Africa’s unclear path to renewable energy

The African continent has huge potential to expand renewables and launch an energy revolution, but abundant fossil fuel reserves mean the path to progress is far from clear

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By Mark Rowe

It’s sometimes said that if the Industrial Revolution had taken place in Africa, the world would now run entirely on solar energy. Yet while that resource is abundant – most of the region enjoys more than 300 days of bright sunshine a year – many nations on the world’s poorest continent are acutely aware of the opportunities that their fossil fuels offer, not only for lucrative short-term revenues but for the basic access to energy much of the world takes for granted. More than 645 million people on the continent don’t have access to electricity.

As African economies expand, the energy sources to which the continent turns will influence the planet’s path towards mitigating climate change. Decisions made today will shape the continent’s energy sector – and the planet’s – for decades. 

Rapid growth and huge potential

Since 2000, Africa has experienced rapid economic growth and improving social conditions. Given the continent’s large and growing population, energy demand is expected to nearly double by 2040. Right now, the continent relies on oil, gas and coal for more than three-quarters of electricity-grid power generation. Yet clean, indigenous and affordable renewable energy solutions can offer the continent the chance to achieve its economic, social, environmental and climate objectives. According to the International Renewable Energy Agency (IRENA), Africa could meet nearly a quarter of its energy needs from indigenous and clean renewable energy by 2030. Gazing deeper into the crystal ball, IRENA projects that the continent could increase the share of renewables in its total energy mix to as much as two-thirds by 2050.

The potential renewable-energy resources across Africa are extraordinary. The portfolio includes almost unlimited solar potential (10 TW) and abundant hydro (350 GW), wind (59 TW) and geothermal energy sources (15 GW). However, it’s just that: potential. UNEP, the UN’s environment programme, describes Africa’s renewable energy resources as ‘diverse and enormous in quantity’, but its latest Atlas of Africa’s Energy Resources report says that Africa is ‘rich in energy resources but poor in its capability to exploit and use them’.

Ambition is apparent. The African Union aims to generate at least 300 GW of new renewable energy a year by 2030. This corresponds to a seven-fold increase from the capacity available in 2017, which amounted to 42 GW. The potential for transformative energy use is huge, resulting in carbon-dioxide emissions reductions of up to 310 megatonnes a year, according to the accountants PwC. Yet for now, most of this remains untapped. PwC calculates that only 0.01 per cent of wind potential is utilised, while 93 per cent of economically feasible hydropower potential remains unused.  

Ironically, Africa already uses more renewable energy than any other of the world’s regions, deriving as much as 70 per cent of its energy consumption from what can loosely be termed renewable sources. However, much of this involves a heavy reliance on traditional uses of biomass by both households and industry. It’s estimated that four out of five homes rely on solid biomass, mainly fuelwood and charcoal for cooking, which are not only far from sustainable but often involve potential health risks from indoor air pollution.

Women and children would particularly benefit from a transition to cleaner energy sources, according to the International Energy Agency (IEA). ‘Indoor or rooftop renewable systems for cooking and lighting lead to a reduction of indoor air pollution, reduced working hours on collecting and preparing the fuel, and better working or studying conditions of improved lighting or phone-charging devices,’ says an IEA spokeswoman. ‘All these contribute to the enhanced wellbeing of local people.’

Scaling up renewables

Even if much of Africa’s renewable potential remains untapped, clean energy is being rolled out and scaled up in pockets of the continent. ‘Renewable energy capacity is growing quickly on the continent,’ says Wei Shen, a research fellow at the Institute of Development Studies. ‘This is due to ample wind, solar and geothermal sources, which are really changing the energy endowment in Africa. Over the past decade, newly added power-generation capacity has mainly come from renewables rather than fossil fuels. The scale and distribution of energy resources, production and consumption trends is huge, as is the existing potential for environmentally sustainable expansion.’

According to the World Economic Forum, from 2019 to 2020, solar and wind capacity increased by 13 per cent and 11 per cent respectively, while hydropower soared 25 per cent. ‘Sustainable development and use of the continent’s massive biomass, geothermal, hydropower, solar and wind power have the potential to rapidly change Africa’s current realities,’ says a spokesperson for IRENA, who points to Africa’s wider potential role in tackling climate change at a global level. ‘Endowed with significant renewable-energy resources, a rapidly growing economy and a large population with increasing energy demand, Africa is crucial to accelerating the transition to renewable energy.’

With irradiance levels twice the average for Germany, where a thriving solar industry has developed, solar energy potential alone is believed to provide more than all the energy capacity needed in Africa. Shen describes Africa as ‘having the best solar radiation in the world’. The distribution of sunlight across Africa is fairly uniform, with more than 80 per cent of the landscape receiving almost 2,000 kWh per square metre per year. This gives solar power the potential to bring energy to most locations in Africa without the need for expensive large-scale grid infrastructure. The US Department of Energy’s National Renewable Energy Laboratory describes Africa’s solar energy potential as ‘huge’ and equivalent to 90–100 million tonnes of oil per year.

