Africa's energy sector needs massive (renewable) investments

12 April 2023 3 min. read

With the urgent need to decarbonize our planet, clean technologies and renewable energy systems are more important than ever. Africa needs to invest far more in renewable energy to be on track with its energy ambitions, though a thorough transition is far more difficult for developing economies.

The energy security situation in Africa is relatively unstable. Around 600 million Africans have no access to electricity and another 180 million rely on wood or charcoal for cooking.

According to a report from professional services firm PwC, African countries will need to increase their renewable power generation from only 59 GW (gigawatts) to a staggering 2,354 GW by 2050 in order to be on par with world averages for basic access to electricity and to meet decarbonization commitments.

Africa's energy sector needs massive (renewable) investments

This is an incredible increase and will be remarkably challenging, but continent-wide collaboration and investment is possible and would simultaneously stimulate economic growth to create a vibrant energy sector, according to the PwC report.

As signatories to the Paris Climate Agreement, nearly all African countries have pledged to address climate change. The entire African continent contributes only 3% to 4% of global emissions, though the continent at the same time remains one of the most vulnerable to the impacts of climate change.

Going renewable

African countries are rich in high-quality renewable sources of energy. While hydropower, solar, and wind energy are currently the most exploited sources of green energy, there is great potential to further develop other sources like geothermal and green hydrogen.

With plentiful access to fossil fuels across the continent, Africa should also look towards optimizing its existing nonrenewable resources to advance the transition to a renewable energy infrastructure.

Africas funding requirements

Transitioning Africa’s power sector to carbon neutral and providing reasonable access to electricity will however come with a hefty price tag, approximately $2.6 trillion as per the report, which is roughly the current size of Africa’s gross domestic product.

Tackling the challenge

One major obstacle to solving energy poverty in Africa is persistent unserved energy, or shortcomings in the amount of generated energy that can be supplied in a given market, which often leads to rolling blackouts. The PwC report estimates that working to build the infrastructure for reliable and affordable access to energy could have created over 300,000 jobs in South Africa alone.

The report further found that Africa has great potential to optimize fossil fuel extraction, which could create more value to put towards the transition to sustainable development. The energy crisis in European has created renewed interest in importing coal, oil, and gas from Africa.

A number of African countries have created roadmaps for confronting climate change and initiating transformations in sustainability. Egypt, Morocco, Ghana, Nigeria, Sierra Leone, Uganda, and South Africa are among the countries that have put laws and policies in place to limit emissions and increase clean energy.

Despite these initiatives, more will need to be done to build the regulatory frameworks that will enable and incentivize the decarbonization of the energy sector and development of renewable technologies.