Energy sector is key to powering prosperity in sub-Saharan Africa
IEA World Energy Outlook Special Report finds that action in the energy sector could unleash an extra decade of growth
13 October 2014 London
Increasing access to modern forms of
energy is crucial to unlocking faster economic and social development in
sub‑Saharan Africa, according to the International Energy Agency’s
(IEA) Africa Energy Outlook, a Special Report in the 2014 World Energy Outlook series.
More than 620 million people in the region (two-thirds of the
population) live without electricity, and nearly 730 million people rely
on dangerous, inefficient 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 light bulb continuously.
“A better functioning energy sector is
vital to ensuring that the citizens of sub-Saharan Africa can fulfil
their aspirations,” said IEA Executive Director Maria van der Hoeven. “The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge.”
In the IEA’s first comprehensive
analysis of sub-Saharan Africa, it finds that the region’s energy
resources are more than sufficient to meet the needs of its population,
but that they are largely under-developed. The region accounted for
almost 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 very 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
by around 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 solutions, while there is a greater use of natural gas in
gas-producing countries.
Natural gas production reaches 230
billion cubic metres (bcm) in 2040, led by Nigeria (which continues to
be the largest producer), and increasing output from Mozambique,
Tanzania and Angola. LNG exports onto the global market triple to around
95 bcm. Oil production exceeds 6 million barrels per day (mb/d) in 2020
before falling back to 5.3 mb/d 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 mb/d 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 it 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. The outlook for
providing access to electricity is bittersweet: 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.
“Economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector,” said IEA Chief Economist Fatih Birol. “The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by $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 decade’s worth of growth in
per-capita incomes by 2040. These actions are:
- An additional $450 billion in power sector investment, reducing power outages by half and achieving universal electricity access in urban areas.
- Deeper regional co-operation 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 processes 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. More regional electricity supply and transmission
projects also advance, helping to keep down the average cost of supply.
But 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.
Download the World Energy Outlook special report Africa Energy Outlook here.
The following factsheets are available for download: - Energy in sub-Saharan Africa today
- Sub-Saharan Africa - key projections to 2040
- Sub-Saharan Africa – main areas for policy action
About the IEA
The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 29 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing reliable and unbiased research, statistics, analysis and recommendations.
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