Wärtsilä, a global leader in innovative technologies and lifecycle solutions for the marine and energy markets, has just released a new report titled Pathways for Africa’s Energy Future. In the report, Wärtsilä notes that as the transition picks up speed in developed and emerging countries, a lack of access to capital is stalling traction in developing countries, especially in Africa.
Access to electricity is still a major challenge in Africa. It’s 2022, and 600 million people in Africa still don’t access to electricity. About 50% of them live in the Democratic Republic of the Congo (DRC), Ethiopia, Nigeria, Tanzania, and Uganda. For example, in Nigeria, Africa’s largest economy, the power system continues to face major challenges, with an estimated 60-70 million people without access to grid power. To ensure that universal access to affordable electricity is achieved in Africa by 2030, connections to over 70 million people will need to be added per year! This would essentially mean tripling the current rate of connections, according to the IEA’s latest Africa Energy Outlook report.
Wärtsilä’s report seeks to show that with the right planning and investment, renewable energy can reduce energy costs and increase energy access across Africa. This will be a key driver for growth and economic development. Three country case studies (Nigeria, South Africa, and Mozambique) are presented in the report. The report finds that the three countries can leapfrog some developed nations by not embedding inflexible fossil fuel-based systems.
“A combination of climate finance, effective planning and system reforms will be essential to ensure such a massive transformation.”
The systems modeled by Wärtsilä will require a total investment of around $119 billion over the next decade. Wealthy nations would need to deliver on the promise made in 2009 to bring $100 billion annually in climate finance from 2020 to anchor these investments.
The report shows that replacing coal with renewable energy, combined with flexibility from gas with carbon capture technology and energy storage, is the most effective way to reduce energy costs, increase energy access, and improve reliability. Wärtsilä’s modeling found that renewable energy and flexibility can generate enough energy to provide power for close to 100 million people in South Africa, Mozambique, and Nigeria who currently do not have energy access. This would need to be matched with the required grid infrastructure.
Håkan Agnevall, President and CEO, Wärtsilä Corporation, said: “Despite contributing less than 3% of the world’s energy‐related carbon emissions, African countries are among the hardest hit by climate change. COP27, hosted in Egypt, is the perfect opportunity to deliver on global climate finance pledges so that, as a global community, we can seize this moment to act and unlock Africa’s renewable potential. That investment must be combined with effective planning and system reforms to increase energy access and create the renewable energy systems of the future.”
Here are the key findings from Wärtsilä’s modeling for power system decarbonization pathways for the three countries:
Nigeria can cut electricity costs by 74% on its path to net zero by 2060. Wärtsilä’s modelling shows that Nigeria can build a 100% renewable net zero power system by 2060, comprising around 1,200 GW of clean capacity, in line with its ’30-30-30’ and net zero targets. The impact is significant, with the cost of electricity generation predicted to drop by 74% by 2060 compared to 2022 levels and emissions dropping to zero.
South Africa can solve its load-shedding dilemma and save USD 26 billion by 2032. By adding 40 GW of wind and solar PV, South Africa can build a power system that would meet current and future energy demand. This can deliver a 17% reduction in power system emissions and reduce energy system costs by USD 10 billion per year by 2032.
Mozambique can reduce emissions and save USD 84 million. By adding 200 MW of low-cost renewable energy annually, Mozambique can build 3 GW of clean capacity by 2032, supported by 205 MW of new energy storage capacity and 1 GW of grid balancing engine capacity. This would cut 5.6 million tonnes of carbon emissions between 2022-2032 and save USD 84 million on the cost of electricity production.
The 27th UNFCCC Conference of the Parties (COP27) will be held in Sharm El Sheikh in Egypt. Wärtsilä says the report gives African leaders and investors a roadmap to build power systems of the future.
“If policymakers in the Global South attending COP27 set ambitious decarbonisation targets, and are supported by the Global North, it is possible for renewable energy to power economic development and improve energy access across the continent.”
Africa’s renewable energy potential has been well documented, however, only 1% of the world’s installed solar PV capacity is in Africa. Wärtsilä report says unlocking this resource will have a transformative impact on millions of Africans — improving lives and transforming communities.
Wärtsilä produced this modelling using independent market simulation software PLEXOS to support African countries that wish to shape multi-year plans to build their optimal power systems for the future
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