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Powering prosperity in Sub-Saharan Africa

Hydrocarbon Engineering,


According to the International Energy Agency (IEA), increasing access to modern forms of energy is crucial to unlocking faster economic and social development in Sub-Saharan Africa.

IEA’s Africa Energy Outlook reveals that more than 620 million people in the region (two thirds of the population) live without electricity, and nearly 730 million people rely on dangerous and insufficient forms of cooking.

The use of solid biomass (mainly fuelwood and charcoal) outweighs that of all other fuels combined, and average electricity consumption per capita is not enough to power a single 50-watt lightbulb continuously.

IEA Executive Director Maria van der Hoeven commented: “A better functioning energy sector is vital to ensuring that the citizens of Sub-Saharan Africa can fulfil their aspirations. The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge”.

The IEA’s analysis finds that the region’s energy resources are more than sufficient to meet the needs of its population, but that they are largely underdeveloped. The region accounted for approximately 30% of global oil and gas discoveries made over the last five years, and it is already home to several major energy producers, including Nigeria, South Africa and Angola. It is also endowed with huge renewable energy resources, including excellent and widespread solar and hydro potential, as well as wind and geothermal.

The report finds that investment in Sub-Saharan energy supply has been growing, but that two thirds of the total since 2000 has been aimed at developing resources for export. Grid based power generation capacity continues to fall far short of what is needed, and half of it is located in just one country (South Africa). Insufficient and unreliable supply has resulted in large scale ownership of costly back up generators.

In the report’s central scenario, the Sub-Saharan economy quadruples in size by 2040, the population nearly doubles (to over 1.75 billion) and energy demand grows strongly by approximately 80%. Power generation capacity also quadruples: renewables grow strongly to account for nearly 45% of total Sub-Saharan capacity, varying in scale from large hydropower dams to smaller mini and off-grid solution, while there is a greater use of natural gas in gas producing countries.

Natural gas production reaches 230 billion m3 in 2040, led by Nigeria (which continues to be the largest producer), and increasing output from Mozambique, Tanzania and Angola. LNG export onto the global market triple to approximately 95 billion m3. Oil production exceeds 6 million bpd in 2020 before falling back to 5.3 million bpd in 2040. Nigeria and Angola continue to be the largest oil producers by far, but with a host of other producers supplying smaller volumes. Sub-Saharan demand for oil products doubles to 4 million bpd in 2040, squeezing the region’s net contribution to the global oil balance. Coal supply grows by 50%, and continues to be focused on South Africa, but is joined increasingly by Mozambique and others.

The capacity and efficiency of the Sub-Saharan energy system increases, but so do the demands placed upon it, and many of the existing energy challenges are only partly overcome. In 2040, energy consumption per capita remains very low, and the widespread use of fuelwood and charcoal persists. Nearly one billion people gain access to electricity by 2040 but, because of rapid population growth, more than half a billion people remain without it. Sub-Saharan Africa also stands on the front line when it comes to the impacts of climate change, even though it continues to make only a small contribution to global energy related carbon dioxide emissions.

IEA Chief Economist Fatih Birol said: “Economic and social development in Sub-Saharan Africa hinges critically on fixing the energy sector. This payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by US$ 15.

In an ‘African Century Case’, the IEA report shows that three actions could boost the Sub-Saharan economy by a further 30% in 2040, and deliver an extra decades worth of growth in per capita incomes by 2040. These actions are:

An additional US$ 450 billion in power sector investment, reducing power outages by half and achieving universal electricity access in urban areas.

Deeper regional cooperation and integration, facilitating new large scale generation and transmission projects and enabling a further expansion in cross border trade.

Better management of energy resources and revenues, adopting robust and transparent process that allow for more effective use of oil and gas revenues.

As well as boosting economic growth, these actions bring electricity to an additional 230 million people by 2040. They result in more oil and gas projects going ahead and a higher share of the resulting government revenues being reinvested in key infrastructure, according to the IEA. More regional electricity supply and transmission projects also advance, helping to keep down the average cost of supply. However, the report warns that these actions must be accompanied by broad governance reforms if they are to put Sub-Saharan Africa on a more rapid path to a modern, integrated energy system for all.


Adapted from a press release by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/13102014/power-prosperity-in-sub-saharan-africa-1404/


 

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