Africa’s energy options are growing, but power supply still a concern: IEA

Energy demand in Africa is growing twice as fast as the global average, and the continent is making large strides in renewable energy and natural gas production, but persistent lack of access to electricity and clean cooking are impeding the continent’s development, the International Energy Agency (IEA) said in a report on Friday.

Growing urban populations are leading to a surge in energy demand for industrial production, cooling and mobility, the IEA said.

However, lack of access to electricity is a major challenge to Africa’s development, the report said.

“Nearly half of Africans did not have access to electricity in 2018, while around 80 percent of sub-Saharan African companies suffered frequent electricity disruptions leading to economic losses,” the agency said in its Africa Energy Outlook 2019.

Another impediment the report examined is the limited access to clean cooking methods. More than 70 percent of the population lacks access to clean cooking and the air pollution caused from traditional uses of biomass is causing 500,000 premature deaths a year, the IEA said.

The momentum behind current policy and investment plans is not yet enough to meet the continent’s energy needs in full, the report said, adding that only a handful of countries including South Africa, Ethiopia, Ghana, and Kenya will be able to achieve full access to electricity by 2030.

Despite policymakers’ failure in supplying power to industries and households, the continent, which is home to some of the world’s fastest-growing countries, has the potential to be a major energy player over the next few decades.

Renewable energy

Rising electricity demand, especially in sub-Saharan Africa, requires a major expansion of the power system.
Africa requires 700 terawatt-hours (TWh) of power, with the North African economies and South Africa representing over 70 percent of the total, the report said.

While the region has the richest solar resources in the world, it has installed only 5 gigawatts (GW) of solar photovoltaic (PV) systems. According to IEA’s forecast, solar energy will overtake hydropower and natural gas to become the largest power source in Africa in terms of installed capacity.

Solar PV deployment between now and 2040 will average almost 15 GW a year, matching the average annual deployment in the United States over the same period, the report said.

Wind energy is also expected to see further expansion. This will mostly happen in countries that benefit from “high quality” wind resources, such as Ethiopia, Kenya, Senegal and South Africa, according to the IEA.

Natural gas

The development of infrastructure for natural gas will be a major challenge, the IEA added, due to the size of the markets and affordability.

A series of major discoveries in recent years in Mozambique, Tanzania, Egypt, and West Africa could fit well with Africa’s industrial boom and demand for reliable power, the report said.

The agency says that gas could be well suited for roles other than making electricity, but the adoption of the cleaner fossil fuel will depend on the price at which it becomes available.

It will also rely on the development of distribution networks, availability of finances, and policymakers’ commitment to lowering the use of polluting fuels.

IEA expects Africa to become a major natural gas player as a producer, consumer, and exporter. By 2040, the region’s gas output will more than double, said the IEA.

Natural gas’ contribution to Africa’s energy mix will rise to 24 percent in another two decades, the agency said.

“However, the growth in production is considerably higher than the rise in demand, and Africa – led by Mozambique and Egypt – emerges as a major supplier of LNG to global markets,” the report said.

More investment needed

The agency has called for an improvement in power infrastructure across the region.

IEA said a key priority is targeted investment and maintenance to reduce power outages, a major obstacle to enterprises, and to cut losses to a level closer to that of advanced economies.

Achieving reliable electricity would require an almost fourfold increase in investment to about $120 billion a year through 2040, the report said.

While garnering this level of investment is a “significant” undertaking, countries can put in place regulatory measures to improve the efficiency of utilities and boost private investment, the IEA said.

“There are reasons for optimism, both from the dynamism of Africa’s energy sector and from the technologies that offer a cost-effective way to meet rising demand in a sustainable way,” the IEA said.

“Whether and how African countries take advantage of these opportunities will depend in large part on the way that energy policies evolve,” the IEA added.