Energy transition central to Africa’s economic future
An integrated policy framework built around the energy transition could bring a wave of new sustainable energy investment to Africa, growing the region’s economy by 6.4% by 2050, results of an analysis published on 14 January by the International Renewable Energy Agency (IRENA) in collaboration with the African Development Bank (AfDB) revealed.
The report, Renewable Energy Market Analysis: Africa and Its Regions, shows that Africa is prospering significantly from development enabled by renewable, while greatly improving energy access and offering profound welfare and environmental benefits to people across the continent.
Its vision for an energy transition in Africa aligned with global climate ambition, shows the continent generating 26 million more economy-wide jobs by 2050 than is anticipated under a business as usual scenario plan. Jobs created through the energy transition in Africa would outstrip fossil fuel-related job losses by a factor of four, presenting a significant net gain to regional economies. Around two million people currently work in the fossil fuel industry in Africa.
Director-General of IRENA, Francesco La Camera said Africa’s governments and people are too often asked to rely on unsustainable fossil fuels to power their development when renewable energy and energy efficiency solutions offer economically attractive and socially beneficial alternatives. “The transition offers a unique opportunity for Africa to meet its development imperatives. Through tailored packages, African countries can harness their strengths and resources to overcome long-established structural dependencies,” he added. He further stated that enabling African countries, which have contributed little to historic greenhouse gas emissions, to develop while recognising the need to address the climate emergency is imperative. “International cooperation, including South-South cooperation, will be key to mobilising resources and know-how at the scale and speed proportionate to the need of Africa’s economies, its communities and its people,” he said.
Vice President for Power, Energy, Climate and Green Growth at AfDB, Dr Kevin Kariuki said Africa is endowed with abundant renewable energy sources, upon which it can sustainably base its ambitious socio-economic development. “However, this required strong political commitment, a just and equitable energy transition framework, and massive investment, we are committed to supporting the continent’s energy transition, by facilitating increased private sector investments through its expanding range of green finance instruments, including the Sustainable Energy Fund for Africa,” he emphasised.
Coal, natural gas and oil together account for about 70% of Africa’s total electricity generation today and conventional power attracts more funding than renewables in Africa, owing to an established process that favours less capital-intensive thermal generation, the report notes. Energy transition finance must become more readily accessible. Coordinated efforts should be made to ensure public spending, the dominant source of energy transition finance in Africa, clearly prioritises renewables.
Of the US$2.8 trillion invested in renewables globally between 2000 and 2020, only 2% went to Africa, despite the continent’s enormous renewable energy potential and its need to bring modern energy to billions of citizens still lacking access. While the rate of access to energy in Sub-Saharan Africa rose from 33% to 46% over the last decade, rapid population growth meant 570 million people still lack electricity access in 2019, which is 20 million more than 10 years ago. About 160 million more people lacked access to clean cooking over the same period.