Powering Africa: Natural gas must be part of the solution, alongside renewables

Africa has been at the center of global energy conversations powered by decarbonization and energy transition initiatives. The general idea is to leapfrog the continent towards renewable, sustainable and clean energy use; and as much as possible, eliminate carbon emissions from fossil fuel use by 2050, based on global ‘net-zero’ goals (UN, 2023). This trajectory seems straightforward. What continent is better suited to lead the global drive towards renewable energy use than Africa, with vast renewable energy potential; enough to possibly supply 40% of the world’s solar energy capacity by 2050 (International Energy Agency (IEA), 2021)? After all, 22 African countries already rely on renewable energy, like hydropower, as a major source of electricity generation. If Africa could somehow meet up with the projected required investment in renewables like solar energy, which currently has only 1% installed generation capacity (IEA, 2022), then the continent can expand renewable energy’s share in its energy mix; phase out fossil-fuel use; potentially solve its energy deficit problems by providing clean and affordable energy and mitigate the climate risks disproportionately impacting the continent. Why then, should natural gas remain part of Africa’s energy mix?

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A Case for Natural Gas?

In confronting the issues around natural gas versus renewable energy in Africa’s energy mix, what if we ask: ‘Why not?’ And for a number of reasons too. Firstly, the last decade has seen some of Africa's major natural gas reserve discoveries. According to the International Energy Agency (IEA), Africa accounted for 40% of global gas discoveries between 2010-2020; amounting to over 5,000 billion cubic meters (bcm) of natural gas resources as of 2022, with a potential of providing ‘an additional 90 bcm of gas a year by 2030’ (IEA, 2022). In recent times, these discoveries have been touted as a solution to Africa’s energy deficit. And it may not be all hype. The IEA notes that natural gas was the highest contributor to Africa’s electricity in 2022. And recent discoveries in countries like Nigeria, Mozambique and Senegal mean that there is potential for more.

Africa’s electricity generation mix (IEA, 2022)

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Secondly, Africa has critical energy needs, with a projected upward trend in the coming decades due to a rapidly growing population. Over 600 million Africans currently lack electricity access (AfDB, 2022), limiting economic growth and constraining access to a better quality of life for about 40% of the continent’s population.?Electricity has been identified as a core catalyst for industrialization and economic progress because power often has a multiplier effect on several sectors. As the continent positions itself to secure better development and economic outcomes, especially against the backdrop of projected decelerated growth rates and rising debt levels, a diverse energy mix which includes natural gas, may make more economic and social sense for many African countries, than exclusive reliance on renewables.

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Similarly, bridging the energy deficit gap entails huge financial investments from a continent with enormous infrastructural needs and limited resources to meet these needs. According to the PWC Africa Energy Review Report (2021), ‘’Africa needs to double its generation capacity by 2030 and grow it fivefold by 2050’’ to achieve full electrification. Based on IEA estimates, this requires an investment of about $190 billion annually between 2026 and 2030, two-thirds of which represents projected investments in renewables. This is especially as the continent currently lacks adequate infrastructure to generate and distribute electricity from renewable sources like solar and wind energy at scale. In fact, as of 2022, the continent only had 1% of solar generation capacity. Assuming the financial resources were available and deployed as outlined above, a focus on renewable energy generation capacity presents one key risk: intermittence. Solar and Wind, in particular, are subject to irregularity and interruption, based on natural factors beyond anyone’s control. In addition to providing access to some industrial by-products for petrochemical and fertilizer production, natural gas is an ideal fuel for industry because it is largely efficient and reliable, compared to weather/climate-dependent renewable sources. Interestingly, Africa bears the brunt of climate change as a result of carbon emissions, resulting in several effects including droughts and extreme weather conditions. This has impacted hydroelectricity generation in countries like Kenya and Namibia, where climate-induced droughts have necessitated action towards a diverse energy mix including geothermal and exploration of natural gas reserves.

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Natural gas can deliver electricity over long periods for high-energy industries. This has an impact on the capacity of African countries to build structures and power essential technologies for boosting climate resilience in Africa, where the eight least climate-resilient countries in the world are located, according to research by Henley & Partners Consultancy (2022). This suggests that focusing exclusively on renewables for electricity generation will not be enough for reducing the effects of climate change on the continent. Let’s keep in mind that Africa contributes less than 4% to global emission rates, which may be considered negligible, compared to 23% for China, 19% for the United States and 13% for the European Union (CDP Africa Report). However, at the COP 26 climate summit in 2021, 20 major economies (including Canada, the US and UK) and some development banks pledged to cut back funding for fossil fuel and gas projects on the continent, in favor of investments in renewable energy generation. Never mind that natural gas is one of the cleanest-burning hydrocarbons, emitting half as much carbon dioxide as coal and 30 percent less than oil; or that since 2005, the US increased natural gas consumption by 41% as the world’s top producer of natural gas (World Population Review, 2023).

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Africa in the Spotlight

A few months later, Western economies seemed to backtrack on this earlier position, brought on by the Ukraine conflict, resultant energy shortfalls and urgency to expand natural gas sources. And Africa seems to be at the center of this ‘scramble.’ In 2022, the German Chancellor held talks with President Sall of Senegal over securing a steady gas supply from the country. Poland’s President Andrzej Duda visited Senegal, C?te d'Ivoire and Nigeria to discuss similar concerns. In Mozambique, the EU stated plans to boost security assistance for the country’s Cabo Delgado gas project which has been the site of insurgent fighting, according to reports by Reuters (2022).

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These visits may indicate that Africa is in the spotlight. And many African governments consider this as an opportunity to maximize this situation for project expansion and, in the words of Senegal’s President, Macky Sall at the UN General Assembly in September 2022; ‘’to achieve universal access to electricity.‘’ There is only one problem. The fact that earlier COP 26 commitments quickly fell through when some of these countries had to meet urgent energy needs may suggest that ‘global positions’ in relation to power generation are in flux and highly dependent on the realities of developed countries, which many African countries depend on for infrastructural funding. Consequently, if decarbonization efforts intensify in the near future, given that EU countries launched the REPowerEU agenda (aimed at accelerating the development of renewables), many African countries may be left to deal with the public finance obligations if financing is withdrawn yet again. One may consider that the continent can position itself to maximize these interests while they last, and, as much as possible, accelerate electrification efforts. The ownership patterns of many of these current and potential gas projects may constrain these efforts. A 2022 report by BankTrack stated that the majority of African fossil fuel production, including natural gas, for the next 30 years are owned by ‘European, Asian and North American interests, with TotalEnergies, Eni, ExxonMobil and BP alone accounting for a third.’ This leaves only 33% under the control of African countries.

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While natural gas is an integral part of the African energy mix, with the potential to immensely contribute to closing the energy deficit gap, African countries must consider resilient ways to maximize and transform this potential into reality.

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Tidiani Jeff Tall is CEO of Lidera Green Power, a renewable energy independent power producer (IPP) based in Madagascar. He previously held transformational leadership roles at KONE (elevators & escalators), and Lafarge (building materials), after starting his career in debt capital markets at Morgan Stanley, and strategy consulting at Roland Berger. Jeff is a graduate of Ecole Polytechnique Paris and Institut Fran?ais du Pétrole (IFP School), as well as a participant in the first session of the Emerging Leaders Program at Harvard Kennedy School.