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The Renewable Energy Transition in Africa Powering Access, Resilience and Prosperity

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The Renewable Energy Transition in Africa Powering Access, Resilience and Prosperity The Renewable Energy Transition in Africa Powering Access, Resilience and Prosperity On behalf of the Foreword Energy is the key to development in Africa and the founda- drawn up a roadmap to achieve inclusive and sustainable tion for industrialisation. Like in Europe and other parts of the growth and development. One of the important topics covered world, the expansion of renewables goes beyond the provision is access to affordable, reliable and sustainable energy for all of reliable energy and climate protection. Economic develop- – SDG 7 of the 2030 Agenda. The international community, ment as a whole will benefit and new jobs and opportunities multilateral organisations and bilateral donors stand ready to for entire industries will emerge. Reliable, sustainable energy partner with African countries on their path towards sustaina- is at the same time indispensable for ensuring that people are ble growth and work with them to develop and implement so- provided with important basic services such as health care and lutions to attain that goal. safe drinking water. Green energy is the answer to the challenges of climate change Considering its unparalleled potential for renewables, Afri- and a critical step for reaching climate neutrality. Without the ca’s starting point for the transformation of the energy sec- global transformation of the energy sector, it will be impossible tor is strong. This said, electricity supply in Africa is lagging to achieve the 1.5 degree target of the Paris Agreement. considerably. Most people in Sub-Saharan Africa face severe energy poverty. Less than half of the population had access The prerequisites for the transformation of the African energy to electricity in 2018. Further, in terms of its size and popula- sector are in place. Crucial factors, in addition to know-how tion, Africa is well behind the rest of the world with regard to and technology, are the political and regulatory environment. the deployment of renewable energies. In 2018, only 20 per Technology solutions are abundant, cost competitive with fos- cent of the electricity generated in Africa was from renewa- sil fuels, and are ready to be deployed. The necessary ele- ble sources. Compared with the rest of the world, investment ments, such as stable energy systems, reliable regulatory is low. In 2019, two-thirds of all newly added energy capacity and financial policy frameworks, ambitious policy goals and for supplying electricity worldwide was based on renewable appropriate markets, including regional ones, are increasingly sources. However, only a mere two per cent of this new gene- available or can be realised. rating capacity was in Africa. Yet forecasts indicate that Africa could double its energy demand by 2040. This study shows how the transformation of the African energy sector can succeed and what opportunities and challenges lie At the same time, Africa is still investing in energy from fossil ahead in the next 30 years. It identifies key tools that can be fuels. A change of direction is needed in the energy sector. By utilised to accelerate the energy transition in the African conti- harnessing the potential of renewable energy, Africa’s young, nent and achieve universal access to electricity. Most import- dynamically growing economies can ensure energy supply is antly, the study demonstrates that SDG 7 can be achieved in generated in line with international climate goals. Africa by 2030. Africa can become a Green Continent. Our joint goal must, therefore, be to support African countries Let us join forces to achieve this goal together. in transforming their energy sectors. With Agenda 2063: The Africa We Want, African Heads of State and Government have Disclaimer This publication and the material herein are provided “as is”. All reasonable precautions have been taken by the Authors to verify the reliability of the material in this publication. However, neither the Authors nor any of its officials, agents, data or other third- Dr Gerd Müller, Member of the Francesco La Camera German Bundestag party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability Director-General, Federal Minister for Economic International Renewable Energy for any consequence of use of the publication or material herein. Cooperation and Development Agency (IRENA) The information contained herein does not necessarily represent the views of all countries analysed in the report. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by the Authors in preference to others of a similar nature that are not mentioned. The designations employed, and the presentation of material herein, do not imply the expression of any opinion on the part of the Authors concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries. The Renewable Energy Transition in Africa | Foreword 3 Executive summary Over the coming decades, the countries on the African conti- 1,000 times larger than its projected demand for electricity in nent can address fundamental challenges of energy access, 2040, which means that the continent has more than enough energy security and climate change. Countries still suffering renewable energy potential to serve its future demand. Furt- from energy poverty can achieve universal access to afforda- hermore, renewable energy – including green hydrogen – ble, reliable, sustainable and modern energy for all by 2030, could replace African exports of coal, oil and gas. This poten- as set out in the UN’s Sustainable Development Goal 7, im- tial is far from fully harnessed at this point. In 2019, 72 percent proving the livelihoods of hundreds of millions of their citizens. of the new electricity generation capacity added globally was At the same time, Africa can harness its abundant potential renewable. However, only 2,000 out of almost 180,000 MW of of increasingly cost-competitive renewable energy to service this new renewable power were added on the African conti- growing demand for electricity and avoid a potential fossil-fu- nent. The rest of the world is increasingly transitioning towards el lock-in. Even with efficiency measures in place, energy de- renewable energy-based electricity systems – and Africa has mand in African economies is expected to nearly double by the opportunity to do the same. 2040, as populations grow and living standards improve. By choosing sustainable energy sources over fossil fuels, Africa Energy transitions can be part of a strategy for a clean energy can create new jobs, experience greater economic growth and future, forward-looking industrial development, inclusive soci- harvest social and health benefits while helping to mitigate de- al progress and human welfare. IRENA’s Global Renewables vastating impacts of climate change. Outlook: Energy Transformation 2050 shows that decarboni- sing the global energy sector is more than fuel replacement. It African leaders have made clear their commitment to attaining is a means of job creation – renewables alone would account inclusive and sustainable economic growth and development for 45 million jobs in 2050, exceeding today’s 40 million energy in the Agenda 2063: the Africa We Want. Achieving universal jobs worldwide. Global GDP would be 2.4 percent higher with energy access is a critical underpinning of resilient and pro- renewables-based energy transition, opening ample avenues sperous economies and societies and remains a top priority for industrial development. African countries can thus leapf- for African nations. Successfully transitioning the energy sec- rog into a sustainable, secure energy future – one that fosters tor will depend on political leadership and ownership of the equitable human development and protects both livelihoods process. To support these goals, the international community and the environment. should bolster support efforts and encourage accelerated ac- tion. This study looks at the current state of play and proposes Accelerating energy transitions across Africa pathways for such support. Technology developments, falling costs for renewable ener- gies, innovative approaches, network effects and digitalisation Based on an analysis of the current state of the electricity sec- are opening new opportunities and making an indisputable tors on the continent, this study identifies the main enablers business case for renewables. With abundant indigenous re- necessary for countries to overcome a range of barriers to a sources, Africa is well placed to leverage this potential. Howe- green, inclusive energy transition in Africa. Furthermore, this ver, the potential and availability of cost-effective technologies study outlines the need for stronger coordination in promoting alone are not sufficient. Seizing this opportunity will require the energy transition, taking into account the specific political strong political will, attractive investment frameworks and a economy of respective national electricity sectors, and high- holistic policy approach to fully reap the benefits of renewable lights four focus areas where a broader set of development ins- energy. It also means that current average annual investments truments needs to be applied in order to create a new partner- in the African energy system must double by 2030 – to appro- ship between African governments and development partners. ximately 40-65 billion USD. This study
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