RAHAF ABDULHADI ALKHAZRAJI
The writer is a researcher at TRENDS Research & Advisory
Many countries in Africa are facing an energy crisis amid extreme heat waves and the impacts of climate change, whose effects are evident in frequent power outages.
The underlying causes of the crisis vary depending on each country, including shortage of traditional energy reserves and non-utilisation of the significant potential of solar, wind, and hydrogen energy to develop the energy sector.
Access to electricity is critical for achieving development. However, estimates from the International Energy Agency (IEA) indicate that 567 million people in sub-Saharan Africa did not have access to electricity in 2021, accounting for more than 80% of the global population without access.
Continuous power outages may hinder production and slow down economic growth, especially as governments in some African countries resort to load-shedding to address the electricity crisis.
If this policy continues for a long period, it poses a significant risk to economic growth and foreign investment, given the concerns about business disruption.
A number of institutions and countries are trying to help address the energy crisis in Africa.
These efforts include commitments from the World Bank and the African Development Bank to provide electricity to about 300 million people by 2030 through renewable energy systems.
Moreover, the UAE’s “Union 7” initiative aims to supply clean energy to 100 million people in Africa by 2035, and China has pledged to support the continent with an estimated $51 billion in funding for infrastructure and to launch 30 clean energy projects in Africa.
Without access to sustainable energy at affordable prices, it is difficult for African countries to achieve their developmental aspirations.
Expansion of investments in electricity connections will benefit millions of Africans and bring about significant transformations in the economies of the continent.
What compounds the crisis is the fact that the world is still far from achieving Goal 7 of the Sustainable Development Goals, which aims to ensure access to energy for all by 2030.
Additionally, there is a substantial disparity in clean energy investments among countries of the world, and a rising number of people living without electricity, particularly in Africa.
The challenge for African countries that have experienced frequent power outages in recent years, such as Chad, Guinea, Niger, Mali, Ghana, Nigeria, South Africa, and Egypt, lies in attracting more investment to expand access to electricity, and clean fuels and technologies.
The reality, however, is that total investments in the energy sector are insufficient, especially given that energy is a key driver of growth and production, which means that these crises directly affect GDP.
As the macroeconomy is at risk due to energy sector disruptions at a time when countries need to strengthen “energy security” and ensure access to energy for all groups, it is essential to increase the share of clean and renewable energy in the energy mix.
This should be part of a broader package of solutions, including the establishment of strategic fuel reserves, electrical interconnections with neighbouring countries, and reforms to the electricity sector in terms of administrative and technical efficiency.
These are in addition to international partnership agreements that include aid programs and loans for the electricity sector.
Countries can also benefit from modern technologies and localise them, especially those related to solar cells and wind turbines, through scientific research.
There are temporary solutions to change the course of the crisis, such as regulating load-shedding in a way that does not affect productive sectors and takes into account the interests of citizens as much as possible.
Accelerating the deployment of solar microgrids and household solar energy systems, as well as generalising decentralised energy solutions, can also help.
However, in the long term, a clear energy security policy should be adopted, especially given the enormous potential for energy investment, with the declining costs of renewable energy generation, and the likely decrease in the cost of electricity storage technologies.
With Africa’s promising economic growth, energy demand rises, creating new investment opportunities that contribute to development and mitigate the impacts of climate change.
Also, with a supportive regulatory and legislative environment for renewable energy investment, opportunities for financing and investment will be more available to develop renewable energy projects.
This will, in turn, provide electricity, increase production capacity, and pave the way for sustainable growth.