Rome, 8th July 2020 – In the past ten years, only 2% of the renewable energy installed worldwide has Africa as its protagonist. The factors that led to this data are explained by the study Connecting the dots. Why only 2% of global RE in Africa?, developed by RES4Africa Foundation in collaboration with Enel Green Power and presented today during a digital event attended by 250 people connected from all over the world.
Five years after the adoption of the Sustainable Development Goals and with just ten years ahead to achieve the Agenda’s objectives, the strategic analysis shows how Africa is the region that has experienced the least development in the renewable energy sector worldwide in the last decade (Europe 22%, North America 11%, Latin America 6%, India 5%, China 41%, rest of the world 13%), despite being the continent with the greatest wealth and potential of resources.
The photograph that emerges from the study shows a continent characterised by sustained demographic and economic growth (since 2000: +0.5 billion people, GDP +1.6 trillion USD), particularly dynamic in terms of urbanisation (+ 4% per year of population residing in urban areas) and digitalisation (the population that uses the internet has grown from 5% in 2009 to 25% in 2017). However, this constant transformation is not matched by an increase in energy, necessary for productive activities: although 16% of the world population resides in Africa, the energy demand corresponds only to the 6%, with an even lower share (equal to 3%) if we talk about electricity. Moreover, this low energy consumption is mainly linked to residential activities: less than a quarter of the consumption is due to productive activities, mostly concentrated in South Africa and in the northern area of the continent.
Despite these figures, the study highlights the incredible (and unused) African potential in terms of clean energy. In fact, Africa boasts abundant renewable energy resources, hydroelectric, photovoltaic and wind energy, the exploitation of which is becoming increasingly cheaper over the years, mostly represented by bioenergy. This potential renewable energy capacity could generate up to 24,000 TWh of electricity each year, corresponding to 90% of the world’s electricity production in 2018 and over 26 times that currently generated by the continent.
RES4Africa and Enel Green Power analyse the main factors behind these missed opportunities, highlighting the limited government support and unsuitable regulations, the difficulty of exploiting the benefits of energy integration due to insufficient interconnections and infrastructures, and the need to put renewables at the centre of the economic and industrial development of African markets. Despite the growing global demand for energy and the enormous potential in the production of electricity from renewable energy sources, investments in renewables in Africa are still extremely limited due to market instability and a high level of risk perceived by investors due to the lack of guarantees and integrated de-risking systems.
“Africa’s transformation, characterised by a sustained economic and population growth, a fast-paced urbanisation and a generation of talents who is leading a neglected business revolution, requires energy and will require it even more in the next decades. While in the rest of the world, the growth of renewable energy has intensively increased, only 2% of renewables addition occurred in Africa in the last decade: we cannot settle with what has been achieved. Universal access to electricity will not be ensured if we won’t be able to accelerate the renewable energy transition”.
Antonio Cammisecra, CEO of Enel Green Power and President of the RES4Africa Foundation
Why is Morocco so successful? There was a clear voluntary strategy and targets set by the government to strengthen the national energy sector by 2030. Morocco planned large scale public-private programmes through a clear pipeline of RE projects that focussed on reducing the generation costs and the dependency on imported energy and fossil fuels.
Jan Pieter Cools Wildiers, Managing Director Morocco at Siemens Gamesa
In a continent accounting for almost 20% of the world’s population (and close to 70% of those without access to energy), but for less than 10% of the world’s GDP, renewables represent not just the opportunity to provide access to energy at scale, but a means for extraordinary sustainable economic progress. Enrique De Las Morenas, responsible of the Competitive Analysis, Market Studies and Strategic Analysis di Global Power Generation Unit in Enel.
Most of utilities cannot afford the investments in Sub-Saharan Africa: they are challenged by underpricing and operational inefficiencies. Not only are de-risking instruments necessary for the deployment of RE in Africa, but it also a combination of political willingness and technical assistance through all the phases of the projects is needed.
Matthieu Ledauphin, Competitor Intelligence Market Studies & Strategic Analysis Specialist at Enel Green Power
Morocco, Tunisia, Egypt and South Africa are successful countries in Africa for the use and deployment of renewable energy. All of them have a masterplan for RE deployment characterised by targets, milestones as well as favorable regulatory frameworks and de-risking instruments.
Silvia Piana, Head of Regulatory Affairs Africa, Asia & Oceania at Enel Green Power
How do we support governments in overcoming challenges with the grid? f we want to see more renewable energy projects being developed, we need to see more involvement from the private sector in the captive generation as well as a growing storage sector. This is one of the few factors that will determine the future of renewables in Africa.
Amith Singh, Co-Head Energy Finance at Nedbank
Renewables have the potentiality to be the engine of social and economic growth in Africa. They are now the cheaper sources of energy and could generate up to 24,000 TWh of electricity each year, corresponding to 90% of the world’s electricity production in 2018 and over 28 times of what is currently generated by the continent.
Luca Traini, Senior Business Development and Partnership Officer at RES4Africa Foundation
Africa is a continent with enormous energy and production potential. The priority of the governments and the international community must be to exploit and optimise its incredible renewable resources, in order to guarantee the full and sustainable development of the continent. RES4Africa is strongly committed in this sense with its renewAfrica, The Missing Link and Water-Energy-Food Nexus initiatives, together with many other local and international partners and stakeholders.
Roberto Vigotti, Secretary General of RES4Africa Foundation