How an African energy transformation can spur development

The economies of sub-Saharan Africa have roughly doubled in size (in constant USD) since 2000, and across the region, urbanization and new development are reshaping the landscape. Yet although Africa has ample energy resources, more than half its people have no access to electricity, and power generation often cannot meet the needs of those who do.

The outlook for household energy is troubling: a majority of families – some 700 million people – rely on traditional biomass for cooking, and while in other regions, biomass use is decreasing, by 2020 another 200 million people in sub-Saharan Africa are expected to rely on it. Efforts to bring modern energy access to all – electricity and clean fuels – are simply being outpaced by rapid population growth.

Transforming Africa’s energy supply is no small task, but two New Climate Economy papers launched today at the Climate Change and Development in Africa (CCDA) conference in Victoria Falls, Zimbabwe, show that large-scale, strategic investments to electrify the region and bring clean cookstoves and fuels to all households would yield huge benefits.

The first paper, Bringing clean, safe, affordable cooking energy to households across Africa, by a team of SEI Stockholm and Africa researchers, presents the case for transforming household energy markets: for public health, to free up women’s time for productive uses, and to provide new livelihood opportunities.

Traditional biomass cookstoves have serious health, environmental, and economic costs. An estimated 600,000 Africans die prematurely each year from the impacts of exposure to biomass smoke. If left unchecked, the greenhouse gas emissions from fuelwood use could rise to 6.7 Gt of CO₂e by 2050, about 6% of Africa’s total projected 2050 emissions.

When considering all the impacts, biomass cookstoves could cost the region roughly 60 billion USD a year, according to the World Bank. The time spent gathering fuel and cooking on traditional stoves alone wastes almost 30 billion USD in lost productivity.

“A large-scale shift to cleaner cookstoves, that are sold, supported and, ideally, manufactured locally to meet local needs, would lead to health improvements and create business opportunities and jobs in sub-Saharan Africa,” says Fiona Lambe, lead author of the paper and an SEI research fellow. “And households will also quickly see economic benefits: for instance, improved charcoal stoves cost as little as 7 USD and can save a household 168 USD annually on fuel.”

The associated climate benefits are also substantial. One improved biomass stove reduces greenhouse gas emissions by an average of 1.5 tonnes CO₂e per year; an ethanol stove avoids as much as 1.85 tonnes CO₂e per year. If these improvements led to a 50% reduction in biomass use, the region could be expected to save as much as 190 Mt CO₂e of greenhouse gases, especially if the improvements are made to cookstove efficiency, rather than fuel-switching.

A major need for new investment

The second paper, Building electricity supplies in Africa for growth and universal access, recommends that African governments review national power plans to ensure they take advantage of recent dramatic reductions in renewable energy costs and consider the role of off-grid electricity as an essential component of ensuring wider access.

“More than half of Africa’s population does not have access to electricity, and even among those who do, blackouts can be common,” says Andrew Scott, the paper author and a research fellow at the Overseas Development Institute in London. “Investment in the electricity grid will need to be ramped up in the coming years in order to support economic growth and allow for universal access.”

The current level of investment in sub-Saharan electricity systems is only about 8 billion USD a year, according to the International Energy Agency, but must reach 46 billion USD a year over the next 25 years to meet demand. To reach the required investment, African governments must attract more international commercial lenders and foreign equity, in addition to funding from domestic investors and development finance institutions.

“Thankfully, Africa’s renewable energy resources are substantial,” says Helen Mountford, programme director of the New Climate Economy. “With the right investment, they’ll be more than enough to meet future energy demand. The potential for solar PV alone has been estimated at 6,500 TWh a year, almost three times the expected demand in 2040.”

In addition, the total potential for concentrated solar power is estimated at 4,700 TWh a year, and wind power at 2,800 TWh a year. For every MW of renewable energy installed in Africa, 27 jobs could be created, according to the International Renewable Energy Agency.

Governments also need to make connecting to the grid more affordable, the paper suggests. For instance, a World Bank study of 15 African countries found that connection charges averaged 168 USD, high by international standards, which poses a barrier to access. These costs could be reduced by spreading them out over a long time rather than all up-front.

Both papers were produced as inputs to the 2015 Africa Progress Panel Report, and were updated and revised for final publication. SEI’s Francis X. Johnson and Anne Nyambane presented the cookstoves paper at the CCDA.

The New Climate Economy is the flagship project of the Global Commission on the Economy and Climate. It was established by seven countries: Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the United Kingdom, as an independent initiative to examine how countries can achieve economic growth while dealing with the risks posed by climate change. To learn more, visit www.newclimateeconomy.net.