Until a few short years ago Angola, twice the size of France, would have relied on its oil reserves to provide most of the energy for its 34 million people. After all, the former Portuguese colony boasts one of the highest hydrocarbon deposits in all of sub-Saharan Africa.
But today Angola is showing the way for the rest of the region in the harnessing of solar energy, the region’s great hope in the renewable revolution. In 2022 alone, Angola installed nearly a gigawatt of new photovoltaic capacity in a 14 percent increase on the previous year. And although that still ranks the country far behind early starters like South Africa, which accounts for more than half of all of Africa’s solar energy, Angola’s rapid embrace of photovoltaic power is seen as highly symbolic. As early as 2025 the government expects to install 100 megawatts of solar capacity, a third of it coming from off the grid as it taps into average annual temperatures of between 16°C and 26°C.
Other countries are following suit, notably Ghana, Kenya and Rwanda. All are pursuing a target of achieving much of their energy from the sun by 2030 in what will be a historic and transformative transition in countries that have hitherto relied on fossil fuels and often erratic grids for their power. Although many African countries are late in seizing the potential of solar energy, they are catching up fast as they come to realise their unique ability to harness the sun.
To take the example of Rwanda, it is located in East Africa at approximately two degrees below the equator, a fortuitous position in terms of solar potential. Technically, its solar radiation intensity is roughly equal to five hours of peak sun a day, way ahead of many western nations.
If Africa can wake up to the potential of solar and other renewables, the prospects are impressive
As a region – and it is a giant one with many disparities in terms of solar potential, Africa’s potential in terms of solar radiation is 4.51 kWh/kWp a day, which puts it ahead of South and North America, the latter by some margin (see Fig 1). However, there is a lot of ground to make up. Until very recently, Africa lagged behind other regions in exploiting its solar potential, according to official sources like the World Bank’s Global Solar Atlas and the International Energy Agency. Vast though the region is, it claims just one percent of the world’s installed solar capacity.
This doesn’t tell the full picture though, because sub-Saharan Africa likes to do things in its own way and much of the new solar generation is off-grid, sometimes way off-grid, and thus escapes official measurement. Rooftop installations have been proliferating, for instance, in factories and homes.
But from a standing start, Africa has “a unique opportunity to provide affordable, reliable and sustainable electricity services to a large share of humanity where improved economic opportunities and quality of life are the most needed,” notes the World Bank.
There’s money on the table for the right projects. Mingling among the 40,000 attendees at last year’s COP27 in Cairo were representatives of the multilateral lenders, development banks and private-public finance who are ready to engage in the ‘blended financing’ – essentially multiple funding sources – that will make the transition to renewables happen. The World Bank is under pressure to take the lead on this.
The sums may be daunting – the total renewables budget for the region is estimated at $190bn a year between 2026 and 2030, with two thirds of that going into clean energy. However, that would still represent a fraction of the total global spend on the pursuit of net zero and the benefits are almost immeasurable.
And to put the budget into further perspective, IEA executive director Dr. Fatih Birol pointed out: “Bringing access to modern energy for all Africans calls for investment of $25bn per year – a sum equivalent to the cost of building just one liquefied natural gas terminal.”
New funding arrangements are under discussion including ‘concessional finance,’ a low-cost form of debt that encourages other lending, notably private capital originating from domestic financial markets. In other words, local lenders would have skin in the game and an interest in ensuring the money was properly spent. To ensure that, some governments will have to raise their game in the management of what lenders now call ‘foundational investments’ in the energy revolution. One overdue reform is in the fraught area of energy subsidies. As the price of oil and gas spikes in the wake of the war in Ukraine, the cost of subsidising households has risen in the region and some countries have doubled subsidies in what the IEA describes as “an untenable outcome for many countries facing debt distress.”
Simultaneously, numerous African leaders have mounted campaigns for compensation from the western world for chronic water shortages, extreme weather events ranging from floods to droughts and rising poverty that were triggered elsewhere. This is not in dispute. As Dr. Birol put it: “I find it profoundly unjust that Africa, the continent that has contributed the least to global warming, is the one bearing the brunt of the most severe climate impacts.”
Privately though, western diplomats say compensation won’t happen, at least not in the way that some African leaders want, and that other forms of financial support for investment in solar and renewables will be on the table instead. As the prestigious Oxford Institute for Energy Studies point out, developed countries are extremely reluctant to write what they fear will be a blank cheque. Another hindrance is that few countries – or more likely none – would admit to any liability for climate damage in Africa, which would put them on the hook for potentially unlimited claims.
Provided they see the results, international lenders are more than happy to take the plunge. After a slow start, some emerging nations have been deluged by concessional, leveraged and other forms of finance for solar projects, with some like the Maldives in the Indian Ocean attracting several times the required funds.
At first sight, the delivery of clean energy in any form into Africa is a huge task. Currently, reports the IEA, a staggering 600 million Africans – 43 percent of the entire population – lack access to electricity. To achieve universal access, 90 million people a year would have to be hooked up to the grid for the first time and no less than 130 million a year would have to be weaned off ‘dirty cooking’ that uses wood and other biomass fuels. By any standards this would require a monumental effort.
Rwanda is fairly typical of the region. In 2017 nearly 80 percent of households used firewood for cooking but, with a bit of luck, less than half will do so by 2024. This is the result of some complex financing under an initiative that is jointly funded by the Development Bank of Rwanda, the Energy Development Corporation and the World Bank’s Clean Cooking Fund.
If Africa can wake up to the potential of solar and other renewables, the prospects are impressive. By 2030, estimates the IEA, the four big renewables – solar, wind, hydropower and geothermal – would deliver more than 80 percent of new power generation. This would be vital for the most energy-deprived rural regions, where more than 80 percent have no access to the grid. In these areas the IEA sees mini-grids and mainly solar-powered standalone systems as the most viable.
“The global clean energy transition holds new promise for Africa’s economic and social development,” argues the IEA. And that view is gaining support. Twelve African countries, representing over 40 percent of the continent’s total CO2 emissions, have signed up to a net-zero goal by 2050 and nearly all African countries are pledged to the Paris Agreement. After all, universal access to affordable electricity is a vote winner.
Fossil fuels aren’t going away though, either as sources of domestic energy or export revenues. Vast reserves of natural gas, as much as 5,000 billion cubic metres, await approval for development in Africa. If the permits are signed, the fuel will be used to power new industries and to rescue battered economies, like that of Mozambique. One of the poorest countries in the world, Mozambique shipped off its first consignment of natural gas to Europe in November after waiting for three years for funds from abroad to help it recover from cyclone Idai that devastated large swathes of the country.
In an interview with Bloomberg Green in November, President Filipe Nyusi made no apologies, arguing that export revenues would pay for the greening of the economy. This is a familiar refrain in a situation distorted by the war in Ukraine. Other African nations such as oil-rich Algeria have signed deals to deliver gas to Europe. And LNG terminals are being developed or expanded in Congo, Mauritania and Senegal ahead of Europe’s determination to wean itself off Russian gas by the end of the decade. All this is happening alongside solar projects.
Historically, the presence of fossil fuels has been fraught for some African countries like oil-rich Nigeria. After decades of mismanagement, corruption and neglect, revenues from hydrocarbons are plummeting. The governor of the central bank, Godwin Emefiele, said last year: “The official foreign exchange receipts from crude oil sales into our official reserves have dried up steadily from above $3bn monthly in 2014 to absolute zero dollars today.”
One of the attractions of renewables and solar in particular is that they are politically as well as environmentally cleaner.
Source : World Finance