Africa’s policymakers are becoming increasingly engaged in the implementation of measures to tackle global warming. Ian Lewis reports
Climate change policy in most of Africa has, until recently, tended to focus on measures to ameliorate the impact of energy generation rather than make it less polluting. That’s not surprising for a continent of 54 countries that has to contend with some of the most severe impacts of global warming, while only producing around 4% of total global greenhouse gas emissions – and most of those in just a handful of nations.
But the days when African governments shrugged and said responsibility for implementing the clean energy transition lay with much larger polluters elsewhere in the world seem to be over. Ambitious clean energy policies are being adopted at regional and national level.
Expansion of renewable energy capacity is gathering momentum, thermal generation is switching from oil and coal to relatively clean natural gas as a feedstock, low-carbon transport is being adopted in some of the continent’s major cities and, equally important, a drive towards improved energy efficiency is becoming integrated into government policy.
These changes have been driven, in part, through engagement by African leaders in the UN-led global climate change process, as well as more joined-up thinking on the energy transition across the continent. All African countries are signatories to the Paris climate change agreement, which calls on every country to develop a sustainable energy policy. The UN’s Sustainable Development Goal 7 calls for a substantial rise in the share of renewable energy in the global energy mix, as part of efforts to ensure universal access to affordable, reliable and modern energy services.
Institutions, including the World Bank Group and the African Development Bank (AfDB), are prioritising renewables energy development and other measures to reduce carbon emissions.
The AfDB, for example, has played an important role in implementing projects in Africa under the $8bn Climate Investment Funds (CIF), the world’s largest multilateral climate financing instrument, established in 2008.
The bank says it has mobilised $866m of CIF investments, which has in turn leveraged an additional $12.6bn in co-financing from a range of official and private co-financiers. The main pillars of support provided by the bank include the Clean Technology Fund, the Forest Investment Program, the Pilot Program for Climate Resilience and the Scaling Up Renewable Energy Program.
The clean energy transition in Africa is not just being driven by the need to act on climate change. It also makes increasing sense both in terms of cost and energy security. Solar and wind energy costs have been tumbling. Foreign loans for costly large-scale thermal power stations were already becoming harder to win – and had a growing number of climate change-related strings attached – before the Covid-19 pandemic triggered a global economic slump.
Meanwhile, the wildly fluctuating oil price of recent months, triggered by uncertainty of future global energy demand, makes it increasingly hard for African countries to gauge what their energy import bill – or in some cases, hydrocarbons export revenues – will be. Generating the bulk of your power from domestic renewable energy resources is an attractive way to minimise those challenges for many African countries.
But the Covid-19 pandemic threatens to stop the energy transition in its tracks by triggering a switch in funding away from clean energy projects towards fighting the more immediate economic and social crisis, as well as disrupting supply chains.
The postponement until 2021 of the UN global climate change talks that were to have been held in Glasgow in November 2020 also risks slowing progress. The talks were seen as an opportunity to reinject momentum into climate change negotiations after the meeting held in Madrid in 2019 failed to build substantially on measures agreed to in the 2015 Paris agreement.
The UN-backed Africa Climate Week – originally scheduled for April in Kampala – and the work leading up to it, was also postponed, depriving governments and institutions on the continent of an opportunity to beef up policy frameworks.
The decision of President Donald Trump to withdraw the US – whose total carbon emissions are the world’s second largest after China – from the Paris agreement hasn’t helped either. The US is due to leave in November 2020, just after the next US presidential elections, but before President Trump’s current term in office formally ends.
Meanwhile, global climate change funds such as the CIF and the Green Climate Fund were already under pressure before the pandemic, as the US and other donors failed to deliver fully on pledged contributions.
The delicate state of global climate change policy as it affects Africa was summed up by Mohamed Adow, Director of the Nairobi-based think tank Powershift Africa.
Writing in April, he said: “Before the pandemic, countries were failing to deliver quick enough emissions reductions and support for the vulnerable. This delay [in the climate change talks], combined with the economic recovery investment being devised, gives leaders the opportunity to revise their climate plans. Economies in the rich north must not be kickstarted with dirty investment that will lead to climate suffering in the global south.”
The risk of the cheap fix
Africa’s largest energy consumers, such as South Africa and Egypt, could also be tempted to refocus on cheap – and domestically sourced – fossil fuels in the aftermath of the pandemic, though there is no indication so far that they will.
