Later this year, the African Union will present a five-page document at the 27th Conference of the Parties on Climate Change (COP27) highlighting the benefits of developing a low-carbon oil and gas industry in the region. The booming industry will not only help the economies of petro-states, it will also provide an opportunity for oil and gas companies to develop and invest in their low-carbon fossil fuels and bridge the green transition gap as global demand continues to surge . At the same time, some African countries are stepping up their pace in developing green energy strategies and investing in renewable energy. But this is only the beginning of Africa's energy boom, as its vast renewable resources will further complement it.
In 2019, the International Renewable Energy Agency (IRENA) proposed to further expand the deployment of renewable energy in Africa and emphasized that the region contains a large amount of renewable energy, saying that Africa is expected to play a leading role in the future development of renewable energy. However, the current poor reliability of renewable energy supply in Africa has led to widespread power outages, so that many countries remain dependent on fossil fuels, hindering the development of the energy mix and overall economy. A recent IRENA report noted that “the continent’s abundance of biomass, geothermal, hydro, solar and wind energy has the potential to rapidly change the status quo in Africa.”
At the time of the report, 600 million people in Africa, or about 48 percent of the total African population, did not have access to energy. But IRENA says clean energy could meet about a quarter of Africa's energy needs by 2030. This will require increased annual investment to about $70 billion to increase renewable electricity from 42 kilowatts to 310 kilowatts to meet half of the region's electricity needs.
Several African countries have developed strategies and targets to support the development of renewable energy, including Egypt, Ethiopia, Kenya, Morocco and South Africa; several smaller countries have also set green energy targets; investment in solar energy across the African region is also A substantial increase. In 2021, Daniel-Alexander Schroth, Acting Director of Renewable Energy and Energy Efficiency at the African Development Bank (AfDB), said: “Solar PV is now the cheapest form of Reasonable option to increase capacity.”
Between 2019 and 2020, Africa’s solar and wind power capacity increased by 11% and 13%, respectively. During the same period, hydropower capacity increased by 25%. PricewaterhouseCoopers has reported that between 2013 and 2020, Africa's total installed renewable energy capacity has grown by 24 GW and is expected to increase from 180 million joules in 2020 to 2.73 billion joules by 2050. . In addition, PwC believes that Africa will need at least $2.8 trillion to achieve net-zero carbon emissions by mid-century.
According to PwC, Africa has the potential to develop 59 terawatts of wind energy capacity. Currently developed wind energy capacity accounts for only 0.01%, with 6,491 MW of installed capacity in 2021 and 1,321 MW of capacity under construction. Africa has 9,604 MW of solar capacity with 7,158 MW under construction, with the largest solar projects in South Africa, Egypt and Algeria. Bioenergy is expected to account for around 10% of Africa's renewable energy supply by 2050. Hydropower is also underutilized, with only 11% of low-cost electricity in operation, with great potential to develop geothermal power. When it comes to nuclear energy, South Africa is the only country on the African continent with a commercial nuclear power plant.
However, to build a strong renewable energy sector, Africa will need support from the international community, especially in terms of funding. Earlier this year, the International Energy Agency (IEA) held an event in Paris at which ministers and stakeholders from around the world agreed that “there is still a need to strengthen international action to address existing barriers to clean energy investment and This in turn facilitates capital deployment across the continent.”
Foreign investment in renewable energy in Africa is already increasing. For example, U.S. investors have joined forces with the U.S. Agency for International Development (USAID) and Prosper Africa to explore the green energy potential of renewable energy in Africa. This is part of the U.S. government's initiative to increase trade and investment between African countries and the United States. At COP 26, some of the world's richest countries pledged $8.5 billion in climate grants and concessional loans to South Africa. Additionally, it will need more private investment to limit its coal and oil production and develop its renewable energy sector.
In addition, British company TuNur announced that it will invest $1.5 billion in the construction of a 500-megawatt solar power plant in Tunisia, North Africa. Meanwhile, the British government's financial development arm, British International Investment Corporation (BII), plans to invest $6 billion in Africa over the next five years, mainly in renewable energy and digital infrastructure. Nick O'Donohoe, chief executive of BII, said: "We have been a significant investor in Africa's power sector, initially in fossil fuel energy, and over the past three to four years, almost entirely renewable energy."
In conclusion, in addition to its huge low-carbon oil and gas potential, the African region could also become a renewable energy powerhouse. However, with limited infrastructure and limited national funding for renewable energy development, the international community must direct energy investment to the region to build a strong renewable energy sector and contribute to global net-zero energy development.