"The immediate, absolute priority for Africa and the international community is to bring modern and affordable energy to all Africans." -Fatih Birol, IEA Executive Director.
A new special report
by the International Energy Agency says the crippling spikes in energy prices underscore the need to accelerate the scale-up of cheaper and cleaner sources of energy.
The Africa Energy Outlook 2022
released today says Russia’s invasion of Ukraine has sent food, energy and other commodity prices soaring, increasing the strains on African economies already hard hit by the Covid-19 pandemic.
According to the report, the overlapping crises are affecting many parts of Africa’s energy systems, including reversing positive trends in improving access to modern energy, with 25 million more people in Africa living without electricity today compared with before the pandemic.
“Africa has had the raw end of the deal from the fossil fuel-based economy, receiving the smallest benefits and the biggest drawbacks, as underlined by the current energy crisis,” said Fatih Birol, the IEA Executive Director.
“The new global energy economy that is emerging offers a more hopeful future for Africa, with huge potential for solar and other renewables to power its development – and new industrial opportunities in critical minerals and green hydrogen,” said Birol in a statement.
He suggests that the immediate and absolute priority for Africa and the international community is to bring modern and affordable energy to all Africans.
The report shows the provision of modern and affordable energy to Africa can be achieved by the end of this decade through annual investment of $25 billion, the amount needed to build just one new Liquefied Natural Gas terminal a year.
“It is morally unacceptable that the ongoing injustice of energy poverty in Africa isn’t being resolved when it is so clearly well within our means to do so,” Dr Birol added.
The Africa Energy Outlook 2022 explores a Sustainable Africa Scenario in which all African energy-related development goals are achieved on time and in full. This includes universal access to modern energy services by 2030 and the full implementation of all African climate pledges. According to the report, achieving Africa’s energy and climate goals means more than doubling energy investment this decade.
This would take it over USD 190 billion each year from 2026 to 2030, with two-thirds going to clean energy.
“Multilateral development banks must take urgent action to increase financial flows to Africa for both developing its energy sector and adapting to climate change,” said Dr Birol.
The report finds that some countries, including Egypt, Ethiopia and Uganda, are being driven to halt or reduce subsidies, or reinstate fuel taxes due to growing financial burdens. Uganda's government has already stated explicitly ruled out any subsidies in dealing with the current crisis. Fuel prices are at an all-time high of ugx6,000 a litre of fuel. The country spends close to $2billion of fuel and (used) motor vehicle imports and spares a year. Worse still, it pays heavily in debt repayment for investments in clean energy projects - electricity generation - which it doesn't consume in full. A switch to clean/electric energy transportation in the capital city alone would drastically reduce on the fuel import bill and at the same time generate demand for the unused electricity, with revenue to help offset the debt repayments.
The report urges international support to play a role in the near term to manage prices, but better targeting of subsidies to the households most in need is essential. The report says achieving universal access to clean cooking fuels and technologies by 2030 in Africa requires shifting 130 million people away from dirty cooking fuels each year.
The report says almost half of Africans without access to electricity today live in the Democratic Republic of the Congo (DRC), Ethiopia, Nigeria, Tanzania and Uganda. In Uganda, only about a quarter of the population is on the natiobnal grid.
According to preliminary data, several countries, including Côte d'Ivoire, Ghana, Kenya, Rwanda and Senegal, have continued to reduce or stabilise the number of people without access, even if new connections were slowed by the pandemic.
On the other hand, the number of people without electricity access strongly accelerated in 2020 and 2021 in countries such as Chad, DRC, Mali and Uganda.