A Rich and Varied Energy Potential

Published on 03.08.2016

High School

10 min read

Africa's energy needs are expected to increase at a fast past, driven by economic growth of around 5%, a population that is rising faster than the rest of the world and rampant urbanization. A combination of poverty, certain governance-related issues and the risk of above average are impeding the development of Africa's energy resources, which are considerable. Africa has been extracting and producing oil for decades. Its natural gas reserves have begun to be developed. Its hydroelectric resources are underutilized, and its solar, wind and potential is tremendous.

Oil Production Dates Back Decades

and production have been a part of African history ever since the 1930s when international oil companies arrived on the continent. Prior to 1960, African oil production was low. The first major leap forward took place in 1960-1970, led by Gabon, Nigeria, Algeria and Libya. The second one occurred at the end of the 20^th century when important oil discoveries were made in the Golf of Guinea and off the coast of Angola.

In 2014, African oil accounted for more than 10% of world production and nearly 20% of global export volume. Production is expected to continue growing, albeit at a slower pace due to higher costs associated with increasingly complex fields and the depressed international oil market, which is hurting major oil producers such as Nigeria, Algeria and Angola.

Over the decades, the oil have been expanding the local content of their operations – notably by making it a priority to hire local teams and provide them with training – so that host countries can reap a larger share of the economic benefits. Furthermore, they support local education and outreach programs and are helping to improve access to energy for host communities.

Total in Angola, for example, has increased the involvement of local contractors in its projects. The number of local man-hours for the CLOV and Kaombo projects came to 10 million and 14 million respectively. In the field of safety, between 2005 and 2015, Total halved the number of recordable injuries, while increasing output by 40%.

10%:
the percentage of the world's oil produced offshore

The Economic Recovery of Gas

Recovering and utilizing associated gas from oil fields to reduce flaring is one of the most significant developments in the energy industry. Flaring reduction is a global initiative. According to a World Bank report, 150 billion cubic meters of natural gas are flared annually. Of this amount 40 billion cubic meters are flared in Africa alone, which is equivalent to half of the continent's consumption¹. The industry is opening up new outlets for associated gas. Between 2005 and 2015, Total reduced the amount of gas flared in its operations by 56%.

Africa's LNG market, already well developed in Nigeria and Algeria, is set to grow sharply off the coast of East Africa, thanks to huge natural gas discoveries in Mozambique and Tanzania.

Hydropower Lagging Behind

Africa is home to some powerful rivers but only uses about 5% of its hydropower potential. The Aswan High Dam in Egypt, for example, built at the end of the 1960s, now ranks just 49^th among the world's largest dams, which are primarily located in China and the Americas.

Several extremely ambitious projects are underway that could put Africa at the top of the global list. However, they are experiencing problems typical of those found in the hydropower industry: elevated financing costs, long completion times, challenging work in under-equipped areas and the need to obtain the approval of different countries as large-scale projects like these often involve extensive waterways.

The following two projects have either been confirmed or launched:

The Grand Inga Dam on the Congo River in the Democratic Republic of Congo (DRC), confirmed at year-end 2015. The various hydropower plants built on the dam would have a cumulative capacity of 40,000 megawatts (MW) – equivalent to the output of 30 average-sized nuclear reactors – and would cost $80 billion. South Africa has agreed to purchase half of the generated by Inga, allowing it to greatly reduce its dependency on . The dam will take five to ten years to complete.
The Grand Ethiopian Renaissance Dam (also known as the Millennium Dam) on the Blue Nile in Ethiopia. Following protracted negotiations with Sudan and Egypt, which were worried about the project's potential impact on the Nile, work began in 2013. The dam, which is scheduled for completion in 2017, would have an of 6,000 MW.

If built, the Grand Inga Dam on the Congo River would be the largest in the world.

Solar and Wind Farms

Many African countries are starting to embrace both solar energy (the Ourazazate farm in Morocco, the Zagtouli plant in Burkina Faso and the Nzema project in Ghana) and wind power (the Lake Turkana wind project in Kenya and the Ashegoda farm in Ethiopia).

Thanks to distributed (decentralized) solar technology, the prospects for solar energy are extremely bright.