©"OECD/IEA"2014""

Dan"Dorner"Senior"Energy"Analyst,"IEA"Madrid,"28"January"2016"

©"OECD/IEA"2014""

Africa'Energy'Outlook'–'some'context'

!  GDP'is'rising'–'rapidly'in'some'cases'–'but'a'large'share'of'a'fast>growing'popula@on's@ll'lives'in'extreme'poverty'

!  Sub>Saharan'Africa'accounts'for'around'13%'of'global'popula@on,'but'only'4%'of'energy'use'

!  Energy'is'vital'to'development'prospects'–'poor'electricity'infrastructure'is'a'key'impediment'to'growth'

!  Large'energy'resource'base'has'been'exploited'only'in'part'for'oil,'gas'and'coal,'and'largely'untouched'in'the'case'of'renewables'

!  Domes@c'energy'reforms'gaining'speed,'but'two>thirds'of'energy'investment'since'2000'went'to'develop'resources'for'export'

©"OECD/IEA"2014""

Rich'in'resources'

Major&oil&and&discoveries&in&sub1Saharan&Africa&in&recent&years;&&

&

Hydro'

Wind'Oil'

Oil'

Oil'

Oil'Gas'

Gas'

Oil'

Coal'

Gas'

Fossil'fuels'

Solar'

&

the&region&has&vast&untapped&renewables&poten<al,&notably&hydropower&and&solar&&

&

&

©"OECD/IEA"2014""

In&sub1Saharan&Africa,&630&million&people&–&two1thirds&of&the&popula<on&–&live&

without&electricity.&Only&a&handful&of&countries&have&electrifica<on&rates&above&50%&

&

Less"than"50% More"than"50%

Share&of&popula<on&with access&to&electricity:

Rich'in'resources,'but'poor'in'supply'

©"OECD/IEA"2014""

Back>up'generators'supplement'unreliable,'insufficient'grid>based'supply'

Electricity'demand'met'by'back>up'generators'in'sub>Saharan'Africa'by'sub>region,'2012'

Back1up&generators&consume&around&90&thousand&barrels&of&oil&per&day&

to&generate&electricity,&at&an&es<mated&cost&of&over&$5&billion&

2" 4" 6" 8" 10" 12"

Southern"

East"

Central"

Other"West"

Nigeria"

TWh"

Industry"

Services"

ResidenKal"

©"OECD/IEA"2014""

Energy'demand'by'sub>region'

Sub>Saharan'Africa'primary'energy'mix'by'sub>region,'2012'

Nigeria&and&South&Africa&are&sub1Saharan&Africa’s&largest&energy&demand&centres,&

accoun<ng&collec<vely&for&half&of&total&demand&

20%"

40%"

60%"

80%"

100%"

Nigeria" Other"West"

Central" East" Other"Southern"

South"Africa"

Other"renewables"Bioenergy"Hydro"Nuclear"Gas"Oil"Coal"

141"Mtoe" 56"Mtoe" 37"Mtoe" 112"Mtoe" 83"Mtoe" 141"Mtoe"

©"OECD/IEA"2014""

Biomass'remains'at'the'centre'of'the'sub>Saharan'energy'mix'

Total'primary'energy'demand'in'sub>Saharan'Africa'

Reliance&on&fuelwood&and&charcoal&remains&high,&even&as&incomes&grow;&&

650&million&people&s<ll&cook&with&biomass&in&an&inefficient,&hazardous&way&in&2040&

300" 400" 500"Mtoe"

100" 200"

Nuclear"

Gas"

Modern"renewables"

Coal"

Oil"

Biomass"

2012"

AddiKonal""demand"in"2040"

Mtoe"

©"OECD/IEA"2014""

Power'to'shape'the'future'

Installed'power'genera@on'capacity'by'fuel'in'sub>Saharan'Africa'

Renewables&account&for&almost&half&the&growth&in&overall&power&supply,&&

but&fossil&fuels&are&prominent&in&some&countries&

Coal"45%"

Gas,"14%"

Oil,"17%"

Nuclear,"2%"

