In its annual study on Africa, the International Energy Agency (IEA) describes two scenarios on the evolution of energy access by 2040. Christian de Perthuis outlines a third scenario based on a “Green New Deal”.

Inaugurated in fall 2017, the Zagtouli solar power plant, located in the outskirts of the capital of Burkina Faso, in Ouagadougou, supplies 5 to 6% of the country's annual electricity demand. Photo: © Erwan Rogard for AFD 2017
Inaugurated in fall 2017, the Zagtouli solar power plant, located in the outskirts of the capital of Burkina Faso, in Ouagadougou, supplies 5 to 6% of the country's annual electricity demand. Photo: © Erwan Rogard for AFD 2017

Sub-Saharan Africa (excluding South Africa) is the only region in the world where the majority of energy consumed still comes from traditional biomass. This generates huge health costs, mainly due to local pollution from cooking systems. Environmentally, this places increasing pressure on natural habitats, making regeneration increasingly difficult. Economically, this locks people into an average level of energy consumption that is around one-third of the consumption observed in all developing countries. It’s largely insufficient to lift the majority of the population out of poverty:

 

 

This year, the International Energy Agency (IEA) has paired its now-classic “International Energy Outlook” with a special study on Africa that takes a closer look at the continent’s energy transition. The two scenarios that it presents for 2040 reveal that more rapid implementation of energy policies could improve access to energy for the greatest number of people all while stimulating growth. But these scenarios would also increase the continent’s reliance on fossil fuels: by 2040, sub-Saharan Africa (excluding South Africa) is projected to bolster its position in the global natural gas market, becoming an oil importer to be reckoned with, and tripling or even quadrupling its energy-related CO2 emissions by 2040. Isn’t it time to consider a third scenario, that of an African “Green New Deal”?

 

Two scenarios founded on an upturn in investment

After a decade of accelerated growth in the 2000s, sub-Saharan Africa experienced a sharp economic downturn. With the end of the raw materials boom, a return to reality was required. The ingredients needed for endogenous growth are still not in place, particularly because of endemic weaknesses in investment.

As for energy production, investments have sharply declined over the past decade, particularly in the oil and gas sector. Power generation and electricity distribution investments have performed better, mainly thanks to the vitality of East African countries: Kenya, Rwanda, Namibia and Ethiopia. Though the overall volume of energy investments has drastically declined, their composition has shifted in the right direction, with more significant investments in renewables and power grids than fossil fuels:

 

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To anticipate the continent’s energy future by 2040, the IEA presents two scenarios, both based on an uptick in investments.

 

The “Stated Policies” scenario: insufficient basic access to energy

The so-called “Stated Policies” scenario assumes that governments will implement the policies they present. In this scenario, sub-Saharan Africa should increase its investments by 60%, with renewables and power grids as the main beneficiaries. But investments in fossil fuels would also increase, including coal, which is emerging in some countries such as Côte d’Ivoire, Kenya, Mozambique and Senegal, where it had not previously been produced or consumed.

According to IEA experts, the Stated Policies scenario would maintain 5% annual growth over the next two decades — a performance that had not been previously achieved over such a long period. The energy situation would improve significantly and should lead to an increase in per capita consumption by an average of around half a ton of oil equivalent in 2018.

However, progress in access to basic energy services remains insufficient to achieve the United Nations’ Sustainable Development Goals: by 2040, one-third of the population will still lack access to electricity and half will remain dependent on traditional biomass for cooking.

 

“Africa Case” scenario: the energy goal achieved

The “Africa Case” scenario differs from the previous one in its proactive nature: energy investments would almost triple from current levels, reaching some $140 billion per year. The share of investment in electricity would increase, both to expand renewable energy sources and to extend networks. These proactive investments would make it possible to achieve UN targets for energy access by 2030.

In terms of electricity, this scenario describes a total upheaval, with sub-Saharan Africa achieving universal access to electricity faster than India and China:

 

By 2040, just over 60% of the electricity used would come from renewable sources, with photovoltaics following closely behind hydropower as the main energy source.

As for fossil fuels, which would still provide a little less than 40% of power, the proportion of gas would considerably increase. Gas would also play a major role in improving cooking systems through policies to ensure a systematic switch from traditional biomass to gas (mainly LPG).

 

A third scenario: the African “Green New Deal”?

The two scenarios share a common feature: they both predict stronger investments in green energies, thereby significantly increasing the share of renewables in the energy mix. But since the continent’s energy needs are very high, the shift in the energy mix will not reduce the amount of fossil fuels used. The scenarios continue the notion of energy “stacking” that we examined in our book Le Tic-Tac de l’Horloge Climatique. The most direct consequence is that CO2 emissions from fossil fuels would triple or quadruple, depending on the aims of the energy policies:

 

 

 

But would it be possible to improve energy access and growth just as well, or even better, without increasing the region’s dependence on fossil fuels to such an extent? A strategy founded on avoiding fossil fuels would not require more capital. Rather, this capital would need to be allocated differently by refusing to exploit or use fossil fuels.

This “Green New Deal” would require a shift in investment strategies in three main areas:

  • Mobility policies should not rely on expanding the number of internal combustion vehicles in circulation
  • Improvements to cooking systems should be more varied, in particular by exploiting the untapped potential of biogas and agroforestry
  • Investments in the exploitation of natural gas should be kept to a minimum — even though this “transitional energy” is cleaner than oil or coal, it still emits CO2

The “Green New Deal” strategy may at first seem inappropriate for a continent that has been hit hard by global warming and still contributes marginally to energy-related CO2 emissions. But should green investment be the preserve of rich countries? In those countries, green investment must go hand-in-hand with massive disinvestment in fossil fuel-related infrastructure. The promises of a Green New Deal to relaunch growth are overstated since green investment will not expand the capital stock.

But in sub-Saharan Africa, there is still extensive room for development. The continent does not have important fossil fuel-related infrastructure to disinvest. Green investments would not substitute this infrastructure but would contribute to the accumulation of productive capital necessary for development, with significant economic benefits.

Contrary to popular belief, a Green New Deal would have a much stronger economic impact in Africa than in the old industrial countries.

 

 

 

The opinions expressed on this blog are those of the authors and do not necessarily reflect the official position of their institutions or of AFD.

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