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© OECD/IEA 2014
Dan Dorner Senior Energy Analyst, IEA Madrid, 28 January 2016
© OECD/IEA 2014
Africa Energy Outlook – some context
n GDP is rising – rapidly in some cases – but a large share of a fast-‐growing popula@on s@ll lives in extreme poverty
n Sub-‐Saharan Africa accounts for around 13% of global popula@on, but only 4% of energy use
n Energy is vital to development prospects – poor electricity infrastructure is a key impediment to growth
n Large energy resource base has been exploited only in part for oil, gas and coal, and largely untouched in the case of renewables
n Domes@c energy reforms gaining speed, but two-‐thirds of energy investment since 2000 went to develop resources for export
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Rich in resources
Major oil and discoveries in sub-‐Saharan Africa in recent years;
Hydro
Wind Oil
Oil
Oil
Oil Gas
Gas
Oil
Coal
Gas
Fossil fuels
Solar
the region has vast untapped renewables poten<al, notably hydropower and solar
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In sub-‐Saharan Africa, 630 million people – two-‐thirds of the popula<on – live without electricity. Only a handful of countries have electrifica<on rates above 50%
Less than 50% More than 50%
Share of popula<on with access to electricity:
Rich in resources, but poor in supply
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Back-‐up generators supplement unreliable, insufficient grid-‐based supply
Electricity demand met by back-‐up generators in sub-‐Saharan Africa by sub-‐region, 2012
Back-‐up generators consume around 90 thousand barrels of oil per day to generate electricity, at an es<mated cost of over $5 billion
2 4 6 8 10 12
Southern
East
Central
Other West
Nigeria
TWh
Industry
Services
ResidenKal
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Energy demand by sub-‐region
Sub-‐Saharan Africa primary energy mix by sub-‐region, 2012
Nigeria and South Africa are sub-‐Saharan Africa’s largest energy demand centres, accoun<ng collec<vely for half of total demand
20%
40%
60%
80%
100%
Nigeria Other West
Central East Other Southern
South Africa
Other renewables Bioenergy Hydro Nuclear Gas Oil Coal
141 Mtoe 56 Mtoe 37 Mtoe 112 Mtoe 83 Mtoe 141 Mtoe
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Biomass remains at the centre of the sub-‐Saharan energy mix
Total primary energy demand in sub-‐Saharan Africa
Reliance on fuelwood and charcoal remains high, even as incomes grow; 650 million people s<ll cook with biomass in an inefficient, hazardous way in 2040
300 400 500 Mtoe
100 200
Nuclear
Gas
Modern renewables
Coal
Oil
Biomass
2012
AddiKonal demand in 2040
Mtoe
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Power to shape the future
Installed power genera@on capacity by fuel in sub-‐Saharan Africa
Renewables account for almost half the growth in overall power supply, but fossil fuels are prominent in some countries
Coal 45%
Gas, 14%
Oil, 17%
Nuclear, 2%
Hydro 22%
Other renewables 0%
2012 capacity: 90 GW
2040 capacity: 380 GW
Coal 22%
Gas 25%
Oil 7%
Hydro 24%
Solar 12%
Nuclear 2%
Bioenergy, wind geothermal 8%
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Different paths to power across the con@nent
The power mix by sub-‐region reflects local resource endowments; well-‐func<oning regional power pools help to unlock new projects, lower costs & improve reliability
100 200 300 400 500 600
2000 2020 2040
West
TWh
30
60
90
120
150
2000 2020 2040
Central
TWh
50 100 150 200 250 300
2000 2020 2040
East
TWh
Coal Oil Gas Nuclear
Hydro Solar PV
Other renewables
200
400
600
800
1 000
2000 2020 2040
Southern
TWh
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Important role for renewables beyond the grid
Technology mix for mini-‐grids and off grids in sub-‐Saharan Africa, 2040
Renewables – led by solar and hydro – account for two-‐thirds of the electricity supplied by mini-‐grid and off-‐grid systems
35%
47%
12% 4% 2%
Off -‐ grid: 12 TWh
32%
37%
20%
8% 3%
Oil Solar PV Hydro Wind Bioenergy
Mini -‐ grid: 26 TWh
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The most cost-‐effec@ve way to expand electrifica@on varies
Op@mal split by grid type in Nigeria, given expected expansion of transmission lines
In Nigeria, higher popula<on density and wider grid coverage favour on-‐grid supply; where grid extensions are not cost-‐effec<ve, mini-‐grids tend to be preferred
Source: IEA in collaboraKon with the KTH Royal InsKtute of Technology, division of Energy Systems Analysis.
