By NJ Ayuk, Executive Chairman, African Energy Chamber
Earlier this year, South Africa was making headlines around the globe for the daily extended power outages plaguing the country.
The best solution, environmentalists said, would be to replace the country’s aging coal-fired electricity plants with wind- and solar-energy solutions.
My argument was that renewables should be part of a multi-pronged approach to resolving South Africa’s energy crisis. They were not, however, going to be the solution. Instead, I argued, South Africa needed more coal-powered generation and the short-term regeneration of existing coal facilities while the country develops its renewables and natural gas sectors to provide long-term relief.
Why would I encourage South Africa to continue relying on “dirty coal?” Because I’m a pragmatist. South Africa has the resources, infrastructure, and supply chains in place to keep coal supplies flowing. The country’s renewable and natural gas industries definitely should be developed, but that’s going to take time.
Consider what’s happened since South Africa re-launched its renewable power purchase program in 2021. After remaining dormant for six years, the program held a bidding round for solar and wind projects, attracting more than 100 responses. But as of July 2023, only half of the 2,583 megawatts (MW) that were supposed to be generated as a result of the 2021 bidding round were expected to come online, according to South Africa’s government.
Of the six entities that won the 2021 bidding round, one — the Ikamva Consortium (led by London-headquartered independent power producer Globeleq and Mainstream Renewable Power of Ireland) — secured 12 of the 25 projects on offer based on extremely low tariff bids. Those projects fell through.
If we go back a bit further, to South Africa’s efforts to address rolling power outages in 2020, we see that 11 power projects selected in a fast-tracked auction (mostly solar, wind, battery storage, but also natural gas) were struggling to secure investment as of November 2023 because of rising interest rates and higher materials and labor costs since the COVID-19 pandemic.
My point is not that South Africa’s efforts to grow its renewable energy sectors are doomed. On the contrary: I’m confident that more solar and wind projects will come online. The project cancelations and delays are, however, a reminder that, as much as the world wants renewable energy to swoop in and save the day — in South Africa and other regions of our continent — relying on renewables alone simply isn’t realistic. It’s going to take an energy mix that includes fossil fuels like oil and gas — and even coal in South Africa’s case — to meet our needs.
Greater Capacity Is Coming but Will Take Time
The African Energy Chamber (AEC) has been covering the continent’s renewable energy capacity for the last several years in our “State of African Energy Outlook” reports. What they’ve consistently shown is a sector that holds promise but could only be described as tiny.
If you review our newly released 2024 Outlook, you’ll see that little has changed in that regard. It states that the 2023 renewables capacity in Africa is a mere 24 gigawatts (GW) — largely driven by onshore wind and solar capacity.
Not only that, but our report didn’t expect that figure to change much next year. It predicts relatively flat capacity levels before we see onshore wind, solar, and hydrogen capacity increase by 55% from 2025 to 2026.
After that increase, we’re expecting to see onshore wind capacity reach 59 GW, solar capacity increase to 65 GW, and hydrogen capacity grow up to 22.5 GW by 2030.
“Through the 2030s, the capacity from these three energy sources is estimated to see a gradual increase, and the cumulative YoY (year-over-year) share as well as the average share of the total capacity during the period is estimated to be north of 95%,” our report states. “This growth is expected to take the continent’s overall capacity to close to 290 GW by 2035 and further to almost 360 GW by 2040.”
Those totals are certainly higher than Africa’s current capacity, but even when they reach their estimated 2040 levels, they fall far below current renewable capacity in other regions of the world.
Asia’s current capacity, for example, totaled 1.63 terawatts (TW) by the end of 2022 — the equivalent of 1,630 GW or 1,630,000 megawatts (MW). I’m mentioning Asia because the International Renewable Energy Agency (IRENA) noted that, while countries around the globe increased their renewables capacity in 2022, almost half of the new capacity that year was added in Asia, mainly because of China’s 141 GW contribution to the continent’s capacity.
IRENA did report that renewables capacity grew by 2.7 GW in Africa in 2022 — but just compare that to Europe and North America, where capacity grew by 57.3 GW and 29.1 GW respectively.
Again, I’m not suggesting that Africa’s renewables sector doesn’t have a bright future. It does. It will continue growing. I’m simply saying that we can’t pretend it’s going to be able to meet the domestic energy needs of Africa’s huge — and rapidly growing — population on its own in the near future. Africa’s current population, more than 1.4 billion people, is expected to surge to more than 1.7 billion by 2030 and 2.5 billion by 2050.
And even more power will be required for African businesses, manufacturing plants, airports, hospitals, universities, and the many other entities that will be necessary to meet our population’s needs — especially as we strive to enjoy the same benefits of industrialization that other regions of the world benefit from.
Leading the Pack
It’s also worth noting that renewable capacity in Africa, as in all continents, is seeing more success in some countries than others. And there are many countries where renewables are virtually nonexistent.
As our report points out, Egypt is leading the way. When it comes to installed and planned solar, onshore wind, and hydrogen capacity, its total exceeds 130 GW. But the devil is in the details: More than three-quarters of that capacity is still in the concept phase.
The country’s goals are to be generating 42% of its electricity from renewable sources by 2035 and 60% by 2040 through private-sector projects.
Examples include the 1.8 GW Benban Solar Park, online since 2019; the state-owned Zafrana wind farm, completed in 2010 with a 545 MW capacity; and the 10 MW Siwa solar project, a UAE-supported project that powers about 6,000 homes in Siwa City and the surrounding area.
Coming in second among renewable energy “high-achievers” in Africa is Mauritania. It has 70 GW of capacity in projects, with most still in the concept phase.
Morocco, South Africa, and Djibouti follow, but again, most of their projects — a whopping 95% of them in Djibouti — are in the concept phase.
Natural Gas: A Logical Solution
With Africa’s renewable energy sector in the slow-but-steady growth mode, it only makes sense for the continent to use a readily available resource — our fossil fuels — to meet domestic needs during the next several decades.
Clean natural gas is a particularly good choice. It supports emission-reduction goals. It’s a proven power source without the intermittency problems associated with wind and solar energy. And it can be monetized throughout its value chain, contributing to economic growth.
That’s why we expect to see natural gas pave the way for Africa’s transition from fossil fuels to renewables. As our report notes, renewables are expected to make up as much as 75% of the continent’s energy mix by 2050. Logically, fossil fuel usage will decline along the way, but natural gas will be sticking around for a while.
As our report says, “Natural gas is expected to drive 30%, 20%, and 10% of the power generation in Africa over the years 2030, 2040, and 2050 respectively.”
While some may see these energy realities as “inconvenient truths,” I see them as good news. Renewables are on the way, even if they won’t be taking center stage in our continent as quickly as some would like. Meanwhile, fossil fuels — natural gas in particular — are more than capable of meeting Africa’s needs.
To download a complete copy of The African Energy Outlook 2024 report, visit https://energychamber.org/report/the-state-of-the-african-energy-2024-outlook-report.