Cabo Verde - renewable energy projects

Cabo Verde Bets on Renewables to End Fossil Fuel Dependence

Cabo Verde imports roughly 80% of its energy as fossil fuels, resulting in some of Africa's highest electricity tariffs. Now the Atlantic archipelago has set an ambitious course to reverse this dependency: 50% renewable energy by 2030 and complete decarbonisation by 2040. Meeting these targets will require over 150 megawatts of new solar capacity and more than 60 megawatts of wind farms, creating substantial opportunities for foreign investors through independent power producer models and public-private partnerships.

Solar projects capitalise on abundant radiation

The islands possess strong solar potential, with average daily energy ratios between 6 and 8 watt-hours per square metre. The government is promoting utility-scale solar farms, building on existing facilities such as the 5-megawatt Praia Solar Farm and installations on Sal Island. These large-scale projects form the backbone of the renewable transition strategy.

Distributed generation presents a parallel opportunity. Industries, hotels and households increasingly adopt micro-generation for self-consumption. To accelerate uptake, the government offers a 50% interest rate reduction on commercial bank loans for renewable system purchases, lowering the financing barrier for smaller installations.

International cooperation is expanding the sector's reach. Under the Forum on China-Africa Cooperation, China has launched the "Africa Solar Belt" programme to provide photovoltaic solutions for households without electricity access. China has also established a Special Fund for China-Africa Green Industrial Chain to support clean energy cooperation, positioning Chinese technology suppliers to capture market share in Cabo Verde's solar build-out.

Trade winds: nature's constant power source

Trade winds are steady, predictable air currents that blow consistently from the same direction throughout the year—in Cabo Verde's case, from the northeast. 

Unlike variable weather patterns that cause wind to start and stop unpredictably, trade winds maintain relatively constant speeds and direction across seasons. This consistency is invaluable for renewable energy generation. Wind turbines require steady airflow to operate efficiently and generate reliable power output. Intermittent gusts followed by calm periods create grid instability and reduce turbine lifespan through mechanical stress. Trade winds eliminate much of this variability, providing a dependable energy stream that can be forecast accurately. For island nations like Cabo Verde lacking fossil fuel reserves, trade winds represent a freely available, pollution-free power source that blows day and night, complementing solar generation that ceases after sunset. This natural advantage positions Cabo Verde competitively for wind energy development.

Trade winds drive onshore and offshore potential

Located in the path of northeasterly trade winds, Cabo Verde benefits from average wind speeds between 8.3 and 9.9 metres per second. The Cabeólica project, a major public-private partnership, already supplies approximately 20% of the country's electricity as of 2016. However, substantial expansion is required to meet 2030 targets, with planned additions exceeding 60 megawatts.

Offshore wind presents a longer-term frontier. Conventional fixed-bottom turbines face limitations from deep waters surrounding the islands, but floating offshore technology offers future potential, particularly in areas like the channel between Boa Vista and Maio. This emerging technology could unlock wind resources beyond what onshore sites can deliver.

Green hydrogen and ocean energy in early development

Cabo Verde is positioning itself within the green hydrogen economy, with feasibility studies underway for production pilot projects. The combination of abundant renewable electricity and strategic Atlantic location could enable hydrogen exports to Europe and the Americas, though commercial viability remains unproven at this stage.

As an archipelagic nation, Cabo Verde holds theoretical potential for ocean thermal energy conversion and wave energy desalination. These technologies remain in early development globally, but the islands' geography makes them candidates for demonstration projects as the technologies mature.

Storage becomes critical as renewables increase

The integration of intermittent wind and solar generation has historically caused grid instability and energy curtailment. Up to 46% of wind generation on Sal Island was previously wasted when production exceeded demand and storage capacity. Consequently, energy storage has become a critical investment priority to ensure grid reliability and reach the 50% renewable target without sacrificing generation.

Pumped storage flagship project targets 2027 commissioning

The Santiago Pumped Storage plant represents the country's most ambitious storage infrastructure. Located in the Ribeira de São João valley approximately 20 kilometres from Praia, the facility will provide 20 megawatts of capacity and 150.8 megawatt-hours of storage. Due to the islands' aridity, the system will utilise seawater or desalinated water pumped between two reservoirs—an unconventional approach necessitated by scarce freshwater resources.

The estimated €55 million project targets commissioning by end-2027. This infrastructure is essential to minimise renewable curtailment and provide spinning reserves to replace thermal generation, enabling higher renewable penetration without compromising grid stability.

Battery systems roll out across multiple islands

To stabilise the grid and manage frequency fluctuations, the government is deploying battery energy storage systems across the archipelago. The first megawatt of lithium batteries became operational on Sal around 2023, demonstrating the technology's viability in the island context.

Future tenders are planned for additional capacity, including 8 megawatts with 8 megawatt-hours storage in São Vicente and 6 megawatts with 6 megawatt-hours in Boa Vista. The government is establishing regulatory frameworks to attract private investment in battery storage systems, recognising that public financing alone cannot deliver the required scale.

Electric vehicles to provide distributed storage

Cabo Verde aims to replace all conventional vehicles with electric vehicles by 2050. This transition opens opportunities beyond transport decarbonisation. Vehicle-to-grid technology would enable parked electric vehicles to serve as distributed energy storage, feeding electricity back to the grid during peak demand periods and charging when renewable generation exceeds consumption.

While vehicle-to-grid systems require sophisticated charging infrastructure and grid management software, they could significantly expand effective storage capacity without dedicated battery facilities, leveraging assets that serve dual transport and energy functions.

Data centres target solar efficiency gains

In the digital sector, NOSi, the Operational Nucleus for the Information Society, signed a memorandum of understanding with Huawei in 2021 to implement solar photovoltaic solutions for data centres. The initiative aims to reduce energy bills by 30% to 40%, addressing the high energy costs associated with digital infrastructure that underpin the government's e-government and digital economy ambitions.

The renewable and storage sectors offer investors entry points across the value chain, from utility-scale generation through grid stabilisation infrastructure to distributed systems and emerging technologies. Success requires navigating a small market with high import costs, but first movers can establish positions before the 2030 target date concentrates competition.