Climate action, energy security and energy access policies are paving the way for the energy transition and the diversification of the energy mix across the African continent. This is one of the key takeaways from a webinar hosted by energy market research firm, Rystad Energy, on 25 April, 2022.
The webinar entitled, ‘How the power mix will evolve in the next 30 years’ explored the current state of Africa’s energy mix and the role of gas, nuclear and renewable energy in improving energy access, as well as policies that are driving change across the African and global energy landscape.
With the power sector contributing heavily to greenhouse gas emissions, African economies such as Nigeria, South Africa, Kenya, Egypt and Uganda are prioritizing diversifying their energy mix for decarbonization and energy security. At the heart of these developments are government policies that also aim to improve access to energy, with sub-Saharan Africa having nearly two thirds of the world population without electricity access.
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Nigeria has pledged to achieve carbon neutrality by 2060 by increasing the deployment of renewables and integrating gas in its energy mix whilst South Africa is in the process of developing its energy transition roadmap.
“Coal demand is starting to slow down but again will peak in 2027 and start to decline again as renewables penetration increases. Countries like South Africa need to move away from coal to reduce emissions. Given that demand continues to grow rapidly in Africa, the continent needs to ensure in meeting the demand it won’t compromise the emissions,” stated Carlos Torres Diaz, Senior Vice President, Head of Gas and Power Markets Research at Rystad Energy. As such, the role of gas in ensuring there is adequate baseload power will continue to increase.
However, solar PV will outpace all the other energy sources to account for 40% of the continent’s power generation by 2050, according to Rystad Energy. The energy research firm predicts that up to $10 trillion will be needed to expand the portfolio of solar whilst $6 trillion will be needed to build wind energy projects. While the southern part of Africa has the maximum solar potential, wind is central in the northern part.
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However, Diaz added that to ensure the potential of solar is maximized, “Batteries will be required to address the intermittence. Large investments in transmission infrastructure will also be required. More focus has been put on solar development at the expense of transmission networks. With solar taking two years to develop and the development of transmission taking up to ten years, governments need to address the gap in infrastructure development.”
Africa is also increasingly seeing a number of countries wanting to stabilize their energy supply by developing nuclear energy facilities, added Nivedh Thaikoottathil, Power Markets Research Analyst at Rystad Energy.
Whilst South Africa is the only country in Africa currently with an operational nuclear power plant, the southern African economy will join Kenya, Uganda and Ghana to develop new nuclear facilities in late 2030s, added Thaikoottathil.
Ghana is expected to select the site at which a 1GW nuclear energy facility will be constructed by the end of 2022, whilst South Africa will expand its nuclear output to 2.5GW by constructing the Thyspunt project as Egypt finalizes its licence for the El Dabasa NPP nuclear plant which is expected to come online by 2028. Rystad Energy said it also predicts Nigeria will develop and bring online the Itu Geregu nuclear facility by 2025.
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At the same time, with Europe struggling with energy reliability at the wake of the bloc wanting to reduce its reliance on Russian fossil fuels over the Ukrainian war, Diaz reiterated that Europe can take advantage of the good solar potential which north Africa has.
There is a need for north Africa and Europe to invest heavily in interconnections of power systems so that north Africa can supply to Europe, he said.
