“While existing thermal power plants are essential in the short term, we advocate for new additional capacity in renewables, primarily solar and hydropower. The cost of solar components has significantly decreased over the last 10 to 15 years, making it competitive without subsidies. It’s environmentally friendly and cost-effective, making it a viable alternative to fossil fuels.”
Key Points:
- Development Goals at Lidera Green Power:
– Lidera Green Power, a subsidiary of Groupe Filatex, focuses on developing solar power plants in Madagascar to provide clean energy to the grid at a lower cost compared to thermal power plants.
– By reducing dependence on heavy fuel oil and transitioning to renewable energy, the company aims to cut costs for the national utility, JIRAMA, and contribute to a greener environment by reducing carbon emissions.
- Impact on Madagascar’s Development:
– T.J. Tall emphasizes the need for a sustainable national utility in Madagascar, advocating for a transition to renewable energy sources like solar and hydropower to bolster the existing thermal infrastructure.
– The goal is to maintain short-term stability while gradually increasing new renewable capacity to significantly impact power production in Madagascar over the next five to seven years.
- Acceptance of Renewable Energy:
– In Madagascar, low electricity access rates make any new capacity, especially from renewable sources, highly welcomed. The decreasing cost of solar components over the years has made solar power competitive, environmentally friendly, and a viable alternative to fossil fuels.
- Future Objectives and Expansion
– Lidera Green Power’s short to medium-term focus is on increasing solar and hydro capacity in Madagascar to reach a total of 150 megawatts from renewable sources within the next five years.
– Overcoming challenges related to securing power purchase agreements with the national utility, the company aims to significantly improve access to electricity and power reliability in Madagascar. Beyond five years, they plan to expand into other African countries, aiming to bridge the infrastructure gap and enhance renewable energy projects across the continent.
AfricaLive.net: What are your current development goals and objectives at Lidera Green Power?
T.J. Tall: Thank you for the opportunity. We’re always happy to discuss our projects. I work for a Malagasy-owned company, Groupe Filatex. Specifically, I oversee the activities of a subsidiary called Lidera Green Power. Groupe Filatex is the largest independent energy producer in Madagascar. We operate thermal power plants and solar PV plants, and aim to reduce energy costs for the national utility JIRAMA.
Groupe Filatex has three segments, Energy, Real Estate and Ventures (investing in companies that do not operate).
At Lidera Green Power my main focus is to develop solar power plants that can provide clean energy to the grid, at a lower cost compared to thermal power plants.
These efforts have two main benefits. Firstly, in Madagascar, hydrocarbons are imported, specifically heavy fuel oil (HFO). The transportation of HFO by truck to thermal power plants over long distances is costly for the national utility, driving up the overall expense. By utilizing solar power, we aim to reduce the average cost for the national utility in acquiring and distributing power. This is the first significant advantage. Secondly, thermal power plants are environmentally unfriendly, emitting a significant amount of carbon dioxide. Transitioning to renewable energy in Madagascar aids in reducing emissions.
I’ve been in Madagascar for a little over a year and a half. I was actually born in Mali, West Africa, and have worked in various parts of the world. However, working in Madagascar has been a great discovery for me. Contributing to the progress of this Indian Ocean island-nation is a fulfilling endeavour. It’s worth mentioning that the rate of energy access in Madagascar is between 15 and 20%, making it one of the lowest in the world. Any additional access to power is highly welcome, and if this additional capacity comes from renewable sources, it’s even better.
AfricaLive.net: I was just about to ask for more context on the importance of renewable investments in Madagascar in your context. Obviously, Madagascar is internationally known for its nature and forests, which are crucial from both a natural and economic standpoint.
Without reliable power, businesses and communities struggle to achieve social and economic growth. Looking at this broader context, what impact do you believe you can have on the nation and its development?
T.J. Tall: In most African countries, to make a significant difference, action needs to be taken through the national utility, given their near-monopoly status in power distribution. We’re working in Madagascar to make the national utility more sustainable. Relying solely on hydrocarbons and similar sources is not viable from both a cost and environmental standpoint. Our goal is to advocate for new additional capacity in renewables, primarily solar and hydropower. It’s crucial to maintain the existing thermal infrastructure for short-term stability, but all new capacity should come from renewables.
We’re exploring various fuel sources, like solar. We’re part of an ecosystem and focused on renewable energy projects, including hydropower and wind projects in Madagascar. In the next five to seven years, hydro and solar will play a significant role in power production in Madagascar.
AfricaLive.net: How do you perceive the acceptance of renewable energy in Madagascar and across the African continent?
T.J. Tall: In Madagascar, given the low access to electricity rates, any new capacity is generally welcome. Our focus is on the energy mix. Having an open mind, we emphasize the need for a balance. While existing thermal power plants are essential in the short term, we advocate for new additional capacity in renewables, primarily solar and hydropower. The cost of solar components has significantly decreased over the last 10 to 15 years, making it competitive without subsidies. It’s environmentally friendly and cost-effective, making it a viable alternative to fossil fuels.
AfricaLive.net: So, what are your objectives for the coming years? Are you looking to develop outside the borders of Madagascar?
T.J. Tall: In the short to medium term, our focus is Madagascar. As a group, our current solar power capacity is around 10 megawatts spread across four plants. Our goal is to increase this to over 100 megawatts within the next five years, a more than tenfold increase in solar capacity. We also have medium-sized hydro projects, aiming to add approximately 50 megawatts from hydro. In total, we aim to reach 150 megawatts from renewable sources in the next five years. The renewable sector is very dynamic here, though not without its challenges. One significant obstacle is securing power purchase agreements with the national utility, which has faced financial difficulties recently, making it a risky bet for cautious international lenders. We’re working to find ways to navigate this and ensure substantial increases in access to electricity and power reliability. If we look beyond five years in the future, we will definitely expand to other African countries
AfricaLive.net: You’ve touched on the significant challenge for African infrastructure, addressing the funding and infrastructure gap.
How do you see scaling up the availability of renewable energy projects, considering the challenges in funding and investor confidence?
T.J. Tall: I believe it should be a two-pronged approach. Certain segments like rural electrification and mini grids, as well as corporate entities like mining and cement companies, are less reliant on the national utility. They can sign power purchase agreements independently with power producers, without jeopardizing the financial well-being of the national utility.
These segments have a lot of potential for growth, given the demand and the willingness of companies to pay for reliable power. We are expanding our focus to supply electricity directly to such corporates. In the case of rural electrification, there is significant demand, and we are exploring this area as well. This segment is expected to grow rapidly in African countries over the next five to ten years.
We should learn from what has worked in countries like Côte D’Ivoire, which is doing very well in our sector, or Senegal, which is making improvements. North African countries like Morocco are doing extremely well. We need to bring that expertise and those best practices to countries that may be lagging behind.
I would say, it’s easier said than done. Right now, the practice seems to be to avoid making structural changes, like necessary price increases, to make national utilities more viable. Politically, it’s sensitive to increase power costs while people are already struggling with unreliable power. Balancing the need for reliability and making utilities viable through best practices and improved management is crucial.
