African countries must make substantial efforts to attract private investment to the renewable sector, the International Monetary Fund (IMF) said on Monday in its “Finance & Development” Magazine.
Renewable energy sources, especially solar, are ideal for meeting Africa’s
electrical power needs, mentioned Mouhamadou Sy, economist in the IMF’s Fiscal Affairs Department and Gregor Schwerhoff, economist in the World Bank’s Macroeconomics, Trade, and Investment Department in the Magazine.
About half of sub-Saharan Africa’s population does not have access to electricity, yet those who do pay on average nearly twice as much as consumers elsewhere in the world.
Power shortages cost the continent about 2% to 4% of GDP a year while the large electricity needs will only grow in the foreseeable future.
Given that the population in sub-Saharan Africa is expected to grow from 1 billion in 2018 to more than 2 billion in 2050, the demand for electricity is projected to expand 3% a year.
This takes into account a steady increase in access to electricity as well as greater energy efficiency. Meeting that demand with current energy sources would have severe consequences for health and the environment.
The current energy mix in Africa is based mostly on burning coal, oil, and traditional biomass which reflects the energy resources of the continent, but also the use of technologies of the past.
While this energy mix is comparatively cheap, it is insufficient to meet current needs, and negative effects on the environment are left unaddressed, the magazine mentioned.
The continent’s sources of energy will need to change, especially if African governments aim to achieve a healthy environment for their citizens and meet the emission limits for greenhouse gases set out by the 2015 Paris Agreement.
Fortunately, thanks to notable technological advances, Africa does not have to rely on large amounts of fossil fuels, as advanced economies did when they were at Africa’s current stage of development.
There is the option to design an energy mix, built largely on renewable sources, that supports both strong growth and low emissions.
Apart from ensuring an ecologically sustainable approach to development, investing in renewable energy will also generate new job opportunities.
The right energy mix will allow Africa to develop rapidly while respecting the emission levels required under the 2015 Paris Agreement, in which governments commit to limiting global warming to 2°C above preindustrial levels.
Prices for renewable energy have fallen substantially in the past few years, especially for solar power, whose cost decreased 77% between 2010 and 2018 according to the International Renewable Energy Agency.
Geothermal energy can be very efficient but is available only in certain
locations. Hydropower requires a careful balancing of environmental, social, and economic objectives.
It is impossible to exploit the entire technical potential of hydropower: it requires the inundation of large areas, which threatens local ecosystems and often involves relocation of the local population.
Hydropower is currently being hampered by continuous drought in southern Africa, and related energy generation has been severely curtailed in Zambia and Zimbabwe because dam levels are dangerously low.
Conditions for solar energy are excellent in Africa, where sunshine is not only abundant but also much more reliable than elsewhere. Investment into renewables is in fact picking up in Africa.