What does energy transition mean for Africa?

During the Industrial Revolution, industries and modernised transport systems were established, and these sectors needed a constant energy supply, mainly from oil and coal. During that era, Africa was the source of raw materials but no industries of such scale were established in African countries. Some African countries remain with substantial coal deposits that cannot be commercially utilised as a dependable and cheap energy source for commercial and economic activities. It appears that Africa missed the opportunity to commercially exploit coal for its economy when its resources were exploited to flourish other economies. Gradually, among other factors, restrictive laws, and expensive labour, pushed the establishment of industries in emerging markets e.g., China, India, and Pakistan but Africa is still lingering behind.

While every country has at one point contributed to harmful carbon emissions in the environment, currently, there is a push for countries to reconsider their role in such activities and transition to a carbon-free environment. Africa must expand its industrial base and find its commercial dominance in the global economy but, it cannot avoid its obligation to reduce its carbon footprint by adopting an environmental component (ESG) in its projects despite the significant cost component. Efforts and funds are deployed in supporting countries to adopt environmentally friendly practices e.g., forestation, carbon projects, renewable energy etc and there is a global movement with a target of cutting carbon emissions to net zero by 2050. But what does this mean for Africa?

Creation of new opportunities: 

Energy transition means reducing to zero carbon emissions and transitioning to exclusive utilisation of green energy. Energy transition will create ‘green jobs’ and new ventures will be established to support the energy transition to the lowest levels of communities. Green jobs include jobs to minimise contamination and waste, reduction of greenhouse gas emissions, sensitisation on climate change and mechanisms to combat it, protect and restoration of ecosystems, increased recycling ventures, conservation projects and initiatives etc. This means that there will be an influx of inward capital either through loans, equity, or grants for projects to support such energy transition and create much-needed employment opportunities.

It could be argued that the energy transition will create job losses for such sectors and industries e.g., the fossil fuel industry and the related value chains, including mining, extraction, refining, distribution/logistics, and power generation with fossil fuel sources. It is worth considering that, energy transition doesn’t mean eradicating mining activities or replacing the fossil fuel industry overnight, rather it means requiring these sectors to initiate, undertake, or finance activities and projects solely focused on green energy e.g. buying credits to offset their carbon footprint, adopting industrial practices which focus on clean emissions, rehabilitation projects during the closure, financing research, and invention initiatives focused on green energy and incorporating green energy sources in their operations.

Utilisation of renewable energy and reduction of costs:

On effective implementation of energy transition and utilisation of renewable energy, there will be reduced energy costs. Renewable energy is significantly cheaper compared to other sources of energy mainly because once the equipment is set up and aside from the standard repairs and service, the cost of energy is freely available and re-generates. This will allow most remote areas to access to clean energy at an affordable cost and reduce overreliance on fossil fuels as a source of energy. Access to clean energy allows improved livelihoods in such remote communities.

Reduced health burden:

Environmental degradation particularly water and air pollution causes long-term health issues in humans and other living things. Energy transition to cleaner sources of energy in all human activities will reduce a significant portion of the burden on the already overwhelmed health facilities. It will increase productivity in animals and overall agricultural activities.

Reduced global warming and other naturally occurring disasters:

Over the years it has become clear that the environmental damage caused by several human factors, one of them being dependency on fossil fuel as a source of energy has led to negative impact to the livelihood of humans. Africa has some of the most vulnerable communities in the world and it is already experiencing an increase in devastating flood- and drought-related food insecurity which has devastating effects. Transitioning to green sources of energy will lead to the reduction of global warming effects and deter natural disasters and eradicate food shortages.

Conclusion:

Overall, the benefits to African economies for transitioning to green energy outweighs the costs involved. It is necessary to take a proactive approach by changing laws and policies to factor in the green energy transition in all sectors. Also, specific action by African Governments should be to create incentives for green energy projects and initiatives to make an attractive investment climate. For more information on Africa’s energy transition, please contact Amalia Lui.