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On the sidelines of the Africa Energy Forum

Africa Renewable Energy Forum

What Are The Perspectives on Renewable Energies and Gas in Africa?

The Africa Renewable Energy Forum recently organized in Casablanca gave an opportunity for policy makers and professionals from the private and public sectors to share their experiences and discuss a variety of topics related to the sector, aiming at enhancing the  development of renewable energy projects across the continent.

The forum was organised alongside the Gas Options Summit in North and West Africa. Under the patronage of King Mohammed VI, this initiative of EnergyNet is a special opportunity for meetings and sharing between various public and private stakeholders, both national and international.  It is also the most active initiative in the energy field’s sectors of gas and renewable energies.

A Long and Difficult Transition

Indeed, the world of energy is subject to triple growth: a global economic growth including emerging countries, a growth in the world population that will increase from 7.1 billion individuals in 2013 to 8.3 billion in 2030 and 9 billion in 2050, and the growth of global energy demand, which is expected to increase by more than 40% by 2030. In this perspective, the world needs clean, safe, and accessible energy now more than ever. To achieve this, the global economy must make profound changes in an integrated energy and climate change policy – which is needed to transform the patterns of production and consumption, as well as to change the type of energy used.

According to Amina Benkhadra, General Director of the Moroccan Office of Hydrocarbons and Mines, “the transition to a coherent and sustainable energy system will be long and difficult”. In fact, according to the World Energy Outlook for 2035, the energy mix will still be dominated by fossil fuels, which will represent 75% against 85.5% in 2016. Oil is expected to fall from 31% to 28%, and coal will also decline – going from 29% in 2013 to 26% in 2035. Gas and clean energy, on the other hand, will increase from 21% to 24% by 2035. Low-carbon energies will also record a slightly higher increase, notably from 13% to 18% in the global energy mix.

A Willingness to Share Its Experience

In the context of sharing experience, Morocco chose to take the lead in 2009 by implementing an energy strategy through several actions: establishing a diversified and optimized energy mix, developing large-scale renewable energies (and solar energy), promoting energy efficiency, mobilizing fossil national resources, integrating into the African and Euro-Mediterranean regional energy system to enhance energy security and technology transfers, and using environmental preservation devices in all energy activities. This strategy is based on the concept of having an open energy mix, including all sources of energy (coal, gas and renewable energies: solar, wind, hydro), where the share is still given to renewable energies.

Morocco’s choice to invest heavily in renewable energies is definitely a strategic choice aimed at developing abundant resources and contributing to sustainable development. To this end, several projects have been launched, including solar and wind plans with a capacity of 2,000 MW each by 2020 and close to 12,845 MW by 2030. The introduction of natural gas is another essential component of this strategy; it aims to ensure balance and stability. To do this, the kingdom provides for a major project in Jorf Lasfar called Gas To Power. In the meantime, Mrs. Benkhadra has stated that “Morocco has a proven leadership to support the energy transition in Africa”.

Off-grid Renewables in Africa: What Are We Talking About?

The topic of off-grid renewables was one of the important issues discussed during the Africa Energy Forum. Although the electrification of Africa through renewable energy solutions is a hot topic and carries many hopes, it also carries many uncertainties.

Access to electricity is a huge challenge in Africa. For rural areas in particular, the electrification of Africa is a colossal project that will require investments and time. According to the International Energy Agency, more than 620 million people are currently without electricity, and many of them cannot be connected to a medium-term power grid. It is in this context that “off grid” solutions are developing, especially “solar home systems” (SHS). Solar home systems are light electrification solutions that are able to light up and power a few USB plugs using photovoltaic equipment. These systems are gaining momentum and receiving increased attention from specialized media, industry, and international institutions. The offer is technological, innovative, and accessible.

Solar Home Systems, or “solar kits”, are not new; in fact, they have been used for rural electrification in many countries since the 2000s. However, there has been a decline in the price of photovoltaic technologies since 2008, resulting in the emergence of new products. We are seeing SHS become increasingly technological, reliable, and ergonomic. Many startups, including some African businesses, are even inventing new models. Some benefits that this electrification brings to its users include: light for reading, access to homework, access to the internet and the news, access to social networks, the ability to work after sunset, and the ability to charge a phone. It can also help communities light their streets and the squares of their villages. It may seem trivial, but in a small village far from the city, darkness falls quite quickly; activity stops almost completely in the absence of urban lighting.

