Africa Renewable Energy Outlook: We must be pragmatic about our current realities

 Africa Renewable Energy Outlook: We must be pragmatic about our current realities

NJ Ayuk, Executive Chairman, African Energy Chamber

Renewable energies hold great promise for Africa.

As more operators invest in the continent’s clean energy and energy transition goal, we will undoubtedly see continued growth. At the African Energy Chamber (AEC), we are excited about the possibilities before us.

And yet, our enthusiasm is tempered by a bit of reality: Africa’s current renewable energy capacity and geographic reach are limited. At present, very little contributes to meeting Africa’s energy needs. We need to be realistic about the capabilities – and limitations – of green energy sources, rather than pressuring the continent to prematurely abandon fossil fuels.

As the Chamber of Commerce’s The State of African Energy Q1 2023 Outlook Report indicates, nearly 80 percent of the continent’s capacity in 2023 is powered by wind and solar energy. But even in these “bastions”, only 7 percent of wind capacity and 9 percent of solar capacity are currently operational.

We expect Africa’s capacity in 2023 to reach 21.5 GW, or 1 percent of global capacity. And while all indications are that it will reach 30 GW in the next two years, even this growth is miniscule, representing barely 2 percent of total global capacity.

Current global renewable energy capacity (which includes solar, wind and hydrogen electrolysis capacities) stands at 1,500 GW. On the other hand, the capacity announced by Africa for 2023 represents only a fraction of this capacity: 134 GW for wind, 120 GW for solar and 112 GW for hydrogen.

What is perhaps more worrying is that these figures relate to only a handful of countries. Djibouti, Egypt, Morocco, Mauritania, Namibia, Nigeria and South Africa produce, to varying degrees, the vast majority of current renewable energy capacity. This means that most of the continent lags much further behind – or adds absolutely nothing – to the continent’s total green capacity.

These statistics clearly show that renewable energy remains a distant promise. Green solutions alone are currently insufficient to provide energy to African populations.

CWP, Bechtel Lead Development

That’s not to say we aren’t seeing some exciting developments. Renewable energy developer CWP Global (Serbia) and US engineering, construction and project management giant are teaming up to deliver real results.

They are working on exciting renewable energy projects in a number of countries that account for almost 25 percent of the current announced capacity in Africa.

For example, the AMAN green hydrogen project in Mauritania, worth $40 billion, is the largest green hydrogen project on the continent. Once operational, it will have 15 GW of electrolysis capacity powered by 30 GW of combined solar and wind power.

In addition to boosting Mauritania’s GDP by up to 60 percent by 2035, AMAN promises other significant benefits for the country, from universal electrification to job creation to cleaner development through hydrogen vehicles.

The Moroccan AMUN project is another CWP Global project. The first phase near the city of Tan Tan, which is expected to be completed in 2029, is expected to produce 3 GW of wind power and 3 GW of solar power, which will then be used to produce green hydrogen for the local synthesis of ammonia.

CWP Global has also signed an agreement with the government of the Republic of Djibouti to develop a 10 GW renewable energy and green hydrogen center. Similar to the goals set in Mauritania, this project will go a long way in helping Djibouti foster a cleaner and more secure energy supply, create green jobs and businesses, and generate exports to emerging markets for low-carbon fuels. carbon content and industrial products.

promises, promises

This is all very promising. And we should all be thinking about the transition to green energy. However, more than 95 percent of the capacity announced by the partners (88.5 GW) is still in the design phase, and only 4 percent has received authorization to develop.

This simply underscores the need for African countries to move forward with the vast oil and gas resources at their disposal.

The green transition must be done in a strategic and judicious way, taking into account the needs of the African population. Let’s not forget that hundreds of millions of Africans do not have sufficient access to electricity in the current configuration, where hydrocarbons are still present. If we take away their little access to fossil fuels, they will literally be left in the dark.

Solar and wind farms capture renewable energy (from the sun or wind) and convert it into electricity. This electricity must then be transported to where it will be used or stored. Unfortunately, as our report highlights, much of the continent lacks sufficient transport infrastructure to cost-effectively accommodate large-scale solar and wind installations. Setting up the necessary transport and storage infrastructure will require significant capital.

As Cecily Davis, a partner at Fieldfisher and co-head of the European law firm’s Africa group, points out, many African hydrocarbon-dependent economies face a dilemma when it comes to investing in green energy projects: “If they reduce their consumption fossil fuels, they lose the tax revenue needed to fund other infrastructure; if they maintain their oil and gas production, it is more difficult for renewables to be competitive,” she said.

Related post