Why only 2% of global RE power in Africa?

The incredible (and unused) African potential

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.

 

 

 

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