In response to recent assertions that Africa must quadruple its investments in order to meet its energy and climate objectives, the International Energy Agency (IEA) has mapped out leading green transition pathways for the continent, yielding greater economic and social returns.
These sustainable development routes, presented in the IEA’s newly-launched Africa Energy Outlook report – a full policymakers’ summary of findings to be exhibited live at this year’s MSGBC Oil, Gas & Power conference to west Africa’s top corporate and government authorities in aid of formulating a unified African narrative in advance of December’s 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) – call for two thirds of additional investment to be directed
African economies are among the most vulnerable, while contributing only 3 percent of global energy-related emissions. By 2050, two degrees of global warming are anticipated to cause annual GDP losses of 8 percent. Consequently, an effective energy transition is an economic necessity for Africa. According to a recent UN research, however, African investments in renewables, such as those advocated by the IEA, actually generate 420 percent better returns in gross value addition and 250 percent better returns in job creation than investments in fossil fuels. In addition to creating four million new energy-related employment every year, adhering to the IEA’s road plan could avert more than 500,000 premature deaths per year.
According to the IEA’s analysis, Africa has only 1% of the world’s installed PV capacity, while being home to 60% of the world’s finest solar resources. This represents a tremendous opportunity. It projects that by 2030, renewables will account for more than 80 percent of new power generation capacity on the continent, noting that the costs of solar and wind energy have decreased by 85 percent and 55 percent, respectively, over the past decade, making them Africa’s least expensive energy sources. In addition, this has led to possibly the most unexpected discovery of all: the continent’s world-leading green hydrogen potential.
MSGBC will not be left behind if green hydrogen surpasses liquefied natural gas (LNG) as the fuel source of the future, as it is produced from seawater split by multi-gigawatt solar and wind arrays that operate 24 hours a day, seven days a week. With the signing of two memorandums of agreement last year, Mauritania has already secured $43.5 billion in foreign direct investment in carbon-neutral fuel. According to the IEA’s Africa Energy Outlook, green hydrogen has four benefits: zero carbon footprint, scalability, cost-effectiveness from modular deployment technologies, and resistance to reserve depletion and climate impacts.
Already, an estimated three-fifths of Africa’s thermal (gas and oil) power plants are at high or very high risk of disruption from water stress, with Mauritania averaging six rainy days per year, and one-sixth of Africa’s LNG capacity is vulnerable to coastal flooding, with extreme water events costing 10 percent of Senegal’s GDP annually. With a continental capacity to create 5,000 megatons of the fuel – equivalent to the world’s current primary energy consumption – for as little as $2 per kilogram, green hydrogen is immune to such threats.
Rita Madeira, Africa Program Officer at the IEA, will present a first-of-its-kind live executive summary keynote on the IEA’s Africa Energy Outlook report released last month, driving discussions on climate change, natural gas, and green hydrogen. The energy transition is at the top of the agenda for this year’s event.