Shortly after assuming office, the new President of the African Development Bank, Akinwumi Adesina, challenged Africa to “develop its energy mix, based on what it has, with a regional approach and taking into account resource endowments.” In a new article in Climate Policy, we give a response to this challenge by reviewing the state of knowledge on the energy mix in Africa. It turns out that 2018 is an exciting time for such a review: recent modelling results show that Africa could rely almost completely on renewable energy in electricity production and still develop its economy rapidly.

The optimal energy mix in Africa will include several different energy sources. The reasons are that the regions of the continent have different endowments, that the best resource endowments are limited and that different energy sources are complementary. Until recently, model results expected that the best way to keep emissions low in Africa would be a mix based strongly on the use of biomass and carbon capture and storage (CCS), combined with renewable energy later in the century.

Africa is the region of the world with the best potential for renewable energy. This was not reflected in the model results as much as could be expected, because renewables are also linked with challenges. Among these challenges, the financing of the large up-front investments and the management of the variability stand out. The exponential growth in the use of renewable energy at the global level is now providing the experience that encouraged the recent switch in results towards renewables for Africa as a main source of electricity. By 2050 Africa could be the first world region to achieve nearly 100% renewables in electricity generation.

The cost of renewable energy has dropped so low that the cost ranges (the ranges reflect context dependent price differences) of renewables now overlap with cost ranges of fossil fuels. The price drop facilitates financing, but further options like the reduction of subsidies on fossil fuels and financial and political de-risking could be mobilised.

For addressing the variability of renewable energy, a first consideration is that at low penetration rates (up to 20%), variability is not much of a concern. First investments into renewables could thus be made without getting deeply involved in the technology of adjusting for variability. At higher penetration rates, various approaches can be employed to delay the use of expensive energy storage. The most important ones are (i) making conventional power plants more flexible, (ii) allowing for more pooling with transmission grid extension and (iii) adjusting demand to supply.

For the technical challenges, solutions are available. This puts the focus increasingly on the political economy of introducing renewable energy sources. Often, the obstacle is not in the type of energy source itself, but rather in the competition it offers to the powerful incumbent fossil fuel industry. By reviewing the respective literature, we show that the mechanisms, in South Africa and Nigeria in particular, are similar to each other and to a general pattern of incumbents fighting against new market entrants.

In the same speech as above, Mr. Adesina names “Africa’s rich energy sources” as solar energy, hydropower, wind power and geothermal energy. Emphasising the domestic potential that can be mobilised with renewable energy could be a way of giving a positive impulse to the political debate.

About the Author

Gregor Schwerhoff is a Postdoctoral researcher at the Mercator Research Institute on Global Commons and Climate Change (MCC).

Additional author to the CPJ article: Mouhamadou Sy