Egypt has just completed building a new wave of gas-fired generating capacity, based largely on its own newly discovered gas reserves, but has recently been putting more funding into renewables, particularly solar. South Africa remains overwhelmingly dependent on coal, but its pioneering independent power producer-driven programme to deliver solar power continues to make headway.
For other countries keen to boost generating capacity fast, renewables are often a more reliable and rapid way to meet energy policy goals than the largest thermal plants. Grid-scale solar and wind projects can be built incrementally in affordable and quick-to-build chunks, rather than requiring hundreds of millions of dollars of investment and taking years due to delays.
“It’s better to build a series of 50-100 MW projects that can be done quickly, rather than trying to do 1-2 GW projects, which can take more than five years to develop and possibly another two to three years to sort out all the other unforeseen problems that arise,” says Vangelis Kamaris, Chief Executive of power plant builder METKA West Africa.
Senegal has just added more than 150 MW to its generating capacity through the Parc Eolien Taiba N’Diaye wind project, the first power from which was fed into the grid in December 2019, just 10 months after the start of construction.
That project is notable because it shows that investment can be found for mid-scale renewables, even in relatively underdeveloped African power markets, given the right conditions. But it also highlights another aspect of African energy policy: that some hydrocarbons countries need to – or prefer to – export their oil and gas reserves at global market prices, rather than use them at home, where revenues would be lower.
For example, offshore gas production from the BP-led Greater Tortue/Ameyim project straddling the Senegal/Mauritania border is due to commence in 2023 (a year later than planned, due to the impact of the Covid-19 pandemic). But virtually all of that gas will be exported initially, with power generation from those local resources planned for later. In the meantime, Senegal’s renewables drive is already underway.
Hydrocarbons exports, of course, raise further issues for African policymakers seeking to adopt the clean energy path.
The impact of fossil fuel use on global warming is felt everywhere in the world, regardless of where it is consumed. So, while most African countries can rightly say they aren’t producing high levels of greenhouse gas emissions themselves, their oil and gas exports may be adding considerably to that total when burnt in European or Asian power stations or vehicles.
When oil and gas production is included, the African energy investment picture looks less rosy from a clean energy perspective. The International Energy Agency estimated that in 2018, around $100bn was invested in the energy sector in Africa, or about 5.5% of the global total. Of this, $70bn was invested in fossil fuels and $13bn in renewables, with another $13bn spent on electricity networks.
Such figures make some African leaders targets for accusations of hypocrisy, if they tout green polices, while still fuelling global warming. In February 2020, a group of 27 non-governmental organisations, including Oxfam and Oil Change International, issued a communiqué to coincide with an African Union summit in Addis Ababa, criticising slow progress in this area.
The NGOs called on African governments to “put an end to fossil fuel development; to manage the decline of existing production of oil, gas, and coal; and to rapidly initiate a transition to clean and safe renewable sources of energy that fully supports access to energy for those who currently lack it”.
They could get their wish, regardless of government intentions. Investment in future African oil and gas projects may become scarcer in an over-supplied world, which may already have reached the point where global oil demand peaks, due to the economic impact of the Covid-19 pandemic. BP Chief Executive Bernard Looney said in May that he wouldn’t write off the possibility that “peak oil” had been passed already.
At the same time, international institutions are adopting stricter rules on financing for fossil fuel projects or blocking it altogether. The World Bank Group stopped lending for coal-related projects in 2010 and has said it would stop lending for oil and gas projects at the end of 2019.
However, the AfDB continues to support fossil fuel-based energy projects on the grounds that they help promote greater energy access, while still “promoting, as much as possible, the best affordable clean and efficient technologies available”.
Those African countries that already have oil and gas export industries are unlikely to see the collapse of existing projects, even if revenues may be affected by low oil prices. However, Nigeria, Angola and the smaller existing producers on Africa’s western coast may find it increasingly hard to attract investment to the new projects or project expansions they need to maintain production at current levels as old fields mature.
The new wave of producers, such as Mozambique and Senegal, face delays in their first projects, due to effects of the pandemic, and question marks hang over future expansions.
For those countries, such as Tanzania, which have substantial offshore gas reserves, but have yet to reach agreement with international oil companies over how to exploit them, the window of opportunity to do so seems to be closing fast.
Some estimate that oil and gas reserves already discovered may be sufficient to supply demand for the rest of the oil era. While the equation may not be that simple, it hardly provides a propitious backdrop for risky “frontier” investments in countries without an established hydrocarbons industry, whose production may not be required by the time it comes on stream.
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