With global energy focused on carbon emissions in the run up to COP26, the role of Africa in the energy transition is once again under the spotlight.
African policy makers are grappling with big questions about how to move their countries forward, particularly oil and coal producers, many of them under pressure from developed countries to compromise their resource advantage in fossil fuels in favour of a big push to renewable energy.
Africa’s current energy needs are met through a mix of biomass, which accounts for about half of the continent’s primary energy supply, and fossil fuels – oil, gas and coal. Hydropower also contributes to the mix, but the impact of climate change affects its reliability. Serious droughts in countries such as Ghana, Kenya and Zimbabwe have, in the past, brought hydro production to a standstill.
South Africa and North Africa account for about 70% of current electricity demand. The continent is caught in a vicious cycle. Production of power is low, which affects economic growth as well as demand, and because demand is low, investors are reluctant to invest because of potentially low rates of return.
Reliable energy is a luxury in Africa and a survey by Energy for Growth Hub, a global solutions connector, shows that more than 53% of firms in sub-Saharan Africa rely on self-generation as a back up to grid power. In Nigeria, where grid power distribution is at about 5,000MW, the country is driven by generators, which, collectively, provide more than eight times the grid power.
But the situation is not static. More than half a billion people are likely to be added to Africa’s urban population by 2040 and demand in densified areas will grow as supply grows, particularly in decentralised renewable energy.
How Africa meets its growing energy needs is crucial for the continent’s economic and energy future, as well as for global trends, says the International Energy Agency (EIA).
Currently, however, efforts to provide access to modern energy services barely outpace population growth, despite progress in countries such as Kenya, Ethiopia, Ghana, Senegal and Rwanda. This means that by 2030, the estimated number of people without access to reliable energy sources will not be much less than the 600 million of today.
Renewables will play a leading role in meeting this demand, says the EIA. To date, the continent with the richest solar resources in the world has installed only 5 gigawatts (GW) of solar PV, less than 1% of the global total. Many countries do not have renewables-friendly regulation, which doesn’t help
“However, Africa’s vast renewables resources and falling technology costs drive double-digit growth in deployment of utility-scale and distributed solar photovoltaics (PV), and other renewables, across the continent.”
The African Development Bank is at the forefront of efforts to drive an energy transition, investing in helping countries end their coal dependence and driving its new deal on energy for Africa. It has made a clear commitment to ending the reliance on coal, dedicating $500 million to reducing countries’ dependence on it.
As governments align their energy strategies to the Sustainable Development Goals, there is pressure on them to build climate friendly energy systems. Most countries now have targets for the contribution of green energy in the total mix.
One is South Africa. Its Integrated Resource Plan envisages renewable energy contributing up to 42% of new generation by 2030. Despite its reliance on coal to power the national grid, the country has one of the most progressive renewable energy programmes on the continent – the Renewable Energy Independent Power Producer Procurement Programme, which provides a template for other African countries.
Kenya is also well ahead, 70% of its energy already coming from renewable sources in the form of geothermal and hydro power. North African countries are using their huge solar capability to best effect, with Morocco and Egypt being home to the biggest solar parks in the world.
The role of gas in the clean energy debate is still unclear. It was considered to be a bridging fuel source between dirty fossils and renewables, but many critics have become more sceptical as climate targets get tougher.
But is becoming an increasingly important source for Africa, not just for energy but for exports with major gas reserves in many offshore areas, including in South Africa, Mozambique and Tanzania, while Nigeria, the continent’s biggest oil producer, has enormous gas reserves
Decentralised energy, in the form of mini grids and solar home systems, has the potential to make a significant dent in the lives of millions of Africans.
However, the transition in Africa likely to be slower than developed countries would like and that is needed to meet global emissions targets.
Developed countries pledged to mobilise $100bn per year for climate action in developing countries, but the question is whether many hard-hit nations in Africa have built plans or capacity to absorb this money or the political will to make it work.