The Renewable Energy Transition in Africa

Introduction
Over the coming decades, the countries on the African conti-nent have the opportunity to address two fundamental energy challenges. First, they can achieve universal access to affor-dable, reliable, sustainable and modern energy services by 2030, as set out in the United Nation´s Sustainable Develop-ment Goal 7, thereby improving the lives of hundreds of mil-lions of their citizens. At the same time, African countries can harness the power of renewable energy, which has emerged as a technologically viable and economically attractive alterna-tive to fossil fuels, and avoid being locked into a dependency on fossil fuel energy.

Energy in Africa today
Around half of Africa’s total population (548 million people) were without access to electricity in 2018 (IEA et al., 2020; World Bank, n.d.). In the same year, 900 million people on the
African continent relied on traditional use of biomass – such as charcoal and firewood – as their primary source of energy for cooking. Most of these people live in Sub-Saharan Afri-ca. Meanwhile, African businesses – from micro-enterprises to agriculture to industry – are held back by the lack of a re-liable, affordable energy supply. Unless these challenges are addressed in a concerted manner, they will only intensify, as estimates indicate that the population will increase by one bil-lion people in Sub-Saharan Africa and almost 100 million in
Northern Africa by the year 2050 (World Bank, 2019a).

Indeed, expanding rates of electricity access and demand have so far gone hand in hand with gross domestic poduct (GDP) growth in developing countries, as documented by ma-cro-economic studies (e.g., Stern et al., 2017). In addition to freeing up time usually spent on household labour for other economic activities, a sufficient, reliable electricity supply ena-bles value creation and economic growth through productive use. Electricity is the gateway to a modern economy based on digital infrastructure and telecommunications, and it also all-ows existing and potential companies in traditional industries to improve their efficiency and participate in local and global markets.

Solar photovoltaic PPA prices by estimated year of commissioning

Falling renewable energy prices are a game-changer, with consequences beyond electricity generation. For example, cheap renewables may pave the way for the transformation of
other energy-intensive sectors, such as transport and indus-try. Vehicles powered by electricity generated from renewable energy sources could end up enabling the climate-friendly fu-ture of transport, both in Africa and globally.

Access to electricity The share of Africans with access to electricity in their homes increased from 36 per cent in the year 2000 to 54 per cent in 2018 (IEA, 2019c), which is notable progress, especially con-sidering the significant population growth during that period
and the large investments required to connect people, parti-cularly in rural and peri-urban areas. Still, around 548 million people in Africa have no access to electricity today. Of these,
472 million live in rural areas.

The African electricity sector’s CO2 emissions
The electricity sector contributed 39 per cent of total energy-related CO2 emissions from African countries in 2017 (IEA, 2019b). On a per capita basis, emissions from the electrici-ty sector were almost seven times higher in the European Union than in Africa. Internal differences among countries on the continent, however, are even more striking. For example,
per capita emissions from electricity generation in South Afri-ca were around 220 times higher than those in Benin. This is a consequence of higher per capita electricity consumption, combined with the dominance of coal in South Africa’s elec-tricity mix.

African electricity sectors: Towards 2050

Population growth and expanding economies are expected to nearly double the demand for electricity in Africa by 2040 (IRE-NA, 2019a). The economic, social and environmental impacts
of meeting this demand will depend on the policies which Af-rican governments put in place to address the following twin challenges:

Ensuring universal access to affordable, reliable, sus-tainable and modern energy by 2030. Sustainable and secure access to electricity in the face of growing demand is about more than simply dividing households into those with and those without a connection to electricity. It is also about a sufficient, reliable supply that will support productive uses and create jobs. Moreover, it requires a least-cost expan-sion that makes end use affordable even for poor house-holds, while maintaining financially sound utilities (on- or off-grid, as the case may be). It is about helping people enjoy the benefits of reliable electricity supply in their daily lives.

Harnessing the power of renewable energy for socio-economic development while mitigating climate change. Countries where fossil fuels currently dominate the electricity mix will need to transition towards the adoption of renewable energy technologies and phase out existing fossil fuel-based generation capacity. Where electricity systems are nascent, appropriate measures must be taken to ensure that the long-term future development path is based on carbon-free resources. Even with cost-competitive renewable energy, there are currently structural barriers that may incentivise investments in natural gas and coal power
plants. These challenges must be overcome to unlock the ull potential of renewables in Africa.

Enabling the renewable energy transition in Africa

Africa has abundant renewable energy resources and is there-fore well placed to meet the electricity demands of its growing population and economies with clean, affordable electricity. However, the previous sections have identified a number of common structural barriers to energy transition across many African electricity sectors. These include: i) a lack of capacity
in key institutions, which leads to weak sector planning and management; ii) weak or absent regulatory and legal frameworks, which makes private investment in renewable energy expensive and in some cases unviable; iii) electricity grids with high loss rates and limited capacity to absorb variable renewable generation; iv) in some instances, the high costs of decentralised solutions such as mini-grids; and v) financially unsustainable grid and service providers (e.g., utilities and mini-grid operators) that are unable and/or not incentivised to
expand access, undertake required maintenance or invest in guaranteeing security of supply. There is a clear need for collective action on the part of African countries and pan-African
institutions, supported by their development partners, to address these structural barriers and make universal access and decarbonisation a reality.

Energy transition enablers

The variability of some renewable energy sources, such as wind and solar PV, may increase the complexity involved in operating an electricity system. It also poses technical and economic challenges for the integration of such technologies. These challenges have triggered innovative solutions in different countries and regions. Two decades ago, integrating shares of variable renewables as high as 10 per cent was thought to be extremely challenging. Today, many countries around the world have demonstrated that it is absolutely pos-sible to operate power systems with a much higher share of variable renewable energy. Denmark manages an electricity system with a nearly 50 per cent share of variable renewables to cover its annual electricity demand; Germany achieved a similar share in early 2020. Moreover, many countries are al-ready operating national power systems with over 20 per cent variable energy sources, including Ireland, Portugal, Spain, and Texas in the United States.

These innovations offer a great opportunity for African count-ries to leapfrog traditional power system architectures while developing and investing in the new infrastructure and market reforms required. Countries in Africa could plan for and imple-ment innovative solutions, considering global best practices while tailoring these to their own context and needs.

Click to download:

This entry was posted in Africa, Renewables, Solar, Solar PV and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s