Page - 22 - in options, Volume winter 2016/2017

africa 22 options + winter 2016/2017 www.iiasa.ac.at regional focus Impacts of behavioral factors on the economic feasibility of  solar power projects Solar power in North Africa could provide a valuable source of renewable energy but investors’ risk perception can lead to higher costs of developing such projects. Deployment of concentrated solar power (CSP) facilities is expensive, requiring extensive initial investment. Investors’ subjective judgments about the severity and probability of risk and how much they are willing to accept can translate to a higher cost. To investigate the relationship between investor risk perception and increased costs, IIASA researchers Nadejda Komendantova and Thomas Schinko studied how different risk categories influenced the overall cost of capital for CSP in Algeria, Egypt, Morocco, and Tunisia. The team then analyzed how a de‑risking approach—removing the costs of potential risks—would impact the cost of electricity from CSP in the North African region, using a levelized cost of electricity (LCOE) model. The researchers found that if the risks of investing in CSP in this region were on a par with other energy investments, the mean LCOE would be 39% lower. However, this reduction would still not be sufficient for CSP to be financially competitive with highly subsidized conventional electricity from fossil fuels in North Africa. “Our results suggest that de‑risking is an important strategy to foster deployment of CSP in North Africa but additional measures to support renewable energy sources, such as reconsidering fossil fuel subsidies, will be needed,” Komendantova says. JP Further info Schinko  T, Komendantova  N (2016). De‑risking investment into concentrated solar power in North Africa: Impacts on the costs of electricity generation. Renewable Energy 92:262–272 [pure.iiasa.ac.at/11978]. Nadejda Komendantova komendan@iiasa.ac.at Thomas Schinko schinko@iiasa.ac.at How will climate change affect water resources? With a warming climate, some countries have seen more drought, others more extreme rainfall, and a few have seen a combination of both. Understanding this interplay between climate change and the water cycle will be crucial for managing groundwater resources in the decades to come, especially in Africa, which is vulnerable to water shortages. Consequently, IIASA scientists have investigated how climate change’s effects have impacted the potential groundwater recharge (PGR) patterns across Africa from 1960 to 2010. The researchers simulated the water balance and examined the correlations between PGR and climate indicators including the temperature, storm occurrences, and drought in six different climatic regions of Africa. The study found that a decline of PGR is highly correlated with an increase in temperature in the areas of Africa that are in the Northern Hemisphere, especially in Northern Equatorial Africa. In addition, higher rainfall rates did not always yield more PGR because of greater evapotranspiration—loss of water from plants and the Earth’s surface as the climate warms. “We found that climate variability has strong impacts on groundwater recharge in Africa,” says IIASA researcher Yoshihide Wada. Future water demands are expected to increase dramatically in Africa by 2050 and increasing the pumping rate might deplete the local groundwater resources in some regions. “It is therefore important to understand the future potential change in groundwater recharge under climate change,” Wada says. JP Further info Nasta  P, Gates  JB, Wada  Y (2016). Impact of climate indicators on continental‑scale potential groundwater recharge in Africa. Hydrological Processes 30(19):3420–3433 [pure.iiasa.ac.at/13218]. Yoshihide Wada wada@iiasa.ac.at