Energy transition outlook: Africa
3 minute read
For Africa, the energy transition presents a unique challenge. In a continent where 42% of the population lack access to electricity and nearly 70% are without clean cooking fuels, how can economic development and better social wellbeing be balanced with climate objectives?
Such a huge challenge also represents an immense opportunity, with the continent’s GDP projected to be over two and a half times larger by mid-century, rising from US$3 trillion in 2022 to US$7.6 trillion in 2050. But can Africa both energise and decarbonise at the required pace?
Our energy transition outlook (ETO), part of our Energy Transition Service, maps three different routes through the global energy transition with increasing levels of ambition. And our regional updates delve into the detail at a country level. You can access a complimentary copy of the ETO executive summary by filling in the form at the top of this page. And read on for three highlights from the Africa outlook.
1. A clean energy pivot is needed to achieve Africa’s decarbonisation goals
In our base case scenario, primary energy demand in Africa increases by 1.2 times from current levels due to growing energy needs driven by GDP and population growth. Oil and gas demand surpasses the total primary energy demand with growth of 1.6 times and 1.4 times, respectively, raising the fossil fuel share from 57% to 59% by 2050.
In our net zero scenarios, Africa must rapidly shift away from fossil fuels. This shift is mainly achieved through electrifying various sectors with renewable sources. In the country pledges scenario, the fossil fuel share in primary energy drops to 47%, while in the net zero scenario it decreases to 27%.
2. Africa’s vast mineral reserves present clear energy transition opportunities
Africa is perfectly placed to meet surging global demand for energy transition metals, including cobalt, manganese, graphite, platinum and rare earths. African countries mainly export raw minerals, but some are embracing resource nationalism and aim to boost local processing and battery manufacturing. For example, the Democratic Republic of the Congo and Zambia have already signed an agreement with the US for integrated battery production.
Businesses are eyeing up access to African resources amid geopolitical tensions elsewhere. Tesla has turned to Mozambique to reduce its dependence on China for supplies of graphite, for example. Meanwhile, Chinese companies themselves have spent more than US$1 billion on lithium projects in Zimbabwe alone over the past two years.
The continent’s high renewable energy potential also makes it an attractive location for low-carbon hydrogen production, particularly given its proximity to Europe and the presence of existing gas pipelines.
Together, the explosion in demand for energy transition materials and low-carbon energy has the potential to stimulate significant economic growth in Africa.
3. Policy and regulation must set the scene for sustainable growth
Many African countries have announced net zero targets – most notably South Africa, Nigeria and Ethiopia. Policy and regulation will be vital to achieve these ambitious goals while also creating the environment for much-needed economic development.
In the short term, governments are moving to address concerns Africa could become a dumping ground for conventional fossil-fuelled vehicles as developed countries embrace electric vehicles (EVs). To address this, many countries have regulations in place; 28 restrict imports to vehicles that are less than eight years and meet Euro 3 or higher emissions standards, while around 18 have no age restrictions.
Around 20% of African countries have targets for universal access to electricity by 2030, with a further 45% aiming for universal access at some later date. Meanwhile, eight African nations are aiming for universal access to clean cooking fuel by 2030, while a further 23 countries have less ambitious targets.
To help fund Africa’s climate and development objectives, the Just Energy Transition Partnership (JETP) model has been established. South Africa signed the first agreement with a coalition of international partners in 2021, while Senegal announced its own JETP in 2023.
The full ETO report explores a range of key themes, including:
- Projected oil, gas and bioenergy demand in Africa
- Analysis of potential for low-carbon hydrogen production
- Considerations for companies and investors
- Country spotlights for key emitters Egypt, Nigeria, Mozambique, South Africa and Algeria