Hydro"22%"

Other"renewables"0%"

2012'capacity:'90'GW"

2040'capacity:'380'GW"

Coal"22%"

Gas"25%"

Oil"7%"

Hydro"24%"

Solar"12%"

Nuclear"2%"

Bioenergy,"wind"geothermal"8%"

©"OECD/IEA"2014""

Different'paths'to'power''across'the'con@nent''

The&power&mix&by&sub1region&reflects&local&resource&endowments;&well1func<oning&

regional&power&pools&help&to&unlock&new&projects,&lower&costs&&&improve&reliability&

100"

200"

300"

400"

500"

600"

2000" 2020" 2040"

West"

TWh"

30"

60"

90"

120"

150"

2000" 2020" 2040"

Central"

TWh"

50"

100"

150"

200"

250"

300"

2000" 2020" 2040"

East"

TWh"

Coal Oil Gas Nuclear

Hydro Solar"PV

Other"renewables

"200"

"400"

"600"

"800"

1"000"

2000" 2020" 2040"

Southern"

TWh"

©"OECD/IEA"2014""

Important'role'for'renewables''beyond'the'grid'

Technology'mix'for'mini>grids'and'off'grids'in'sub>Saharan'Africa,'2040'

Renewables&–&led&by&solar&and&hydro&–&account&for&two1thirds&of&the&&

electricity&supplied&by&mini1grid&and&off1grid&systems&

35%"

47%"

12%"4%"2%"

Off">"grid:'12'TWh"

32%"

37%"

20%"

8%"3%"

Oil"

Solar"PV"

Hydro"

Wind"

Bioenergy"

Mini">"grid:'26'TWh"

©"OECD/IEA"2014""

The'most'cost>effec@ve'way'to'expand'electrifica@on'varies'

Op@mal'split'by'grid'type'in'Nigeria,'given'expected'expansion'of'transmission'lines''

In&Nigeria,&higher&popula<on&density&and&wider&grid&coverage&favour&on1grid&supply;&

where&grid&extensions&are&not&cost1effec<ve,&mini1grids&tend&to&be&preferred&

Source:"IEA"in"collaboraKon"with"the"KTH"Royal"InsKtute"of"Technology,"division"of"Energy"Systems"Analysis."

©"OECD/IEA"2014""

The'most'cost>effec@ve'way'to'expand'electrifica@on'varies'

Op@mal'split'by'grid'type'in'Ethiopia,'given'expected'expansion'of'transmission'lines'

The&overall&popula<on&density&of&Ethiopia&is&half&that&of&Nigeria&meaning&that&mini1&

and,&especially,&off1grid&solu<ons&play&a&much&more&prominent&role&

Source:"IEA"in"collaboraKon"with"the"KTH"Royal"InsKtute"of"Technology,"division"of"Energy"Systems"Analysis."

©"OECD/IEA"2014""

A'changing'balance'to'oil'produc@on'

Oil'produc@on'in'sub>Saharan'Africa'

The&region&remains&a&major&global&supplier,&although&the&role&of&the&&

two&biggest&producers&(Nigeria&and&Angola)&ebbs&and&flows&

Other"

Angola"

Nigeria"

Produc@on:'

1"

2"

3"

4"

5"

6"

7"

2000" 2014" 2020" 2030" 2040"

mb/d"

©"OECD/IEA"2014""

A'new'global'gas'player'

Increase'in'gas'produc@on'in'selected'countries'&'regions,'2013>2040''

LNG&export&is&the&anchor&for&the&east&coast&gas&discoveries,&but&a&major&share&of&the&

increase&in&overall&gas&output&goes&to&domes<c&power&genera<on&and&industry&

50" 100" 150" 200" 250"

North"Africa"

Australia"

Russia"

Sub[Saharan"Africa"

United"States"

bcm"

Mozambique' Nigeria' Other'Angola'

Tanzania'

©"OECD/IEA"2014""

Investment'has'to'come'home'

Fuels"

Electricity"

For"export"

