Energy key to sub-Sahara economic growth


Sub-Sahara Africa must invest in modern forms of energy to unlock faster economic and social development, a new report by the International Energy Agency’s (IEA) has said.

The Africa Energy Outlook report reckons that sub-Saharan Africa is endowed with more than sufficient energy resources to meet the needs of its population but they remain largely under-developed, forcing nearly two thirds of the population to depend on traditional forms of energy.

“A better functioning energy sector is vital to ensuring that the citizens of sub-Saharan Africa can fulfil their aspirations. The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge,” said Maria van der Hoeven, IEA Executive Director.

Currently more than 620 million people in the region (two-thirds of the population) live without electricity and nearly 730 million people rely on dangerous, inefficient forms of cooking.

The use of solid biomass (mainly fuelwood and charcoal) outweighs that of all other fuels combined and average electricity consumption per capita is not enough to power a single 50-watt light bulb continuously.

According to the report, apart from the region being home to several major energy producers including Nigeria, South Africa and Angola, sub-Sahara Africa account for almost 30 per cent of global oil and gas discoveries made over the last five years.

The report finds that investment in energy supply has been growing, but two-thirds of the total since 2000 has been aimed at developing resources for export.

Grid-based power generation capacity continues to fall very far short of what is needed, and half of it is located in just one country (South Africa). Insufficient and unreliable supply has resulted in large-scale ownership of costly back up generators.

The report project that as sub-Saharan economy to quadruples in size by 2040 and the population nearly doubles to over 1.7 billion, energy demands will grows by around 80 per cent.

Power generation capacity is expected to quadruples with renewables accounting for nearly 45 per cent of total capacity, varying in scale from large hydropower dams to smaller mini- and off-grid solutions. There will also be a greater use of natural gas in gas-producing countries.

Natural gas production reaches 230 billion cubic metres (bcm) in 2040, led by Nigeria and increasing output from Mozambique, Tanzania and Angola.

LNG exports onto the global market triple to around 95 bcm. Oil production will exceed six million barrels per day (mb/d) in 2020 before falling back to 5.3 mb/d in 2040.

Nigeria and Angola will continue to be the largest oil producers by far, but with a host of other producers supplying smaller volumes.

Demand for oil products is anticipated to double to 4 mb/d in 2040, squeezing the region’s net contribution to the global oil balance. Coal supply will grows by 50 per cent and continues to be focused on South Africa, but it is joined increasingly by Mozambique and others.

“Economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector,” said Fatih Birol, IEA Chief Economist. “

Birol added the payoff can be huge with each additional dollar invested in the power sector boosting the overall economy by $15.

SOURCE

International Energy Agency (IEA)

http://www.worldenergyoutlook.org/africa/

Energy


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