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Focusing on the status of Africa’s power generation and the opportunities in the continent’s energy sector, The Status of Africa’s Power Generation webinar participants were given valuable insights into current and future realities.

This article first appeared in ESI Africa Issue 2-2020.
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By 2040, the African continent will have around two billion citizens. This sobering glimpse of the future was shared by Andrea Isidori, Advisor at the Danish Energy Agency’s Centre for Global Cooperation, during an ESI Africa webinar. He said: “It is extremely crucial to look at Africa’s growing energy needs, not only for energy access and sustainability but also to ensure the right path to shape the continent’s economic and energy sectors.”

“We can also foresee,” Isidori stated, “looking at data and current plans from African governments, that despite progress in many countries in sub-Saharan Africa (SSA) and Africa in general, particularly in Kenya, Ethiopia, Ghana, Senegal and Rwanda, the current efforts to try to provide access to modern energy will barely outpace the population growth. So, unfortunately, it is still estimated that by 2030, approximately 530 million people will still lack access to electricity and almost one billion people will lack access to clean cooking.”

Electricity demand in Africa today totals almost 700TWh with North African economies and South Africa accounting for more than 70% of this total number. It is foreseen that the fastest and the largest growth will take place in SSA and it is expected that electricity demand will more than double by 2040, reaching the value of 1,600TWh.

How will Africa meet its growing energy needs and demands?

Andrea shared some key results and insights from the Africa Energy Outlook report that was published by the IEA in 2019. The study looks into potential and possible energy pathways on the African continent up to 2040. The analysis was based on two scenarios. The first is the “2040 Stated Policies Scenario”, which reflects today’s policy frameworks, plans, infrastructure and financial circumstance of the African continent.

The second scenario is the “2040 Africa Case” and deals with the framework of the Agenda 2063 that was adopted by the heads of state and governments of the African Union. According to Isidori, renewables might play a leading role in meeting the growing energy demand of the African continent. However, even with the richest solar resources in the entire world “only 5GW of solar energy has been installed on the entire continent. It is roughly less than 1% of the total capacity installed worldwide. It is expected that with these two scenarios, solar PV deployment could reach almost 15GW per year and reach a total installed number of 320GW by 2040, overtaking both hydropower and natural gas.”

Wind energy is expected to grow very rapidly in several countries, specifically in Ethiopia, South Africa, Kenya and Senegal; and Kenya is expected to continue to play a leading role in the development of geothermal deployment.

Hendrik Malan, Partner & CEO Africa at Frost & Sullivan Africa, provided a slightly broader view of the energy scenario, taking into account not just energy for electricity generation purposes, but also for other purposes such as transportation and heating.

Said Malan: “I do believe that in the broader sub-Saharan Africa, that has got a role to play in the overall narrative and policy structure and infrastructure that we need to put in place as well, if we are going to come even close to some of the sustainable development goals as mentioned by Andrea.” “Taking into account the baseline metrics for driving energy consumption across any region, basic elements such as GDP, population, urbanisation and so on, and also looking at electrification and policy frameworks, Africa’s electrification is still very, very low. Compared to the rest of the world, which I think on average is about 89% at the moment, Africa lags behind quite considerably.”

Lagos x 22! Will infrastructure and T&D hold up?

According to the Frost & Sullivan expert, the rapid rate of urbanisation on the continent can be compared to a city the size of Lagos being established in Africa every single year for the next 22 years. “For those of us who have travelled over Lagos on a clear day, that is a really, really big city that we are going to add to the African or sub-Saharan African infrastructure.”

“Our sustainable development goals and United Nations human development goals are very far off the mark at the moment. We are currently hovering, just from rudimentary calculations, at 10GJ per head and you have considerable increases in the quality of human life after about a 100GJ, which is typically what the UN is trying to aim for.”

“We are presented with this really big challenge in Africa” stated Malan, “where on the one side we need a significant increase in energy to cope with all these socio-economic factors expanding and increasing, and we need to balance that with controlling carbon emissions on the other, in order to be in line with the broader environmental objectives of Africa and the rest of the world.”

Biomass still dominates the energy mix across Africa and according to Hendrik will continue to play a substantial role in the years to come and most likely for the next 40 years. “Let’s be clear what we mean by biomass: typically it means wood being burnt in houses, especially in rural areas, for cooking and heating.”

Over the forecast period, bio energy, coal and oil consumption all rise by about 100 Mtoe over the next 22 years. Renewable energy also grows considerably over the forecast period. “In the overall mix of things,” he explained, “in this scenario by JRC [EU’s Joint Research Centre], natural gas typically does not necessarily increase that much. This is purely because we feel there are a number of policies that need to be put in place in order to capitalise on natural gas as an energy source in Africa to be able to take advantage of all the natural resources that we have available to us.”

The projected growth is, however, not sufficient to address the legacy infrastructure shortages, Malan warns. “There is a tremendous infrastructure shortage in Africa, not just from a generation perspective, but very importantly, also from a transmission and distribution perspective. The challenge with Africa generally is that generation is only a relatively small part of the problem. To get the power from one side of the country to the other, typically many grids are not connected and the quality is not particularly good. So, it’s always a balancing act, between making sure the generation investment is good but also that the transmission and distribution are good.”

Given the lack of grid-scale storage solutions available, a relatively strong improvement in large-scale power production is needed. “Our power grids still require balancing from some of the off-grid or micro-grid smaller production facilities, which are really good, especially from a household electrification perspective, but it can’t solve the industrialisation challenge that we currently face in Africa,” said Malan.

Five key trends

According to the Frost & Sullivan expert, the following key trends are shaping the African energy sector:

Increasing tariff pricing and privatisation: Utilities across the region have relatively low tariff pricing, which means that from a profitability perspective the balance sheets are not necessarily where they are supposed to be. This means that additional infrastructure investment is quite low and it would have to come from the private sector.

Leapfrogging: Not so much leapfrogging from a feedstock perspective but more so from a technology perspective. Because of the lack of legacy infrastructure, we do have the opportunity to leapfrog some of the technologies and include investing in those that are significantly more efficient and effective.

Policy upgrades: A significant portion of the continent’s policies are relatively outdated, which has a tendency of driving weak industry structures. This is not very conducive to private sector players – as we see in places like South Africa.

Regional integration: Large-scale production infrastructure typically has to be shared across a number of countries but not one country can be the single off-taker, which means regional integration from an economic perspective is critical. This is being driven by a number of African governments, which we will see more of over the forecast period. It’s a big prerequisite to make sure that the energy industry does move forward.

Renewables and micro-grids: These are essentially breaking up the grid and circumventing some of the challenges that we face from a transmission and distribution infrastructure perspective and going directly to where the electricity gets consumed. ESI

The webinar was held in collaboration with POWERGEN Africa & African Utility Week conference where the experts will continue the conversation in November at the CTICC in Cape Town, South Africa.

Book your seats at www.powergenafrica.com or at www.african-utility-week.com