the electricity mix by 2030 (3, 20).
Reduced reliance on energy exports increases energy security and resilience to external shocks, both of which are critical for economic growth (36).
Gender & Marginalisation
Investments in solar energy create employment and skill building opportunities for women to participate in low-carbon economy, as solar PV installation, operation, and maintenance training programs were arranged for women during the Phase 1 of the UNDP supported Green Climate Fund project (7).
Increased energy security will benefit marginalized segments of the population by stabilizing electricity prices that enhancing energy affordability reduces social inequalities.
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
In 2020, solar PV farms contributed 5.1 % of the total renewable energy production of the country (12).
The government targets to increase solar energy contribution to the electricity mix from 5.1% to 13.7% by 2030 (12, 20).
13.2.2 Total greenhouse gas emissions per year
Net CO2 emission in Mauritius was 3.309 tons and 3.37 tons per capita in 2019 (21).
The government aims to reduce the greenhouse gas emission of the country by 30% in 2030 (20).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Tall vegetations block the sunlight from reaching the panels. Cutting tall vegetation to set up solar PV farms may cause deforestation (22).
Solar PV farms are large facilities and occupy large areas of land that they might cause habitat loss (23).
Solar PV panels contain hazardous materials (24). When the panels reach the end of their lives, recycling them is an environmental concern.
Due to gender norms, women's access to land titles is limited and renewable energy investments occupying large-scale land areas may disadvantage women (34).
Historically, male employees outnumbered female employees in the energy sector; newly created job opportunities should not only favor the male workforce and cause further exclusion of women from the sector.
Impact Risks
Solar PV plants' occupation of large areas in land scarce island may limit the positive impact when installed on land with potential agricultural or other economic use.
A rise in the global price of materials and equipment that are used in the production and deployment of renewable technologies may disrupt delivery or affordability of utility-scale solar projects.
Impact Classification
What
Solar PV farms decrease Mauritius's reliance on fossil fuels, scaling up the share of renewable resources in the national mix, and address the country's carbon footprint.
Who
Electricity consumers, employees, researchers, technology designers, technicians, and panel manufacturers in the solar energy sector benefit from solar PV farms.
Risk
Land occupation in Mauritius' scarce land context and affordability require consideration may undermine the impact of solar PV farms.
Contribution
Besides solar PV farms, only roof mounted solar PV installations and biomass energy production have the potential to mainstream clean energy at scale.
How Much
Solar PV farms increase solar energy contribution to the electricity mix from 5.1% to 13.7%, enabling Mauritius' 60% renewable energy target by 2030 (1, 3, 20).
Impact Thesis
Mainstream clean energy use and scale up the share of renewable resources in national mix, reducing Mauritius' carbon footprint brought about by imported fossil fuels.
Enabling Environment
Policy Environment
Renewable Energy Roadmap 2030, 2019: Released by the Mauritius government to increase energy generation from renewable resources and to transition the energy sector to a greener and cleaner sector (20).
Long-Term Energy Strategy for 2009-2025, 2008: Contains Mauritius government's action plan with timelines to diversify the country's energy supply (4).
Renewable Energy Strategic Plan (RESP) 2018-2023, 2018: Released by the Mauritius Renewable Energy Agency (MARENA), it states eight different strategic goals of the agency to enhance the renewable energy sector (39).
The Government Programme 2020-2024, 2020: Includes the Mauritius government's targets to carry the country forward and how to become a sustainable and green society (40).
Financial Environment
Financial incentives: Industrial users may generate up to 150% of their energy usage, from both on-site and off-site PV installations, and benefit from feed-in-tariff (FIT) of MUR 4.20/kWh (USD 0.094) and Carbon Neutral Loan Scheme by Industrial Finance Corporation of Mauritius (IFCM) (45).
Fiscal incentives: Solar PV investments are VAT exempt. Business and households that invest in solar equipment are eligible for tax deductions. Utility-scale energy projects are land conversion tax exempt (25).
Other incentives: Green Climate Fund (CFD) granted USD 28.2 million to UNDP supported projects that strengthen the ability of the energy grid for the use of electricity generated by intermittent renewables (32).
Regulatory Environment
Environment Protection Act (EPA), 2002: Provides the national framework for environmental protection and sustainable development (44).
Renewable Energy Agency Act, 2015: Establishes the Mauritius Renewable Energy Agency (MARENA) (41).
Energy Efficiency Act, 2011: Establishes the Energy Efficiency Management Office, which promotes national energy efficiency awareness and carbon emissions reduction. The office also examines the necessary legislations for energy efficiency and the conditions for undertaking energy audits (42).
Utility Regulatory Authority Act, 2004: Establishes an independent body of Utility Regulatory Authority (URA) set up by the Government of Mauritius to regulate the utility services (43).
Marketplace Participants
Private Sector
Medine Group, AKUO Energy, Tauber-Solar Group, SARAKO PVP Co. Ltd., Voltas Yellow Ltd., Aera Group, Alteo Group, Qair, Solar Field Ltd., Synnove-L'Esperance, CEB Green, China Sunergy Co., Tianwei New Energy Holdings Co., Trina Solar.
Government
Ministry of Energy and Public Utilities (MEPU), Central Electricity Board (CEB), Mauritius Renewable Energy Agency (MARENA), Energy Efficiency Management Office (EEMO), Utility Regulatory Authority (URA), Ministry of Environment and Sustainable Development.
Multilaterals
Green Climate Fund, Abu Dhabi Fund for Development (ADFD), United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP), European Union, International Renewable Energy Agency (IRENA).
Non-Profit
Government of India, Agence Française de Développement (AFD).
Target Locations
Mauritius: Flacq
Mauritius: Plaines Wilhems
Mauritius: Rivière Noire
Mauritius: Pamplemousses
Mauritius: Rodrigues
References
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