The good news is that the least cost-solution of securing reliable electricity for all Africans by 2040 has only very limited implications for total CO₂ emissions. In fact, despite the fact that its population will almost double by 2040 and its economy will expand, IEA projects that Africa’s contribution to global energy-related CO₂ emissions in the high-growth Africa scenario will increase from 2 to just 4.5% by 2040. The transition to clean cooking, on the other hand, will result in a reduction in overall emission of greenhouse gases.

The third major transformation in the Africa Case scenario, is the emergence of Africa "as a major player in natural gas markets as a producer, consumer and exporter". Gas production more than doubles to 2040, and the share of gas in Africa’s energy mix rises to around 24% in 2040. The continent led by Mozambique and Egypt become major exporters of natural gas to other parts of the world.

Less coal and hydro, more solar

To fulfill the Africa Case scenario, IEA estimates that the yearly investments in power supply would need to increase fourfold, to around $120 billion a year until 2040. Around half of that amount would be needed for networks, and half for generation, mostly solar PV and wind.

But is a fourfold increase in investments at all feasible, in view of the fact that energy supply investment in sub-Saharan Africa actually dropped by over 30% since 2011? The only bright spot the recent years, notes IEA, "has been the rising investment in solar photovoltaics (PV), which is set to surpass that in hydropower for the first time in 2019".

The answer is YES, says IEA, mobilizing
four times more finance for the low-carbon energy sector in Africa is possible.
But it will require reforms from both national governments and the large number
of national and multilateral development banks currently active in the green
energy investment space across the continent. For governments in Africa, this
means energy sector reform with a gradual phase-out of fuel subsidies, and
improved financial health and performance of the electricity utility companies.
As for the development banks like the World Bank, African Development Bank and
others, IEA advocates more focus on designing risk mitigation instruments that
can attract private capital to energy investments in the Sub-Saharan Africa.

If such reforms are implemented, IEA estimates – in the Africa Case scenario – that the deployment of solar PV, wind and other renewables like geothermal will accelerate from less than 5 GW today to more than 230 GW by 2040. The majority – over 70% – will come from solar PV. "Installed solar PV capacity increases across the entire region to reach about 160 GW in 2040, overtaking hydropower and gas to become the largest source in terms of installed capacity (and the third-largest in terms of generation output)", says IEA.

Hydropower will continue to play an important role in Africa, but climate change reinforces the need for many countries to reduce its dependence on hydropower in the total energy-mix. "In Zambia, for example, a severe drought in 2015 led to a drop in output at the largest hydropower plant, resulting in severe power blackouts," recalls IEA.

Coal- and oil-fired power also expected to grow

But despite the growth in renewables, gas and energy efficiency investments, IEA expects Africa to continue to consume a considerable amount of coal- and oil-fired power. Looking at projects expected to come online in Zimbabwe, Senegal, Nigeria and Mozambique, the organization projects coal-fired power to grow from 3 GW today to 17 GW in the higher-growth Africa Case scenario. Surprisingly, even oil-fired power continues to play a role in Africa, with Nigeria being the expected growth market. These projections are disturbing, and highlights the importance of working with the countries concerned to make low-carbon alternatives to coal and oil attractive and affordable.

What happens in Nigeria, expected to count 400 million people by 2050, is an important determinant to the continent’s future. The country has one of the lowest electricity consumptions per habitant in the world. This situation does not only affect the population’s living standards, but it is also one of the biggest challenges to economic development.

Nigeria has more than 12 GW of generating capacity from the grid, only about 4 GW is operational, and less than 3 GW is actually distributed to end-customers after transmission and distribution losses. This explains the proliferation of diesel generators in businesses, institutions and households, more than 20 million according to some estimates. IEA estimates that Nigeria in 2018 generated 18 TWh of power from about 9 GW of diesel-driven back-up generation. The numbers are even higher, says Nigeria’s Rural Electrification Agency. They estimate that 14 GW are served by small petrol and diesel gensets, representing a yearly cost to of $14 billion annually! If only half of these was replaced by renewable energy, CO₂ emissions would be reduced by about 10-15 million tons yearly, equivalent to almost a tenth of the total carbon emissions from Nigeria’s energy sector.

Fortunately, a number of national and international bodies present in Nigeria are currently active addressing the energy challenges addressed here. Already, private developers have the right to build, own and operate renewable energy plants below 1 MW without having to apply for a generation licence. Organizations like Germany’s development agency GIZ and the World Bank has teamed up with the Rural Electrification Agency to support and co-finance development of off-grid solutions like mini-grids and solar home systems. In parallel, the Nigerian Electricity Regulatory Commission (NERC) has embarked upon a regulatory reform, called sub-franchising, in which privately owned companies can be authorized to operate on behalf of an electric distribution utility service (DisCo) in a particular area within the DisCo's area of supply. As an example, some DisCos are currently discussing to partner with private solar PV developers for so-called captive generation for commercial and Industrial customers, letting the private developer build and operate solar energy for day-time consumption, with the DisCo providing the electricity evenings and nights.

But will these reforms go far and fast enough to unlock the private capital needed to address Nigeria’s formidable energy access and reliability gap? The answer is not yet, but they are undeniably a step in the right direction.