For$consump+on$within$sub1Saharan$Africa:$

In&a&reversal&of&current&trends,&2&out&of&3&future&investment&dollars&produce&energy&

for&sub1Saharan&consumers,&but&this&is&s<ll&not&enough&to&meet&their&needs&in&full&

Average'annual'investment'in'sub>Saharan'energy'supply'

20"

40"

60"

80"

100"

120"

2000[2013" 2014[2040"

Billion

"dollars"(2

013)"

⅓'

⅔' ⅓'

⅔'

©"OECD/IEA"2014""

A'large'step'towards'universal''access,'but's@ll'a'long'way'to'go'

Access'to'electricity'in'sub>Saharan'Africa'

2012" 2020" 2025" 2030" 2035" 2040"

"300"

"600"

"900"

1"200"

1"500"

1"800"Million"

Popula@on'with'electricity'access'

Popula@on'without'electricity'access'

Nearly&one&billion&people&gain&access&to&electricity,&but&over&500&million&remain&

without&power&in&2040&–&primarily&in&rural&communi<es&

©"OECD/IEA"2014""

Biomass'con@nues'to'dominate'energy'demand'for'cooking'

Primary'fuel/technology'used'by'household'for'cooking'in'sub>Saharan'Africa'in'the'New'Policies'Scenario'

In&urban&areas,&access&to&clean&cooking&facili<es&is&mainly&by&fuel&switching,&&

while&in&rural&areas&it&is&mainly&via&improved&biomass&cookstoves&

Urban"Electricity"

LPG,"Gas"

Kerosene"

TradiKonal"stoves"

Improved"cookstoves"

Other"renewables"

20%" 40%" 60%" 80%"100%"

Rural"

West"

Central"

East"

Southern"2012"2040"

2012"2040"

2012"2040"

2012"2040"

20%" 40%" 60%" 80%"100%"

©"OECD/IEA"2014""

How'could'energy'make'the'21st'century''an'African'century?'

!  Energy'could'do'more'to'act'as'an'engine'of'inclusive'economic'and'social'development'

!  An'African'Century'Case'assesses'the'impact'of'faster'movement'in'three'key'areas:'

" An&upgraded&power&sector;$reducing$power$outages$by$half$and$achieving$universal$access$in$urban$areas$

" Deeper&regional&co1opera<on;$expanding$markets$and$unlocking$a$greater$share$of$the$con+nent’s$hydropower$poten+al$

" Be`er&management&of&resources&and&revenues;$more$efficiency$and$transparency$in$financing$essen+al$infrastructure$

©"OECD/IEA"2014""

100

200

300

400

500

600

700

Million"pe

ople

Without"access"to"electricity"

Energy'can'build'a'path'to'prosperity'

Outcomes'in'the'African'Century'Case,'2040'

By&increasing&the&coverage&and&reliability&of&energy&supply,&the&African&Century&Case&

unlocks&an&extra&decade’s&worth&of&growth&in&per1capita&incomes&by&2040&

Main"Scenario"

African"Century"Case"

"1"

"2"

"3"

"4"

"5"

Thou

sand

"dollars"(2

013,"M

ER)"

GDP"per"capita"

Gigaw

acs"

Renewables[based""power"generaKon"capacity"

40

80

120

160

200

240

280

©"OECD/IEA"2014""

Conclusions'

!  Energy'is'a'cornerstone'of'sub>Saharan'strategies'for'poverty'reduc@on'and'economic'growth'

!  Improvements'in'sector'governance'are'needed'to'bring'in'new'energy'investors'and'kick>start'development'

!  The'shortest'route'to'power'is'a'combina@on'of'regional'and'na@onal'level'grid'projects,'and'mini>off'grid'projects'

!  Renewables'are'central'to'the'regions'energy'outlook,'while'more'efficient'and'sustainable'use'of'biomass'will'create'a'healthier'domes@c'energy'balance'

!  Concerted'ac@on'to'improve'the'func@oning'of'the'energy'sector'is'essen@al'if'the'21st'century'is'to'become'an'African'century'

©"OECD/IEA"2014""

Available'to'download'for'free'at'www.worldenergyoutlook.org'