African Reserves

Transition from coal to renewable energy in Africa | White & Case srl

Blocking funding for gas power projects in Africa may seem like a sensible climate policy. But is it?

Although the generally accepted ultimate goal is to replace fossil fuels entirely, there are strong arguments to begin by replacing coal with natural gas, especially for baseload generating capacity.

Finding alternatives to fossil fuels is one of the most pressing environmental priorities of the 21st century. Despite national commitments to reduce greenhouse gas (GHG) emissions over the coming decades, some scientists predict that the world will remain on a warming trajectory of 3 to 4 degrees Celsius by the year 2100.1 The consequences would be disastrous. According to the United Nations Intergovernmental Panel on Climate Change, sea level rise would likely flood low-lying coastal areas, including cities; desertification would likely destroy agricultural production and render large temperate regions of the planet – including much of Africa – functionally uninhabitable; and extreme weather events, such as hurricanes and typhoons, could become more frequent and intense.2

As the world aims for a cleaner energy future, the right environmental policy might seem to be to refuse to fund any new gas-fired power plants, gas pipelines or gas-based industries in Africa.

But could this really hinder Africa’s development and its move towards renewable technologies?

Gas as a bridge between coal and renewable energies

Renewables currently account for about a quarter of new electricity generation globally, but they still lag behind new coal-fired capacity.3 Although the generally accepted ultimate goal is to replace fossil fuels entirely, there are strong arguments to begin by replacing coal with natural gas, especially for baseload generating capacity.

This is especially true in developing economies in Africa that need to increase their generation capacity and have to choose between coal and gas. Gas-fired generation emits GHGs, and investments in gas-fired generation capacity can divert or delay investments in renewable energy projects.

So, is the best path to net zero simply to ban new GHG-emitting generation capacity and focus exclusively on renewable sources instead?

Gas combustion generates less local pollutants (SOXNOPEX and particles) than coal and about half as much CO2 per unit of energy (see Figure 1). Thus, the political and economic conditions that allow accelerated retirement of coal-fired power plants and their replacement with gas-fired plants could still result in significant reductions in GHG emissions.

View full image: Figure 1. Natural gas generates approximately half the CO2 emissions per unit of energy than coal (PDF)

Although Africa is endowed with enormous potential for solar and wind power generation, the continent currently accounts for less than 1% of global solar power generation. In semi-arid rural areas of Southern Africa, solar photovoltaic power generation holds particular promise as a renewable energy source.

Yet solar and wind power depend on the sun shining and the wind blowing. African nations increasing their renewable capacity still face challenges in managing the intermittent availability of sun and wind. Additionally, many lack available storage technologies to materially augment these supplies without new investments in gas or other reliable back-up sources.

Africa’s rapid urbanization means that the greatest demand for electricity comes from cities, where space constraints can make it difficult to install new solar and wind installations. Finally, most national and regional transmission and distribution networks have been developed around central production nodes. Although these could be redeveloped over the course of a century to accommodate more local renewable energy installations, it would be difficult to implement them as a short or even medium term solution.

In Africa in particular, the quest for “net zero” emissions must reconcile development priorities

4%

of the world’s electricity is consumed by Africa, which is home to almost a fifth of the world’s population.

Source: The Economist

The energy transition in much of sub-Saharan Africa is less about switching to renewable energy and more about providing electricity where none currently exists. Over the past decade, more of the world’s population has had access to electricity than ever before, except in sub-Saharan Africa, where it has actually declined.5

Although Africa is home to nearly a fifth of the world’s population, it accounts for only 4% of global electricity consumption. While electricity is almost universal in North Africa, less than half of sub-Saharan Africans have access to electricity.6

Consequently, African policymakers face a difficult dilemma: closing Africa’s energy gap is crucial to the economic well-being of the continent and its people. Yet the impacts of climate change are likely to hit Africa more heavily than other regions of the world.

Like leaders in other emerging markets, African policymakers argue that since rich, industrialized countries have become prosperous from fossil fuel emissions, these countries should lead the way in reducing their GHG emissions to offset the impact of the developing world’s quest for economic growth and greater prosperity. In addition, these countries should provide the necessary technology transfers and financial support to help develop Africa’s clean production capacity.

