Rystad Energy, an energy analytics and consultancy organization, presented its study of Africa’s energy landscape on Thursday at the African Energy Chamber’s in African Energy Paris Forum.
Noting that Africa is still vastly under-electrified in comparison to other regions, Senior Partner Per Magnus Nysveen stated in his opening presentation that Africa has 40% of the world’s solar energy reserves and that Africa has the opportunity to eradicate power poverty in the same way that Asia has done in the last two decades. Asia was the most powerless region in the world in 2000, with around 700 million people without power.
He stated that South Africa’s electricity shortage had resulted in ‘load shedding’ (planned power outages) every day in 2023, and that the power supply imbalance had increased in five years. The country today has a huge number of viable projects that require finance and would provide investors with good returns.
Bimbola Kolawole, Vice President and Head of Business Development for Africa, discussed the conclusions of the African Energy Chamber’s ‘The State of African Energy 2023’ report, which uses data and analysis from Rystad Energy.
Kolawole noted that following the Ukraine invasion, Europe’s reliance on LNG imports has grown and African LNG producers, led by Nigeria, Egypt, and Algeria stand to benefit. Although Asian financial institutions currently fund most fossil fuel projects in Africa, European lenders will play a bigger role due to the continent’s demand for African gas.
“Last year was a bumper year for the continent’s exploration sector, with the Venus, Graff and La Rona discoveries all made offshore Namibia. These mega finds, along with South Africa’s large offshore gas discoveries, have driven increased operator interest in Southern Africa.” Kolawole also highlighted the large number of frontier acreages in the MSGBC region and West Africa, as well as the East African coast, that could yield further discoveries.
Over $33 billion in upstream investment was expected for 2022 and estimated growth in upstream expenditure in Africa between 2023 and 2025 is around $15 billion.
“It is particularly noteworthy that, while majors are looking to decrease their oil and gas exposure in West Africa, independents are picking up the portfolios being divested.”
Rystad expects that solar, hydrogen and onshore wind will be the driving forces in renewables investment in Africa in the 2030s and that between 2023 and 2035, Africa will contribute a fifth of global hydrogen generation. Injection of new power supply from renewables investment will be key to tackling the high number of people without access to electricity. Egypt, Morocco and Mauritania are expected to lead in the field of renewables.
Rystad Energy is a partner of the African Energy Chamber for its annual African Energy Week conference, to be held in Cape Town on 16-20 October 2023. Africa’s leading energy event is dedicated to eradicating energy poverty by 2030.