IEA charts course to 2040 African renewables upsurge

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Renewable energy generation in sub-Saharan Africa could increase more than twofold to make up 44% of the region’s generation capacity by 2040, the International Energy Agency (IEA) has forecast.

Solar PV and CSP will both record double-digit growth, collectively accounting for 12% of total generation capacity and 7% of supply in the region by 2040, according to scenarios outlined in the agency’s ‘Africa Energy Outlook’ report.

In the central scenario in the agency’s report, sub-Saharan Africa’s economy will quadruple by 2040 and its population nearly double to over 1.75 million, providing impetus for the growth of renewables in the region.

PV is expected to perform strongly, reaching 48GW of capacity by 2040.

The agency notes that at over US$175/MWh, the cost of generating power from solar PV in sub-Saharan Africa is currently above the average cost of power from other grid technologies. But the region’s attractive solar resources mean it is beginning to gain enough of a foothold to become a serious player, as evidenced by PV’s prominence in South Africa’s national renewables programme and a number of proposals for large projects coming forward in countries such as Ghana, Nigeria and Ethiopia, it adds.

As well as large-scale projects, solar PV’s role will become particularly pronounced in the mini-grid/off-grid segments as it increasingly competes with diesel generation.

According to the IEA, the delivered cost of diesel would have to remain at less than US$0.50 per litre to remain competitive with PV. As this is unlikely based on today’s trends, the IEA forecasts PV to be the dominant player in both the mini-grid and off-grid sectors by 2040, accounting for 37% and 47% respectively of power generation in each.

But the agency notes that in a region with a track record of underinvestment in energy infrastructure, its forecasts some significant implementation barriers.

To get close to its envisaged levels of new capacity, the agency makes a number of recommendations, including an additional US$450 billion investment in power sector investment and deeper cooperation and integration between countries.

“Economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector,” said IEA chief economist Fatih Birol. “The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by US$15.”

Last month the IEA said solar could become the world's largest electricity source by 2050 with the right policy support.

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