IEA calls for urgent acceleration of cleaner energy investment in Africa
The International Energy Agency (IEA) has released its Africa Energy Outlook 2022 report where it calls for urgent acceleration of investment for cheaper and cleaner energy in Africa. The IEA says the crippling spikes in energy prices currently being experienced globally underscores the urgency for investment in Africa.
“Russia’s invasion of Ukraine has sent food, energy and other commodity prices soaring, increasing the strains on African economies already hard hit by the Covid-19 pandemic,” the IEA said.
“The overlapping crises are affecting many parts of Africa’s energy systems, including reversing positive trends in improving access to modern energy, with 25 million more people in Africa living without electricity today compared with before the pandemic.”
“At the same time, Africa is also already facing more severe effects from climate change than most other parts of the world – including massive droughts – despite bearing the least responsibility for the problem. Africa accounts for less than 3% of the world’s energy-related CO2 emissions to date and has the lowest emissions per capita of any region,” stated the IEA.
Africa poised to attract more cleaner energy investment
Despite these challenges, the report finds that the global clean energy transition holds new promise for Africa’s economic and social development, with solar, other renewables and emerging areas such as critical minerals and green hydrogen offering strong growth potential if managed well. Increased international ambitions for cutting emissions are helping set a new course for the global energy sector amid declining clean technology costs and shifting global investment patterns. African countries are poised to benefit from these trends and attract increasing flows of climate finance.
“Africa has had the raw end of the deal from the fossil fuel-based economy, receiving the smallest benefits and the biggest drawbacks, as underlined by the current energy crisis,” said Fatih Birol, the IEA Executive Director. “The new global energy economy that is emerging offers a more hopeful future for Africa, with huge potential for solar and other renewables to power its development – and new industrial opportunities in critical minerals and green hydrogen.”
“The immediate and absolute priority for Africa and the international community is to bring modern and affordable energy to all Africans – and our new report shows this can be achieved by the end of this decade through annual investment of $25 billion, the same amount needed to build just one new LNG terminal a year,” Dr Birol added. “It is morally unacceptable that the ongoing injustice of energy poverty in Africa isn’t being resolved when it is so clearly well within our means to do so.”
The Africa Energy Outlook 2022 explores a Sustainable Africa Scenario in which all African energy-related development goals are achieved on time and in full. This includes universal access to modern energy services by 2030 and the full implementation of all African climate pledges.
Doubling investment key to achieving 2030 targets
With demand for energy services in Africa set to grow rapidly, ensuring affordability is an urgent priority. Increased energy efficiency is essential for this, since it reduces fuel imports, eases strains on existing infrastructure and keeps consumer bills affordable.
According to the IEA’s Sustainable Africa Scenario, expanded and improved electricity grids provide the backbone of Africa’s new energy systems, and are powered increasingly by renewables. Africa is home to 60% of the best solar resources worldwide, but it currently holds only 1% of solar PV capacity. Already the cheapest source of power in many parts of Africa, solar is set to outcompete all other sources continent-wide by 2030. Renewables – including solar, wind, hydropower and geothermal – account for over 80% of new power generation capacity added by 2030 in the Sustainable Africa Scenario.
IEA says for Africa to achieve its energy and climate goals, investment would need to be doubled this decade. This would take it over USD 190 billion each year from 2026 to 2030, with two-thirds going to cleaner energy.
“Multilateral development banks must take urgent action to increase financial flows to Africa for both developing its energy sector and adapting to climate change,” said Dr Birol.
“The continent’s energy future requires stronger efforts on the ground that are backed by global support. The COP27 Climate Change Conference in Egypt in late 2022 provides a crucial platform for African leaders to set the agenda for the coming years. This decade is critical not only for global climate action but also for the foundational investments that will allow Africa – home to the world’s youngest population – to flourish in the decades to come.”