African power industry: capacity will rise sharply, but not evenly
African Energy Live Data suggests a vibrant continental electricity supply industry is developing, but project-by-project analysis points to a more complex situation in which power plant construction is sluggish and hundreds of millions of Africans remain without sustainable energy
Analysis of the 5,300-plus operating, under-construction and planned generation plants recorded by CbI's African Energy Live Data shows that installed capacity on the continent will have increased by more than 50% between 2016 and 2022, should all announced commercial operations dates be met. Most of that growth will come from gas and liquid fuel-fired projects, but investment in renewable energy is increasing quickly.
It is of little surprise that Africa’s largest economies and most populous countries have the largest amount of power generation under construction. But with the exception of Ethiopia – which is developing the 6GW Grand Ethiopia Renaissance Dam and accounts for more than 80% of capacity being built in the region – East Africa has relatively few megawatts under construction, particularly in troubled areas such as Somalia and South Sudan. However, the region’s ambitious transmission plans point to considerable potential for power trading and, away from established grids, East Africa has proved the crucible in forging innovative off-grid solutions, as it has for other ‘transformative’ technologies such as mobile banking.
Despite significant gas and hydroelectric power (HEP) resources available in West Africa, of the 6,838MW under construction in the region, 4,102MW is in Nigeria. Gambia, Guinea-Bissau, Sierra Leone, Liberia and Burkina Faso are witnessing slow progress and have seen little new capacity come online in the past few years.
South Africa and Angola account for 92% of new generation being built in Southern Africa. In North Africa, Egypt and Algeria also account for 92% of the megawatts under construction, although Morocco and Tunisia also have major renewable energy and thermal construction projects.
Almost half of the under-construction power generation is located in North Africa (18.5GW in Egypt and 11.4GW in Algeria). West, East and Southern Africa have more modest levels of new capacity being built, while only 814MW is recorded as under construction in Central Africa.
Email Nick Carn for a pdf of graphics illustrating the data in this article
Tumbling prices for solar and wind technologies, coupled with enthusiastic support from programmes such as the World Bank Group’s Scaling Solar and any number of bilateral initiatives from renewable energy enthusiasts such as Germany, have contributed to ever more economies turning to renewable energy solutions. Should the pipeline recorded by Live Data be realised, the share of renewables in the energy mix across Africa will grow from 21% by end-2018 to 25% in 2022.
Broken down regionally, the share of renewable energy (which includes HEP and pumped storage) in Central Africa will increase from 64.4% to 68.8%, in East Africa from 59% to 65%, in Southern Africa from 25.5% to 28.1% and in West Africa from 20.4% to 25.9%. Renewable energy as a share of the gas-dependent North African electricity supply industries will increase only moderately, from 8.7% in 2018 to 10.2% in 2022.
African Energy Live Data suggests that a potentially vibrant continental electricity supply industry is developing. However, project-by-project analysis points to a more complex situation in which all too many independent power projects (IPPs) and other schemes fail to leave the drawing board as issues such as lack of cost-reflective tariffs or spotty governance complicate otherwise worthwhile projects. The sort of IPPs, merchant power and other commercially viable schemes that have become the norm in large parts of Asia, Latin America and emerging Europe remain the exception in state-dominated African electricity supply industries.
The situation is slowly improving, with substantial efforts to tackle governance shortfalls and other chronic weaknesses. This is reflected in the ever more expansive support for reform and model projects by the World Bank Group African Development Bank and other multilaterals, and bilateral initiatives such as the US’ Power Africa – whose deployment of transaction advisers in markets with huge potential but often laggardly administrations provides an illuminating example of what can be done.
All involved say the private sector needs to be more involved. To achieve this will require billions of dollars – and even then, many national grids cannot be expected to reach large swathes of rural (and even peri-urban) populations for decades – cynics say if at all. It is for this reason that off-grid initiatives have flourished, and can be expected to draw in more serious investment still, as private enterprise – from the smallest community initiatives to big international private equity investors – brings electricity to communities and businesses that state utilities have failed to serve.
A question of access
It is against this background that the global campaign to provide vulnerable and marginalised communities with access to sustainable and affordable cleaner energy has gained considerable momentum in the past decade. The Africa-EU Energy Partnership (AEEP)’s ‘political target’ of giving electricity access to 100m more Africans by 2020, set in 2010, was exceeded by mid-decade. The United Nations’ Sustainable Energy for All (SEforAll) initiative should achieve its target of pulling 1bn people worldwide out of energy poverty by 2030; more than 500m of these people live in sub-Saharan Africa (SSA).
The targets have piled up as initiatives have proliferated in the last decade, led by the UN’s Sustainable Development Goals (SDGs), established in September 2015, which commit the global community to “ensure access to affordable, reliable, sustainable and modern energy” by 2030. But for all the progress expected towards meeting this target, the end result is likely to remain elusive, both in terms of providing secure grid and off-grid (distributed) electricity and in giving access to clean fuels and technologies for cooking across SSA (access to electricity is close to universal in most of North Africa).
Demographics, as much as the mobilisation of finance and application of appropriate technologies, is a critical variable in making these calculations: SEforAll data show an estimated nearly 97m more Africans gained access in 2010-14 alone, but during that period the continent’s population increased by more than 110m.
The good news is that services are improving across SSA, in terms of grid connections, volumes of electricity generated and the increased application of affordable renewable energy and distributed technologies. Countries that have made strong efforts to increase access include Côte d’Ivoire, Ethiopia, Ghana, Kenya, Sudan and Tanzania.
In a fast-changing environment, the application of off-grid and mini-grid systems is accelerating, complementing the electrification efforts of established national grids in an increasing number of SSA countries. Underpinned by digital-age business models, this trend can only be expected to continue.
NOTE: Data in this article is presented for public use, providing the figures are attributed to African Energy Live Data.
This article is authorised for republication with attribution to African Energy Live Data
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