Demand for energy is growing rapidly in sub-Saharan Africa and will continue to do so in the years ahead – but despite the increased investment in the sector, the energy infrastructure remains a key constraint on further social and economic development.
Electricity losses in poorly maintained transmission and distribution networks average 18% across the region (excluding South Africa), which is more than double the world average. [See eg Engerati-What it takes to invest in geothermal energy in Kenya and its unique models] Electricity tariffs are, in many cases, among the highest in the world. The region also has the lowest level of access, by only 290 million out of 915 million people or fewer than one in every three.
Africa energy outlook
A new analysis of sub-Saharan Africa’s energy sector, “Africa Energy Outlook,” from the International Energy Agency (IEA) finds that the region has more than sufficient energy resources to meet its needs. The region has 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.
Based on its essentially business as usual (New Policies) scenario, based on the continuation of existing policies and measures, the IEA projects a rapidly expanding energy system to 2040. The economy quadruples in size, the population nearly doubles (to 1.75 billion) and energy demand grows by around 80%. To meet this demand, total power sector investment averages around $46 billion per year. Generation capacity quadruples to 385GW, with the power mix becoming more diverse, with coal (mainly South Africa) and hydropower (all regions), being joined by greater use of gas (Nigeria, Mozambique, Tanzania), solar (notably in South Africa and Nigeria) and geothermal (East Africa).
Increased investments in T&D
To match this expansion of generation capacity requires a similar step-change in T&D infrastructure. In this scenario, annual investments in T&D increase to about nine-times today’s level by 2040 and, in total, outpace those for new power generation capacity over the period. Investment is concentrated in expansion rather than replacement, and distribution networks account for two-thirds of the total T&D investment. The length of sub-Saharan transmission lines increase more than five-fold to reach 0.8 million km, while distribution lines increase more than three-fold to reach nearly 5 million km in 2040. These grid expansions are supplemented by mini- and off-grid systems in more remote areas.
National grids expand gradually across sub-Saharan Africa, supporting wider electricity access, improving reliability of supply and, in cases such as Mozambique, connecting elements of the sub-national infrastructure. Electricity trade within sub-regions grows (as the power pools support greater regional cooperation), as does trade across sub-regions. DR Congo, Ethiopia and Mozambique are the largest net exporters of electricity by 2040, each developing large hydropower projects for the purpose, while South Africa (net imports meet 5% of demand in 2040), Nigeria (the second-largest importer, after South Africa) and some other parts of Southern Africa are the main net importers. Expansion of cross-border transmission lines broadly follows the plans as outlined by the regional power pools and in the Programme for Infrastructure Development in Africa (PIDA), but are only partially implemented by 2040. However, the degree to which Central Africa is connected to other sub-regions is an important constraint in this scenario.
Going further, the study finds that three actions in the energy sector, if accompanied by more general governance reforms, could boost the sub-Saharan economy by 30% over the New Policies scenario in 2040, an extra decade’s worth of growth in per-capita incomes. These 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 resources and revenues, adopting robust and transparent processes that allow for more effective use of oil and gas revenues.
In this African Century case, the investment in T&D would increase from totals of US$311.8 billion in 2014-2030 and US$329.7 billion in 2031-2040 to US$391.8 billion and US$492.7 billion in these periods. These extra investments would be spread fairly evenly across the regions. However, Central Africa would be the biggest beneficiary in absolute terms, with investment increasing by almost two-thirds up to 2030 and almost 200% in the following decade. This would enable the region to become a hub for regional energy trade with a more than doubling of its hydropower capacity.
In this case, in addition to full access in urban areas in all countries of sub-Saharan Africa, the proportion of the rural population with access rises to two-thirds. Still around 300 million people would remain without access to electricity in sub-Saharan Africa, but this is a 40% reduction compared with the New Policies scenario.