Are African countries heading for a carbon lock-in or leapfrogging to renewables?

By Galina Alova, Smith School of Enterprise and the Environment, University of Oxford

Non-hydro renewables are likely to account for less than 10% of Africa’s power generation by the end of this decade. My recent co-authored study predicts fossil fuels to continue to dominate the electricity mix in many African countries, and the continent as a whole.

Opportunity to power development with renewables

Africa is presented with an important opportunity to make a decisive leap to renewables this decade. The continent’s energy demand is projected to more than double in the coming years, as countries seek to industrialise and improve the development outcomes for their growing populations, including providing affordable power to close the energy access gap. At the same time, Africa – the land of sun and wind – possesses vast renewable energy resources.  

Against this backdrop, renewables have become increasingly more competitive in the past years, with their cost set to decline further compared to conventional fossil-fuel-based generation. The affordability of battery storage has also significantly improved, with lithium-ion battery packs hitting a record low in 2020.

The combination of these factors creates a unique momentum for African countries to power their economic development with clean energy, skipping the high-emission development stage – a prominent leapfrogging narrative in the energy-planning community. However, relying on a number of assumptions about the future, the extant energy scenarios vary substantially in their results, both in terms of the scale and composition of the electricity mix they project.

Need for empirical data-driven analysis on the future of the energy transition

What we aimed to do in our study is to offer an empirical data-driven assessment of where, vis-à-vis the potential futures, as projected by various energy-modelling scenarios, Africa’s electricity sector is realistically heading to. To this end, we built a machine-learning model, using a state-of-the-art algorithm for predictive analytics and a large dataset of commissioned, failed and planned power plants across 54 African countries.

The model enables us to estimate the success chances of currently planned power plants being successfully commissioned by 2030, based on their project design characteristics and country development indicators. We predict that 77% of the current capacity pipeline is successfully realised this decade. This highlights that the mere existence of a project in the pipeline does not necessarily imply its successful implementation – an important, yet often overlooked, area in energy research.

Low-carbon transition might not happen fast

The results of our empirical study suggest that, as things stand, a rapid transition of Africa’s electricity sector to non-hydro renewables this decade is unlikely. Although inter- and intra-regional differences do exist, many countries are at risk of locking their economies into a fossil-fuel-intensive development path. Non-hydro renewables are predicted to account for just over 17% of installed capacity (equivalent to nearly 10% of generation). While seeing a decline in their share, fossil fuels continue to account for over half of capacity.

We find that amongst the factors affecting power plant commissioning chances, technology is an important driver. Renewable energy projects have historically had significantly lower success rate than gas- and oil-fired power plants, with the exception of, more recently, solar projects. As a result, for clean energy to have a bigger role in powering Africa’s economic growth, besides planning significantly more renewable energy projects, their implementation chances need to be improved. 

Africa’s current and predicted 2030 electricity capacity mix by fuel type

Source: Alova, G. et al. (2021), A. A machine-learning approach to predicting Africa’s electricity mix based on planned power plants and their chances of success. Nat Energy 6, 158–166 (2021). https://doi.org/10.1038/s41560-020-00755-9
Note: The ‘Operating in 2019’ bar refers to the operating capacity, as of October 2019, when the data were retrieved, ‘To be retired’ is the capacity that in 2030 will be older than 50 years and under a conservative assumption will be retired by then, ‘Planned’ denotes the projects currently in the pipeline, ‘Predicted to fail’ is the planned capacity predicted not to be commissioned and ‘Capacity in 2030′ is the predicted overall capacity mix in 2030.

Aligning development co-operation with energy transition objectives

The development community can play a significant role here. Our findings point to a positive impact of development finance on project realisation chances. This is an important observation in the context of de-risking investments and mobilising additional private sector finance for low-carbon power generation, including the technologies that are yet to see a substantial increase in their uptake in Africa, like wind power for example. Africa-led solutions, such as the Quality Label by the Programme for Infrastructure Development in Africa (PIDA), could also contribute to improving the bankability and implementation of infrastructure projects, including in the power sector.

In view of this, development co-operation objectives need to be closely aligned with the climate change agenda, including the priorities for the global energy transition. As the world prepares for COP26 later this year in Glasgow and countries are updating their Nationally Determined Contributions, this is a good time to revisit how the development community can best support developing countries in unlocking their potential to decarbonise.