Domestic Gas Resources Can Improve the Lives of Africa’s Young, Increasing Population, and Deliver the Energy it Needs to Develop within a Just Energy Transition.
LONDON, Feb. 14, 2023 /PRNewswire/ — The International Gas Union (IGU) in partnership with Hawilti Ltd. released an important new study on Gas for Africa, assessing the potential for domestic gas resources to energise Africa in line with the global energy transition. The African Energy Commission (AU-AFREC) and the Africa Finance Corporation endorse the report and its findings.
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.
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 6% 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 bcm of natural gas, while its domestic demand is just above 160 bcm.
The adoption of natural gas in Africa will have minimal impact on the net global GHG emissions, given its miniscule starting point.
Africa has a fifth of the world’s population and represents only 3% of global emissions. For the 48 Sub-Saharan African countries, without South Africa, the estimated share of emissions is 0.55%. If Africa consumes 50% (90 bcm/y) more natural gas by 2030 than it does today, it would generate cumulative CO2 emissions of 10 gigatons (Gt), taking its share of global emissions to 3.5% 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 can achieve a reduction of 50% in greenhouse gas (GHG) and more than 90% 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.
Africa wants to leverage its 18 trillion cubic metres of natural gas to rebalance pressing needs of local development with lucrative export revenues.
Access to gas can provide stable electricity in countries with no lower-emission alternatives and strengthen power systems to add more renewable energy, and begin decarbonising energy supply, displacing wood, biomass, charcoal, and diesel. Developing domestic access to gas in Africa can provide energy needed today, while anchoring the continent’s future low-carbon and renewable energy.
By developing domestic gas markets and re-orienting gas towards its own energy needs Africa seeks to promote industrialisation, create jobs, diversify economies, produce fertilizer to grow food, petrochemicals to make consumer goods and advanced products, and steel and cement to develop modern infrastructure.
To realise its vast potential and benefit from lucrative sector investments, a pragmatic approach, sense of urgency, and focus on competitiveness are required for Africa to attract the billions of dollars that will be injected into gas projects this decade.
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.
Fortunately, successful African case studies detailed in the report demonstrate that there are many local solutions and opportunities to achieve gasification, as well as emissions reductions.
The Executive Director, Africa Energy Commission, Rashid Abdallah stressed:
“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% of Africans, playing as catalyst in the provision of clean cooking technologies to nearly billion Africans and creating jobs. 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.”
The CEO of Africa Finance Corporation, Samaila Zubairu, commented:
“The global energy market is in an unprecedented state of flux, opening significant opportunities for exploration and development of gas in Africa. 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.”
The IGU President, Madam Li Yalan reiterated:
“Access to modern energy in Africa is imperative for its development, for having an ability to respond to climate change, and for gradually decarbonising its economies. Gas is one of the keys to unlock this access, and it is also a fuel for producing stable and flexible energy needed to integrate more renewables. Using its gas resources together with renewable energy technologies, Africa can build energy systems compatible with a climate- or carbon-neutral future and underpin the continent’s sustainable economic development.”
The Director & Head of Research at Hawilti, Mickael Vogel said:
“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. 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.”
About the Report
The Gas for Africa Report is based on market research, publicly available data, and research interviews conducted with various public and private sector executives across Africa. It assesses key drivers, potential, barriers, and solutions of developing natural gas value-chains in Africa to fight energy poverty and enable a just energy transition. In doing so, it looks at African cases of successfully developing gas, local gas markets, and exports, reducing emissions, and addressing demand-side barriers. Based on this in-depth analysis, the report proposes seven key principles to the successful development of African gas markets.
About the International Gas Union (IGU)
The International Gas Union (IGU) is a global organisation, which represents more than 150 members in over 80 countries, covering more than 90% of the global gas value chain. The members of the IGU are national associations and commercial entities of the gas industry worldwide, engaged in every aspect of the gas supply chain, from production of natural, renewable, hydrogen and other low and zero-carbon gases through their transportation, delivery, and all the way to end-use. www.igu.org
Hawilti is an investment research and consulting agency supporting the growth of African businesses by providing business intelligence, investors relations, and business development solutions across the commodities markets and broader infrastructure space. Hawilti frequently publishes economic and market intelligence on Africa and offers comprehensive and updated analysis of sector trends and developments covering the continent’s natural resources and energy sector. www.hawilti.com
please contact:Tatiana Khanberg, Director, Strategic Communications and Membership, Tatiana.Khanberg@igu.org
SOURCE International Gas Union