Realising Africa's potential at the 23rd World Energy Congress

Posted on 24 November 2016

africa-roundtableWith Africa’s rapidly growing population making ever increasing demands for greater energy access it is difficult to overestimate the scale of the challenge facing the continent. But it is also hard to match the sense of optimism and excitement that energy experts express about the opportunities to transform sub-Saharan Africa’s energy footprint in positive and sustainable ways.

In this context, with Africa having an abundant potential for both conventional and renewable energy in the form of wind, hydro, and solar what should be done to secure Africa’s Energy Future?

The World Energy Council dedicated the 4th day of the 23rd World Energy Congress to Africa. The main objective of the sessions on this day was to explore the critical drivers and innovations to secure a sustainable energy future for Africa.

Under the theme ‘Africa: Securing a Sustainable Energy Future’ two main sessions were held:

Empowering Africa: Realising the Potential

This Session focused on Africa’s huge energy resources potential and how regional and national efforts will be required to harness these potentials. Responding as a panellist during the session, the Commissioner for infrastructure and Energy stated that the amounts and range of energy resources on the continent present huge opportunities to develop the energy sector at all levels including national, regional and continental levels.

Africa has abundant and diverse energy resources from hydrocarbons to renewables. This wealth is unevenly distributed and is often underdeveloped. Promoting regional energy integration through interconnection projects must be part of the way forward to realise untapped potential.

Bonang Mohale, Chairman and Country General Manager, Shell Commercial, South Africa, referred to a report by international consultancy firm, McKinsey, that concluded Africa’s development path has been hampered by unrest in the Arabic-speaking north and the fall global oil prices: “Seven out of the ten fastest-growing economies in the world are on the continent. We are also experiencing a fast technological change.

H.E. Dr. Elham M.A. IBRAHIM, The Commissioner for the Africa Union and World Energy Council Vice Chair for Africa, also highlighted the need to continue addressing the barriers in the energy sector including financing, policies and institutional frameworks, technologies as well as markets creation. She also highlighted AUC’s efforts in ensuring the development of the African energy sector through the promotion of regional projects as well as collaborations with partners and Member States.

The final day of the World Energy Congress focus on Africa included a look at how to finance the energy transition. In the move towards developing more sustainable infrastructure for Africa, attracting the required capital remains challenging. The ongoing energy transition is shifting private funds to clean energies but traditional development banks and public funds are still needed to lead as early market shapers, take some risks and attract private capital.

 Mustapha Baba Shehuri Nigeria’s Minister of State for Power, Works and Housing, said: “It is obvious that with dwindling resources, African states cannot close the infrastructure investment gap.”

He continued that with the continent’s population explosion from more than 900 million in 2006 to over 1.2 billion in 2016, “There is an immediate need to make energy accessible to all, to create employment, empower people and allow investors to get back their returns.”

Energy Leaders’ Roundtable – Disruptive Business models: Reshaping Rural Opportunities

With two-thirds of Africans having no access to electricity, the session explored how the rise of innovative and disruptive business models for off-grid power solutions is reshaping rural development in Africa.

Many African’s live in rural areas unconnected to energy infrastructure. Therefore, finding ways to bring power outside the grid is an important focus of energy policy and a key business opportunity.

This session led by Commissioner Ibrahim focused on the opportunities available and types of business models that are applicable to rural electrification projects in Africa. The Commissioner for Infrastructure and Energy provided the Keynote Address at the Ministerial Roundtable, which was attended by African Energy Ministers and experts working in Africa.

The Commissioner highlighted the clear link between access to sustainable and modern energy services and poverty alleviation while also stating the various factors and challenges of providing rural energy access in Africa including affordability, accessibility and low levels of demand. The Commissioner also called for the adoption of innovation business models that are specific to rural localities in order to stimulate and accelerate sustainable energy businesses.

Innovations in renewable technology as well as mobile payment systems offer rural African households unprecedented opportunities to electrify.

Thomas Duveau, Head of Business Development, Mobisol, said: “Rural areas do not have access to electricity. So we’re developing solar panels. It is something decentralised, completely off grid, and it is enough to meet 100% of household needs. Five years ago people thought solar wasn’t serious but now it is a real solution and we have huge demand.”

Simon Bransfield-Garth, CEO, Azuri Technologies, agreed. “Technology is moving very rapidly and today we see that off-grid solar is often cheaper than connecting consumers to the grid. The number of people for whom it is cheaper to connect off-grid is increasing all the time.”

Bransfield-Garth also stressed the importance of giving the industry room to develop: “Governments are bad at innovation. When things become more clear then we can apply regulations.”

Mugo Kibati, Group CEO, Pan Africa Insurance, and Chairman, M-KOPA Solar and Lake Turkana Wind Power stressed: “Don’t tax too soon. Allow the industry to grow and mature. Once regulators and policymakers understand that technology and industry do not always develop in a linear fashion, there will be a fusion of demographics, technologies and finance.”

Other sessions held throughout the day included Redefining Africa’s Resources, Driving the vision for regional integration, Development finance to balance the energy Trilemma, as well as Africa’s renewables update: The reality of scaling up. The Council will be holding its annual Africa Indaba in Johannesburg in February 2017 to continue dialogue and explore solutions discussed at the 23rd Congress.