In recent years, the lower cost of solar technologies has greatly boosted the deployment of off-grid solutions in Africa; however, what is more needed now is government-provided facilities to encourage investments and projects targeted at extending off-grid solutions. Thanks to their technological and economic innovations, the SHS offer populations in Africa’s remote areas a concrete solution to one of their major problems. Nonetheless, it is important to remain attentive: these new models are not yet proven, and there are still many obstacles – such as business environments, electricity prices, financing, and quality – that must be overcome in order to reach maturity.

Everything remains to be demonstrated on the long term; some villages are true “cemeteries” for solar panels, collecting remnants of previous state-funded or donor-funded rural electrification programs. This reality should encourage us to exercise caution and perseverance to strengthen and enhance the robustness of the models. It is also important to keep in mind that these systems deliver limited power and do not meet the needs of income-generating activities, which require a more powerful and stable power supply (for example, the ability to power an engine or a refrigerator).

The national network or local networks (“mini grids”) are still the preferred solutions for development of economic activities. From there it is necessary to bring together various initiatives of electrification on a territory (national network, mini-grids, SHS, etc.) under the same strategic vision and adapted governance.

Despite truly innovative and exciting offers, we currently do not have enough perspective or knowledge to predict a future for SHS. In any case, their development is part of an even wider movement of innovation in Africa – one in which several technologies, trends, and sectors converge through outlets such as mobile internet, fintech, big data, and crowdfunding. This achievement certainly deserves attention.

Gas: An Enabler of Renewable Energy

The gas market is growing by 2% a year. In addition, the liquefied natural gas (LNG) market is increasing by 5%. With that being said, these are very attractive markets for Africa. According to a study by BP, gas consumption from 2015 to 2035 will increase by 77% in Asia-Pacific, 28% in North America, and 80% in Africa. In twenty years the continent will represent only 5.1% of global gas consumption – it is at 3.9% today.

Presented as a clean energy for electrification, especially with respect to coal, “conventional” natural gas – unlike shale gas, extracted by hydraulic fracturing – appears to be a favorable alternative for many electric companies and governments.

With appetizing trade prospects, the attitudes of oil companies towards gas has changed profoundly, especially since developing important gas projects also allows them to benefit from less volatile prices than oil.

While Algeria, Egypt, Angola, and Equatorial Guinea already have a great deal of experience in the sector of gas, others such as Senegal and Mauritania are new entrants. Every gas project is unique. Industrialists of the sector have already put themselves in position for battle, but in order for the African gas sector to take off and be an enabler of renewable energy, African states must understand the different gas economic models and the link with their own energy sector for investment guidance in suitable projects.

The British BP now has its ambition to become the world leader in the sector, mainly through its projects in Egypt and Mozambique. Even French Total – which has, until recently, rarely been focused on gas in Africa – announces its intention to develop a new gas and renewable energies division, established in mid-2016. The CEO of Major, Patrick Pouyanné, has already confirmed his intention to acquire the upstream activities of French Engie (LNG production and transport), which is mostly present in Algeria and Egypt, to strengthen the field considered crucial for the future of his group.

As for ENI, the oil and gas company is in the midst of a reorganization of its trading and engineering subsidiaries. This reorganization is aimed at switching from buying to selling gas, as a result of the company’s major Egyptian and Mozambican discoveries. Behind the majors of the sector, junior companies focusing mainly on gas have also emerged: British Victoria Oil & Gas – active in Cameroon, and SDX Energy – present in Morocco and Egypt.

Specialized subcontractors have logically positioned themselves in the niche as well. OneLNG, which is a subsidiary of both the oil subcontracting giant Schlumberger, and the Anglo-Norwegian gas specialist Golar, is active in the Fortuna project in Equatorial Guinea. This company, led by the French Pierre Raillard, hopes to install gas-producing liquefaction barges (FLNG) all over the continent.

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Jalal Bounouar is a Moroccan teacher, researcher and writer. Jalal has always been interested in journalism and writing since he was a student. He earned a Masters Degree in Applied Language Studies and Research with an MA thesis on the language of media and journalism. He has contributed to different writing projects for a variety of international magazines and news websites. Jalal writes about politics, trade, education, culture, sports and more.

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