IAEA Africa Energy Outlook

IAEA Africa Energy Outlook

Boosting African energy development in three steps

By Barbara Vergetis Lundin

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Sub-Shaharan Africa has more than enough energy resources to meet the needs of its population, but these resources are largely under-developed, according to a report by the International Energy Agency (IEA).
The region accounted for almost 30 percent of global oil and gas discoveries made over the last five years, and is already home to several major energy producers, including Nigeria, South Africa and Angola, according to the report, as well as having access to huge renewable energy resources, including solar, hydro, wind and geothermal.
However, IEA says that the region's energy sector is acting as a "brake on development," as more than 620 million people (two-thirds of the population) live without electricity. According to the report, the use of solid biomass (mainly fuelwood and charcoal) outweighs all other fuels combined, and average electricity consumption per capita is not enough to power a single 50-watt light bulb continuously.
Investment in sub-Saharan energy supply has been growing, the report says, but 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 backup generators.
In the report's central scenario, the sub-Saharan economy quadruples in size by 2040, the population nearly doubles and energy demand grows by around 80 percent. 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.
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, according to the report's central scenario. 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: 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.
"Economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector," said Fatih Birol, IEA chief economist. "The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by $15."
The report reveals three actions that could boost the sub-Saharan economy by 30 percent in 2040, and deliver an extra decade's worth of growth in per-capita incomes by 2040:

1. An additional $450 billion in power sector investment, reducing power outages by half and achieving universal electricity access in urban areas.
2. Deeper regional co-operation and integration, facilitating new large-scale generation and transmission projects and enabling a further expansion in cross-border trade.
3. Better management of energy resources and revenues, adopting robust and transparent processes that allow for more effective use of oil and gas revenues.

However, the report warns that without government reforms, these actions may be futile.
For more:
- see the report

http://www.iea.org/publications/freepublications/publication/WEO2014_AfricaEnergyOutlook.pdf