Africa the most energy-poor continent despite large gas reserves

Africa gas

Africa has the lowest energy per capita in the world, while the average electricity use of a sub-Saharan Africa resident is lower than that of a household fridge in the US, according to a new study released by the International Gas Union (IGU), in partnership with Hawilti Ltd.

Where energy is available in African countries, it is often expensive, inefficient, polluting, and unreliable: for example, Nigeria’s grid collapsed four times between January and September 2022.

Domestic natural gas can help to alleviate Africa’s energy poverty, but despite producing over six per cent of the world’s natural gas supply and having close to one tenth of proven global reserves, most of the African continent has no access to its natural gas. Africa’s domestic gas markets remain under-developed or non-existent, especially south of the Sahara, and much of Africa’s abundant natural gas resource development has been for export to the rest of the world. Africa produces over 280 billion cubic metres (bcm) of natural gas, while its domestic demand is just above 160 bcm.

“We are delighted to provide stakeholders and policy-makers with an overview of natural gas dynamics in Africa, and hope it will be valuable to underpin dialogue and pragmatic actions to eliminate energy poverty,” said the director and head of research at Hawilti, Mickael Vogel. “As an Africa-based research and consultancy company, we will continue to highlight the diversity and complexity of African energy markets and we see gas as a critical contributor to the continent’s development and just energy transition.”

Africa has a fifth of the world’s population and represents only three per cent of global emissions. For the 48 Sub-Saharan African countries, without South Africa, the estimated share of emissions is 0.55 per cent. If Africa consumes 50 per cent (90 bcm per year) more natural gas by 2030 than it does today, it would generate cumulative CO2 emissions of ten gigatons, taking its share of global emissions to just 3.5 per cent by 2050, according to the IEA.

In the short-term, natural gas can also provide an immediate emissions reductions benefit when it replaces higher emitting energy sources, such as biomass, wood, charcoal, coal, and heavy fuel oil. For example, when replacing coal with natural gas in power generation, Africa could expect to achieve a reduction of 50 per cent in greenhouse gas (GHG) and more than 90 per cent in air pollution emissions.

To stay on a long-term decarbonisation trajectory, developing gas infrastructure and markets in Africa should also go hand in hand with integration of variable renewable generation, carbon capture, renewable gases, and hydrogen.

“Natural gas is a resource that has a significant role to play in bringing about socio-economic development and mitigating climate change in Africa. As part of a just transition, Africa requires gas to contribute to eradicating energy poverty, providing electricity to almost 50 per cent of Africans, playing as catalyst in the provision of clean cooking technologies to nearly billion Africans and creating jobs,” stressed Rashid Abdallah, executive director of the Africa Energy Commission. “The calls for an immediate end to all fossil fuel utilisation, and request for global capital investors to stop funding gas projects will severely impact Africa’s socio-economic development.”

By developing domestic gas markets and re-orienting gas towards its own energy needs Africa seeks to promote industrialisation, create jobs, diversify economies, produce fertiliser to grow food, petrochemicals to make consumer goods and advanced products, and steel and cement to develop modern infrastructure.

Sustainability improvements in current operations will be vital for the gas value chain in Africa to ensure its global competitiveness. There is growing urgency to effectively manage and eliminate methane emissions globally, as well as to end routine flaring.

Futureproofing projects to strengthen sustainability and climate value and unlocking additional sources of capital domestically will be key to overcoming financing challenges. Addressing the infrastructure and demand-side barriers will require continued regional cooperation, leveraging gas value chains to develop industrial clusters, reforming electricity markets, pricing emissions, and encouraging the adoption of small, scalable technologies. Policy uncertainty and physical security risks that create an unfavourable business climate and discourage investment also need to be urgently addressed.

“The global energy market is in an unprecedented state of flux, opening significant opportunities for exploration and development of gas in Africa,” said Samaila Zubairu, CEO of the Africa Finance Corporation. “At the same time, gas is key to helping Africa end its energy poverty quickly and affordably, by providing an alternative to wood fuel, which would lift hundreds of millions out of poverty while preserving Africa’s forests – a valuable carbon sink for the world. Gas offers further solutions for Africa’s food security challenges as a key source of critical fertilizers, while also generating needed export revenue for re-investment in renewable solutions.”

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