The continent is already home to the world’s largest concentrated solar power plant, the Noor Complex, located in the Sahara Desert in Morocco. The project, whose first phase was switched on in 2016, has a 580-megawatt capacity and provides electricity for more than a million people.

Africa’s wind energy potential is also substantial. In 2020, a study by the International Finance Corporation found that continental Africa possesses an onshore wind potential of almost 180,000 TWh/annum, enough to satisfy the entire continent’s electricity needs 250 times over. Wind is primarily being utilised in Morocco and Egypt, with modest opportunities in Tunisia, South Africa and Tanzania. Egypt has an installed wind generation capacity of almost 1.5 GW across 13 wind farms and expects to commission another 2 GW by 2025 with an additional 14 wind farms. South Africa has commissioned 34 wind farms with an installed capacity of more than 3.3 GW. Wind farms have also been commissioned in Cabo Verde, Kenya and Djibouti, as well as a pan-national project in Senegal and Mauritania. In March 2022, Niger signed a contract for its first wind farm.

Tidal power is seen as a huge opportunity along the continent’s east and west coasts, with UNEP reporting studies that suggest ocean-current-turbines along the 2,000-kilometre coastline from Morocco to Senegal alone could potentially generate all of Africa’s energy needs. Meanwhile, green hydrogen operations remain embryonic but are widely recognised as having huge potential. The Mauritanian Ministry of Petroleum, Mines and Energy is progressing Project Nour, a potential development of up to 10 GW from onshore solar and offshore wind to be deployed for electrolysis to split water and produce green hydrogen and oxygen. Namibia issued a licence in 2021 to develop southern Africa’s first gigawatt-scale green hydrogen project to produce 300,000 tonnes of green hydrogen a year.

Geothermal power has also been identified along the East African Rift System, although PwC notes that this potential remains mostly untapped. As for nuclear power, South Africa has the continent’s only currently operating nuclear projects generating energy, although 100 MW of nuclear is under construction in South Sudan. Ghana, Egypt, Morocco, Niger and Nigeria are also considering adopting nuclear power. 

Economic benefits

The long-term benefits of following the renewables path have been laid out by many economists. PwC point out that fossil fuel extraction and processing creates 2.7 jobs per US$1 million invested in Africa, compared with 7.5–15 jobs per US$1 million invested in renewable energy and energy efficiency. ‘Renewables can be applied under different scenarios to serve both productive and non-productive purposes,’ says Shen, ‘from irrigation, milling, schools, hospitals, churches, outdoor and indoor lighting, and phone charges to computers.’

According to Shen, clean energy can also overcome many of the infrastructure problems faced by fossil fuel engineering and transportation. ‘Renewable energy, particularly solar, can provide flexible solutions to various energy/development problems,’ he says. ‘It can be developed as utility-scale infrastructure or off-grid systems. It can be applied in different rural and urban contexts. It can enhance African countries’ energy independence as these are local sources, and hence with very limited uncertainties around importing raw materials, unlike most fossil fuel infrastructure.’

But the fact remains that African nations can’t unilaterally embrace renewables and trigger the transition on their own. Estimates from UNEP and PwC indicate that the continent needs anywhere from US$43 billion to US$70 billion per year between 2030 and 2040, compared to current energy investments of about US$8–9.2 billion. ‘Notwithstanding the significant innovation and related cost reduction being realised from renewable energy technologies, the required capital investment for sustainable energy supply in Africa must cover the generation, much-needed sector reform as well as grid and utility strengthening,’ says a PWC spokesman. ‘This is often simply unaffordable to poorer economies.’

Shen is concerned that international funding is already levelling off, just when it needs to increase. ‘Most African countries are in dire need of reform of their electricity sector to be more competitive and efficient,’ he says, ‘but public and private funding are drying up due to the impact of Covid and looming economic recessions at a global level. Innovative financial solutions could be experimented with, such as green bonds or even crowdfunding, but in the near term, they are unlikely to play a major role to change the overall risk appetite among private and development financiers.’

Without such international support, African nations may have little choice but to turn to their fossil fuel resources. Excluding South Africa, nearly one billion people across 48 countries in sub-Saharan Africa share roughly the same generation capacity as Germany’s population of 83 million people. Of the world’s 20 countries with the least access to electricity, 13 are in Africa: Nigeria, Ethiopia, Democratic Republic of the Congo (DRC), Tanzania, Kenya, Uganda, (the former) Sudan, Mozambique, Madagascar, Niger, Malawi, Burkina Faso and Angola. Close to 70 per cent of rural African areas aren’t connected to the grid. 

