Adding only 90 MW of installed capacity in 2013, Africa and the Middle East didn't build much on the 1,165 MW of cumulative wind power capacity that the region had at the end of 2013; nonetheless, the future for wind power seems much more hopeful. Although there is overwhelming solar capacity in the region, wind power is a renewable energy source that is seeing considerable interest.
Representing 117 MW of wind-generated power, the Tafilah Wind Project in Jordan is the nation's first commercial-scale wind power facility. Vestas Wind Systems (NASDAQOTH:VWDRY) is supplying the project with 38 of its V112-3.0 MW wind turbines in addition to a 10-year service contract.
Delivery of the turbines is expected to occur in the coming months, while Vestas expects the facility to be fully operational by August 2015. Addressing the importance of the project and how it may be a harbinger of future projects in the country, Samer Judeh, chairman of the Jordan Wind Project Company, who is in part responsible for developing the facility, said, "Renewable energy sources are now among the priorities on the Jordanian government's agenda, both for the expected economic as well as environmental benefits."
According to some estimates, Jordan imports 97% of its enegy. In an attempt to become more self-reliant, the Jordanian government has set aggressive targets to develop renewable energy resources throughout the decade. Looking to obtain 600 MW of its energy from wind power by 2015, the government, by 2020, is looking to double that amount, resulting in 1.2 GW of installed wind capacity. Solar, on the other hand, in the same amount of time hopes to add only 600 MW of solar capacity.
Major players in the region
Clean energy investment firm, Masdar, is helping to develop the Tafila Wind Project and similar ones like it in the Middle East. It aims to invest approximately $1 billion in renewable energy projects worldwide. Specifically, Masdar is interested in developing wind projects in the United Arab Emirates. Wind turbine manufacturer, Siemens AG (NASDAQOTH:SIEGY), is also a believer that the UAE represents an opportunity for wind project development.
In The National, Emad Ghaly, the regional head of wind power at Siemens said, "The UAE has significant potential for wind sites with speeds between 5.5 and 7 meters per second, which can be quite easily captured using technology available today." For example, Siemens claims its SWT-2.3-108 turbine is "perfectly optimized for sites with low wind speeds."
Siemens' interest in northern Africa is limited to potential projects in the Middle East. In Morocco, Siemens will supply the 300 MW Tarfaya wind farm with 131 of its 2.3 101 turbines. The facility, when fully operational in October, will be the largest wind project in all of Africa.
A lake breeze
In Kenya, the U.S. Overseas Private Investment Corporation, or OPIC, has committed to provide $250 million in support of development for a 310 MW wind power project. Located at Lake Turkana in northern Kenya, the wind farm will cover about 40,000 acres and provide power to 2.5 million homes. This project is an example or President Obama's Power Africa initiative -- an attempt to double access to power in sub-Saharan Africa. In addition to the government's commitment of $7 billion in support of the initiative, private investors have initially agreed on $9 billion worth of investment. Aldwych International is one of the private investment firms that has demonstrated interest in realizing the initiative and that will be a major factor in making the Lake Turkana project come to fruition. It has committed $1.1 billion in an effort to develop 400 MW of wind power in Kenya and Tanzania.
The Foolish takeaway
More often than not, it's Europe that steals the wind industry headlines; however, that may be changing as Africa increasingly moves toward a wind-powered future. Since their operations are not dependent on the use of water, wind power projects are particularly appealing to African and Middle Eastern Nations for whom water is scarce. Siemens and Vestas are two turbine manufacturers that have already gained a foothold in these markets, and, undoubtedly, they will continue to do so in the future.
Scott Levine has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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