4 Key Areas to Help Africa Achieve its Energy Potential

Africa is home to the fastest-growing energy market in the world, projected to grow at a 15% CAGR from 2023 to 2028. This growth is driven by abundant renewable resources, strategic geography, and innovation potential. Having been at the helm of the Africa region for the last four months and having had the opportunity to engage with our key customers as well as government officials in the region, the consensus is clear, there are 4 key areas we must work on to help Africa achieve its potential:

1. Maintaining a reliable power supply
2. Making energy greener
3. Embracing system complexity
4. Adopting digital solutions

These are not just buzzwords; let's delve into each point in greater detail.

1. Maintaining a reliable power supply. The need to minimize environmental impact must be balanced against the dire need to provide reliable energy access for a vast and rapidly growing population facing energy poverty. Here, we cannot deny the role of natural gas while continuing to embrace renewable energy. As a reliable, plentiful, valuable, and affordable energy source that has a far smaller climate footprint than its fossil fuel cousins, gas presents an ideal bridge in the transition to net zero. Moreover, it is widely viewed as the precursor to hydrogen, with associated technology and infrastructure ready to adapt to a green hydrogen future. Many countries have gas available, and it is therefore vital to take this resource into the equation when building sustainable energy systems.
2. Making energy greener. Currently, much of the continent is coal-dependent. About 70-80% of power generation in South Africa, for example, is provided by coal-fired power stations. If it were to switch immediately to gas, the country could reduce CO2 emissions by 40%. Comprehensive utilization of this resource would, therefore, massively limit emissions, form the foundation of energy systems that give people access to electricity, and build the base of industrial development. At the same time, renewable energy sources like solar, wind, and hydro are hugely promising in Africa due to their abundance. It is not all about renewables or gas, but a combination, which will be different for each country. Diversity of energy supply can also help to build resilience by mitigating overreliance on limited supply. Policymakers need to build transition maps that work for them, built on the resources available to them and that can be best used.
3. Embracing system complexity. The increasing adoption of renewable energy and the diversification of energy sources are contributing to the rise of system complexity — an issue that advocates for a green future in Africa are determined to address. Managing this will require a balanced approach, integrating technology, infrastructure, and strategic investments to build a sustainable energy future for Africa. Challenges range from managing the intermittency of renewable energy supply, to navigating the intricacies of load management in response to fluctuating daily energy demands, and the growing need for advanced metering infrastructure driven by decentralized generation and demand for detailed consumption data. Investment in grid infrastructure has lagged, growing by only 5% annually between 2019 and 2022, according to the International Energy Agency (IEA) Financing Clean Energy in Africa report. This investment is insufficient to expand and modernize grids to support the influx of renewables. Future grids need greater resilience and interconnectivity to serve as the backbone of new energy systems, especially for countries looking to exchange electricity with neighbors. In Nigeria, we are working with the Federal Government to support the Presidential Power Initiative, which aims to add 25GW of electricity and upgrade the national grid. Similar investments across other countries in Africa could enhance power access, drive economic growth, and improve millions of lives.
4. Adopting digital solutions. Optimizing performance and maximizing efficiency in today’s energy landscape is critical, and harnessing the power of digitalization is crucial to do so. Data-driven control systems, advanced software, and integration of artificial intelligence have the potential to enhance grid management and precision in predictability to improve load. We need to embrace AI. It is still in its infancy but is starting to be used in many of our systems and is likely to play a huge role in the future. Africa offers us an opportunity to start afresh, a laboratory for how we can conduct the energy transition from scattered systems into new, modern ones. AI will be at the forefront of this. It is a unique and compelling chance for the African market.

The original version of this article appeared in African Review of Business and Technology in July 2024.