Low energy supply, complete with shortages, high costs and poor access, provide major economic and social impediments, according to a report by Sustainable Energy Fund Africa. Only 34 per cent of hospitals and 28 per cent of health facilities in sub-Saharan Africa have reliable electricity access; about 58 per cent of health care facilities in sub-Saharan African countries have no electricity at all.

‘Sub-Saharan Africa has a massive population without access to the power grid and relying on burning biomass or kerosene for cooking, heating, lighting or other household purposes,’ says Shen. ‘Any external actors who wish to accelerate Africa’s take-up on renewables should first focus on how to make up these financial, technological, and capacity gaps, before urging Africa to cut off its reliance on fossil fuels.’

The lure of fossil fuels

Given the lack of energy infrastructure, it’s unsurprising that fossil fuel resources provide a juicy bait. The continent’s proven fossil fuel reserves are estimated at more than US$15.2 trillion. 

Sub-Saharan Africa has undiscovered, but technically recoverable, energy resources estimated at about 115.3 billion barrels of oil and 21 trillion cubic metres of gas. In sub-Saharan Africa, nearly half of the current export value is derived from fossil fuels with an estimated contribution to GDP from Africa’s current oil, coal and gas production of US$156.2 billion.

Several nations are itching to expand output or join the ranks of oil exporters and see fossil fuel revenues as the key to decoupling themselves from international and donor aid. Libya and Nigeria combined have the largest share of oil by far, accounting for 63 per cent of the African total, with Algeria and Angola adding another 20 per cent. Algeria, Libya, Egypt and Nigeria, meanwhile, are already among the largest gas producers in the world. Important natural gas resources have recently been discovered in Mozambique, while recent discoveries of gas in East Africa have been welcomed by governments who see an opportunity for them to be of enormous benefit to the high-population-density region of the Rift Valley for cooking, power generation, transportation and fertiliser production.

Unconventional oil reserves are being identified all the time and Angola, Madagascar, Congo, Nigeria, South Africa, Ethiopia and the DRC have vast bitumen deposits rich in tar sands oil and/or oil shale. In July 2022, the DRC began auctioning 27 new oil blocks for exploration, including several that infringe on vast tracts of tropical rainforest and peatlands that store billions of tonnes of carbon, and two that are partially inside Virunga National Park, home to a third of the world’s remaining mountain gorillas. Coal is concentrated, for now, in southern Africa; South Africa produces around 140 million tonnes of oil equivalent from its coal sector while Zimbabwe’s single mine, Hwange, is another important coal producer.

All of this comes with a moral issue. The West developed rapidly on the back of fossil fuels and despite calls and pledges to rely primarily on renewables, China and India are doing the same. Why should anyone reasonably expect the world’s poorest continent to take a different approach?

A 2021 PwC report notes how Africa ‘is being swept along in the global energy transition and increasingly coming under the same net-zero policy pressure as developed economies such as the EU [that contribute far more to global warming].’ The same report notes that ‘Africa still has significant untapped fossil fuel reserves, which could provide much-needed foreign direct investment and export revenue. Despite the clear and necessary long-term decline in demand for fossil fuels, shorter-term demand and prices remain buoyant, providing strong commercial justification for their exploitation.’

This autumn, Emmanuel Ibe Kachikwu, the former Nigerian minister of state for petroleum resources, called on African countries ‘to first focus on the existing energy resources that we have and exploit that for our development while collaborating with the rest of the world to work out a long-term energy transition plan that is best for Africa… renewable technology is not ready to carry the major energy load needed to develop and progress Africa out of poverty for at least another decade, if not longer.’

Setting a course for net zero

Given its renewable resources, there is huge environmental and political pressure for Africa to utilise these as its economies expand. Africa has the world’s lowest per capita energy consumption: with 16 per cent of the world’s population it consumes just 3.3 per cent of global primary energy. Yet it’s already one of the most energy-intensive regions, obtaining little economic output from its modest energy use. Unless renewables enter the picture, population growth and rapid urbanisation will increase the use of inefficient fuels for cooking and lighting. Expansion of traditional fossil fuels will have important impacts on ecosystems, Africa’s natural wealth and magnificent wildlife. 

Despite the phenomenal income to be made from fossil fuels, 35 of Africa’s 54 nations have undertaken some form of commitment to net zero, according to PwC. ‘Africa is not responsible to save others from the climate crisis as it is not these countries who created this mess,’ says Shen, ‘but Africa needs to save itself by transforming its own energy system as soon as possible to embrace these new technology and development opportunities embedded in the global trend of renewable energy revolution.’

If Africa opts to take the fossil fuel bait, warns Shen, it risks being the poor relation when renewables become mainstream elsewhere. ‘Africa does have sufficient and exploitable renewable energy resources, which can benefit it tremendously,’ he says. ‘Otherwise, it will lag behind once again. I am cautiously optimistic as the value of renewables is now well recognised among African leaders. To put it simply, Africa needs more energy – the cleaner the better.’