The news and everyday topic in Ghana, Nigeria and South Africa these days is dominated by energy issues. While the Energy Minister of Ghana at least admits that the power crisis will last until May 2015, South Africa and Nigeria are just exposing their people, business and the whole economy to rolling black-outs and load-shedding programmes.
But it has to be noted that – beside the unlimited sources for renewable energy – Sub-Saharan Africa’s traditional energy resources are more than sufficient to meet the needs of its population, but because they are largely under-developed the region is struggling to reach its potential. The latest International Energy Agency (IEA) report states that 30% of global oil and gas discoveries were made in sub-Saharan Africa over the last five years and, already, the region is home to several major energy producers including Nigeria, South Africa and Angola. On the renewable energy front, the region is endowed with huge renewable energy resources, including excellent and widespread solar and hydro potential, as well as wind and geothermal.
In line with Africa’s impressive economic growth over the past years, investment in the sub-Saharan energy supply has also recorded an increase. Unfortunately, two thirds of the total investment since the year 2000 has been aimed at developing resources for export. In addition, grid-based power generation capacity continues to fall very far short of what is needed. It takes not degree in rocket-science to verify this every day!
Growing Energy Demand
The region has a huge potential to develop. The report foresees the sub-Saharan economy quadrupling in size by 2040, the population nearly doubling to over 1.75 billion and energy demand growing by 80%. “Power generation capacity also quadruples: renewables grow strongly to account for nearly 45% of total sub-Saharan capacity, varying in scale from large hydropower dams to smaller mini- and off-grid solutions, while there is greater use of natural gas in gas-producing countries,” states the report.
Natural Gas Production PlantBy 2040, Nigeria will be producing the bulk of the 230 billion cubic metres of natural gas in the region, whilst Mozambique, Tanzania and Angola will increase output. Especially with Uganda joining the oil-producing countries, the region will grow oil production to exceed six million barrels a day in 2020, before falling back to 5.3-million barrels a day in 2040 with a parallel coal supply growing by 50%. In this context South Africa will be the the leading producer if one leaves recent developments and supply situations around Majuba Power Station out of the equation….
On the capacity and efficiency of the region’s energy system, the report draws a mixed picture. It sees the energy system growing as does demand placed upon it. “In 2040, energy consumption per capita remains very low, and the widespread use of fuelwood and charcoal persists. The outlook for providing access to electricity is bittersweet: nearly one billion people gain access to electricity by 2040 but, because of rapid population growth, more than half a billion people remain without it. Sub- Saharan Africa also stands on the front line when it comes to the impacts of climate change, even though it continues to make only a small contribution to global energy- related carbon dioxide emissions.”
The huge number of people without electricity in the region – 620 million people or two-thirds of the population – is a main challenge for African countries. But there are solutions to sub-Saharan Africa’s energy conundrum. African countries can increase access to modern forms of energy as a way to unlock faster economic growth and social development, according to the report. But it seems paper is more patient than reality as the recent delays and legal impediments in South Africa show with regard to coal supply, renewable energy power producer bidding rounds and maintenance and operability of existing power plants.
Hence. a better functioning energy sector is vital to ensuring that the peoples of sub- Saharan Africa can fulfil their aspirations. The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge, IEA Chief Economist Fatih Birol says: “Economic and social development in sub- Saharan Africa hinges critically on fixing the energy sector. The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy”. Four courses of action that can bring electricity to an additional 230 million people as well as boost the sub-Saharan economies by a further 30% and deliver an extra decade’s worth of growth in per-capita income by 2040:
- An additional US$ 450 billion in power sector investment, reducing power outages by half and achieving universal electricity access in urban areas;
- Deeper regional co-operation and integration, facilitating new large-scale generation and transmission projects and enabling a further expansion in cross-border electricity trade as shown recently between Botswana and South Africa;
- Better management of energy resources and revenues, adopting robust and transparent processes that allow for more effective use of oil and gas revenues; and
- Cutting red tape in order to encourage and speed up private investments into the renewable energy sector.
This will facilitate bigger shares of the resulting government revenues being reinvested into key infrastructure. More regional electricity supply and transmission projects are also helping to keep down the average cost of electricity supply. However, these actions will have to be accompanied by broad governance reforms for sub‑Saharan Africa to achieve more rapid path to a modern, integrated energy system for all and looking at the current governance in a crisis mode like in Ghana and South Africa must create worries as to how seriously both governments currently deal with rolling black-outs and load-shedding….. they probably have a PV Solar System powering their offices 😉
Ralph M Ertner
Kjion Energy, South Africa