July 23, 2024

Investment in renewable power sources key to ending Africa’s energy poverty – Rystad Energy

Oredola Adeola


Injection of new power supply generated through investment in the renewable energy sources will be a fundamental solution to reducing the high number of people without access to electricity in Africa, a new report by Rystad Energy, an energy data and consultancy firm has shown.


Rystad Energy made this known while presenting an analysis of African market developments in the 2023 report, on Thursday, at African Energy Chamber Paris Forum.



EnergyDay gathered that the ‘The State of African Energy 2023’ survey was produced by the African Energy Chamber with data and analysis from Rystad Energy.


Rystad Energy, the global market intelligence firm in the survey emphasised that investment in the power sector is key to unlocking the continent’s energy potential.



Per Magnus Nysveen, Rystad’s Senior Partner and Chief Analyst, in his remark on the report said that Africa remains vastly under-electrified compared to other regions.



He noted that Africa has 40 percent of global solar energy reserves, and that the continent has the opportunity to eradicate power poverty just as Asia has done in the past two decades.


According to him, in 2000 Asia was the most power-deprived region globally, with around 700 million people without power.



Bimbola Kolawole,  Rystad Energy’s  Vice President and Head of Business Development for Africa, in his presentation on the findings of the ‘The State of African Energy 2023’, revealed that solar, hydrogen, and onshore wind will be the driving forces in renewables investment in Africa in the 2030s and that between 2023 and 2035, Africa will contribute a fifth of global hydrogen generation.


The report, according to him, also confirmed that the injection of a new power supply from renewables investment will be key to tackling the high number of people without access to electricity.


The report showed that Egypt, Morocco, and Mauritania are expected to lead in the field of renewables.



Komolafe further noted that following the Ukraine invasion, Europe’s reliance on LNG imports has grown. He noted that African LNG producers, led by Nigeria, Egypt, and Algeria stand to benefit.


He observed that Asian financial institutions currently fund most fossil fuel projects in Africa, adding that European lenders will play a bigger role due to the continent’s demand for African gas.



He said, “Last year was a bumper year for the continent’s exploration sector, with the Venus, Graff, and La Rona discoveries all made offshore Namibia. These mega finds, along with South Africa’s large offshore gas discoveries, have driven increased operator interest in Southern Africa.”


Kolawole also highlighted the large number of frontier acreages in the MSGBC region and West Africa, as well as the East African coast, that could yield further discoveries.


He said, “Over $33 billion in upstream investment was expected for 2022 and estimated growth in upstream expenditure in Africa between 2023 and 2025 is around $15 billion.


“It is particularly noteworthy that, while majors are looking to decrease their oil and gas exposure in West Africa, independents are picking up the portfolios being divested,” Komolafe noted.