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The most cost-‐effec@ve way to expand electrifica@on varies
Op@mal split by grid type in Ethiopia, given expected expansion of transmission lines
The overall popula<on density of Ethiopia is half that of Nigeria meaning that mini-‐ and, especially, off-‐grid solu<ons play a much more prominent role
Source: IEA in collaboraKon with the KTH Royal InsKtute of Technology, division of Energy Systems Analysis.
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A changing balance to oil produc@on
Oil produc@on in sub-‐Saharan Africa
The region remains a major global supplier, although the role of the two biggest producers (Nigeria and Angola) ebbs and flows
Other Angola Nigeria
Produc@on:
1
2
3
4
5
6
7
2000 2014 2020 2030 2040
mb/d
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A new global gas player
Increase in gas produc@on in selected countries & regions, 2013-‐2040
LNG export is the anchor for the east coast gas discoveries, but a major share of the increase in overall gas output goes to domes<c power genera<on and industry
50 100 150 200 250
North Africa
Australia
Russia
Sub-‐Saharan Africa
United States
bcm
Mozambique Nigeria Other Angola
Tanzania
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Investment has to come home
Fuels
Electricity
For export
For consump+on within sub-‐Saharan Africa:
In a reversal of current trends, 2 out of 3 future investment dollars produce energy for sub-‐Saharan consumers, but this is s<ll not enough to meet their needs in full
Average annual investment in sub-‐Saharan energy supply
20
40
60
80
100
120
2000-‐2013 2014-‐2040
Billion
dollars (2
013)
⅓
⅔ ⅓
⅔
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A large step towards universal access, but s@ll a long way to go
Access to electricity in sub-‐Saharan Africa
2012 2020 2025 2030 2035 2040
300
600
900
1 200
1 500
1 800 Million
Popula@on with electricity access
Popula@on without electricity access
Nearly one billion people gain access to electricity, but over 500 million remain without power in 2040 – primarily in rural communi<es
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Biomass con@nues to dominate energy demand for cooking
Primary fuel/technology used by household for cooking in sub-‐Saharan Africa in the New Policies Scenario
In urban areas, access to clean cooking facili<es is mainly by fuel switching, while in rural areas it is mainly via improved biomass cookstoves
Urban Electricity
LPG, Gas
Kerosene
TradiKonal stoves
Improved cookstoves
Other renewables
20% 40% 60% 80% 100%
Rural
West
Central
East
Southern 2012 2040
2012 2040
2012 2040
2012 2040
20% 40% 60% 80% 100%
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How could energy make the 21st century an African century?
n Energy could do more to act as an engine of inclusive economic and social development
n An African Century Case assesses the impact of faster movement in three key areas:
Ø An upgraded power sector; reducing power outages by half and achieving universal access in urban areas
Ø Deeper regional co-‐opera<on; expanding markets and unlocking a greater share of the con+nent’s hydropower poten+al
Ø Be`er management of resources and revenues; more efficiency and transparency in financing essen+al infrastructure
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100
200
300
400
500
600
700
Million pe
ople
Without access to electricity
Energy can build a path to prosperity
Outcomes in the African Century Case, 2040
By increasing the coverage and reliability of energy supply, the African Century Case unlocks an extra decade’s worth of growth in per-‐capita incomes by 2040
Main Scenario
African Century Case
1
2
3
4
5
Thou
sand
dollars (2
013, M
ER)
GDP per capita
Gigawac
s
Renewables-‐based power generaKon capacity
40
80
120
160
200
240
280
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Conclusions
n Energy is a cornerstone of sub-‐Saharan strategies for poverty reduc@on and economic growth
n Improvements in sector governance are needed to bring in new energy investors and kick-‐start development
n The shortest route to power is a combina@on of regional and na@onal level grid projects, and mini-‐off grid projects
n Renewables are central to the regions energy outlook, while more efficient and sustainable use of biomass will create a healthier domes@c energy balance
n Concerted ac@on to improve the func@oning of the energy sector is essen@al if the 21st century is to become an African century
© OECD/IEA 2014
Available to download for free at www.worldenergyoutlook.org