With the exception of South Africa (and its fleet of coal-fired power plants), Africa’s contribution to GHG emissions has historically been negligible. As recently as 2019, the continent accounted for less than 4% of global GHG emissions.seven Although this may increase over time, it will most likely remain lower than Europe, North America and Asia-Pacific. Measured by CO2 emissions per capita, the difference between Africa’s contribution to climate change and that of other regions and countries is striking (see Figure 2)8.

Figure 2. Compared to other regions and countries, Africa's GHG emissions are modest

View the full image: Figure 2. Compared to other regions and countries, Africa’s GHG emissions are modest (PDF)

In Africa, South Africa is the largest emitter of GHGs (see Figure 3). When its new coal-fired power plants at Kusile and Medupi are finally fully operational, they will further increase this load.9 In addition, South Africa’s fleet of coal-fired power plants is aging, with all but three now over 30 years old (see Figure 4).

South African utility Eskom intends to shut down more than 20% of its current coal-fired generation capacity by 2030 and most of the rest by 2050,ten and replacing that capacity with renewable energy sources. However, the amount of reliable base load needed to support southern African economies that rely on Eskom for power could make gas an attractive option, at least as a transition technology if battery and hydrogen technologies do not become available on the scale required during this period.

Figure 3. In 2019, South Africa was the largest GHG emitter in Africa

View the full image: Figure 3. In 2019, South Africa was the largest emitter of GHGs in Africa (PDF)

Figure 4: Coal-fired power plants in South Africa are almost all over 30 years old

A wealth of potential

Africa’s gas reserves are underexplored, but proven gas reserves are expected to be sufficient to generate enough electricity to transform the continent.

Africa lacks the extensive transmission and distribution networks of Europe and North America, but is expanding its existing networks (see Figure 5).

To minimize Africa’s future GHG emissions, countries with access to gas must prioritize it over coal or oil – while simultaneously developing non-GHG emitting solutions – and expand the continent’s gas transmission network. . While Sub-Saharan African countries expect to have 60 million tonnes per annum (mt/yr) of LNG export capacity by 2025 and an additional 74 mt/yr by 2030,11 they also expect to increase their own consumption of natural gas through gas-to-electric projects.

Figure 5. Power lines (existing and planned) and natural gas reserves in Africa

View full image: Figure 5. Power lines (existing and planned) and natural gas reserves in Africa (PDF)

Conclusion

The path to limiting global warming requires stopping all GHG-emitting electricity production. This might be doable in the long run. Yet, while the major GHG-emitting countries in the developed world are slow to reduce their own emissions, it is unfair to expect African leaders to subordinate their own socio-economic development to the global need to eliminate GHGs.

In parts of Africa where both coal and gas are available, technology transfer and financing can be used as levers that encourage the use of gas rather than coal. Combined with the development of an Africa-wide electricity transmission and distribution network, as well as an aggressive expansion of renewable energy sources and other non-GHG emitting generation sources, this could reduce Africa’s future impact on climate change while enabling African economies to grow and transform the quality of life for their people.

1 https://www.nature.com/articles/d41586-020-01125-x
2 United Nations Intergovernmental Panel on Climate Change 2022 at https://www.ipcc.ch
3 The Role of Gas in Today’s Energy Transitions, IEA 2019 at https://www.iea.org/reports/the-role-of-gas-in-todays-energy-transitions
4 https://www.eia.gov/environment/emissions/co2_vol_mass.php
5 World Bank, 2021 at https://www.worldbank.org/en/news/press-release/2021/06/07/report-universal-access-to-sustainable-energy-will-remain-elusive-without- fight against inequalities
6 The Economist, 2019 at https://www.economist.com/graphic-detail/2019/11/13/more-than-half-of-sub-saharan-africans-lack-access-to-electricity
7 United Nations, 2021 at https://www.un.org/africarenewal/magazine/july-2021/cop26-climate-top-priorities-africa
8 Global Carbon Project at https://www.globalcarbonproject.org
9 https://www.gem.wiki/Kusile_Power_Station; https://www.gem.wiki/Medupi_Power_Station
10 https://renewablesnow.com/news/eskom-looking-to-renewables-as-s-africa-is-reducing-coal-power-751345/
11 S&P Global, 2021 at https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/020921-sub-saharan-africa-could-green-light-74-mil- mtyear-gnl-capacity-by-2030-acting

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