IEA Africa report cites potential in renewables, minerals and hydrogen
The Africa Energy Outlook 2022, a special report published this week by the International Energy Agency (IEA), reveals that renewables will be the driving force that expands the African continent’s electricity sector this decade
The Africa Energy Outlook 2022, a special report published this week by the International Energy Agency (IEA), reveals that renewables will be the driving force that expands the African continent's electricity sector this decade.
The continent’s rich renewable resources also offer huge potential to produce green hydrogen, with potential production equalling the continent’s entire current energy demand, at internationally competitive price points by 2030. Meanwhile, Africa’s revenues from critical mineral exports should more than double by 2030.
However, investment in these areas must more than double over current levels, exceeding $190bn each year from 2026 to 2030, with two-thirds going to clean energy. This will require stepped up investment by development banks and, in part, supporting industrial development by expanding exploitation of the continent’s extensive and still untapped natural gas reserves.
“The immediate and absolute priority for Africa and the international community is to bring modern and affordable energy to all Africans,” said IEA Executive Director Fatih Birol. “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,” he said.
According to the report, Africa is home to 60 per cent of the best solar resources worldwide, but currently holds just 1 per cent of solar PV capacity. Solar power is already the cheapest source of power in many parts of Africa and is set to outcompete all other sources continent-wide by 2030.
The report presents a ‘Sustainable Africa Scenario’ in which renewables – including solar, wind, hydropower and geothermal – account for over 80 per cent of new power generation capacity added by 2030. This expansion of renewables allows the African countries to achieve their key energy-related development goals, including universal access to modern energy services by 2030 and the full implementation of their climate pledges (nationally determined contributions) to that year.
Thus, despite enormous challenges, Africa stands to benefit from declining clean energy technology costs and shifting global investment patterns that will help African countries attract increasing flows of climate finance. The world’s increasing ambitions to cut emissions will help the continent.
The IEA’s new report emphasizes prominent themes in Energy & Utilities’ Middle East and Africa Outlook Report 2022, published in March. The E&U report states that many countries in the region will have to prioritise renewable energy projects, rather than conventional oil and gas-fired alternatives, in order to attract investors and ensure project financing.
In Africa specifically, the E&U report says that as it becomes harder for fossil fuel schemes to raise funding, more attention is being given to renewable energy opportunities across the continent.
Market Outlook Report 2022
Find out about the business opportunities, regulatory environment in the Middle East's power market and the planned projects and investments in Africa's emerging utilities markets in Energy & Utilities' Middle East and Africa Outlook report.