The world is gradually making the push for cleaner and sustainable sources of energy. While countries such as Germany, through its Energiewende policy, have made remarkable progress in the transition to clean and sustainable energy, other countries are still putting together the best strategies for the transition. Available data shows that while Africa contributes only about 3.94% to global Green House Gas (GHG) emissions, China emits almost three times more of Africa’s emissions. While electricity markets in developed countries have been able to meet, and in some cases, exceed local electricity demand Africa, according to the ‘The Energy Progress Report’, has the least access to electricity with over 600 million people without access. While the continent relies heavily on fossil fuels for electricity generation, adequate funding remains a key challenge for the sector’s development.
African electricity markets are largely state-owned, with only a handful of countries with unbundled utilities. These state-owned markets suffer from poor funding leading to the breakdown of critical market infrastructure. In addition to poor funding, insufficient tariffs for electricity supply has been a stumbling block for electricity investments. In South Africa, state-owned electricity company Eskom is currently suffering from a huge debt crisis, poor funding and low revenues. The government has been forced to amend existing laws to allow private sector participation in electricity generation to ease the burden on the national grid. The South African government has also begun unbundling Eskom into generation, transmission, and distribution companies to improve supply and efficiency. On the other hand, Nigeria operates an unbundled electricity market; however, the Transmission Company of Nigeria (TCN) is still fully owned by the Federal Government. Inadequate funding, lack of a competitive electricity tariff, and inconsistent government policies have resulted in a market unable to meet demand, thereby crippling economic development.
With the global transition to energy, financial institutions, energy giants, and even Non-Governmental Organisations (NGOs) have called for defunding fossil fuel developments. Unlike the rest of the world, Africa is faced with several developmental challenges hindering economic progress, with a vast majority of the continent living on less than $2 a day. Africa needs approximately $75 billion annually to meet its energy demand. For a continent reliant on Foreign Direct Investments (FDI) and partnerships for economic development, a successful campaign for defunding fossil development will have a devastating impact on the continent. African governments, therefore, require access to funding for critical energy infrastructures in the generation, transmission, and distribution sectors.
To meet its energy demands, Africa must attain economic growth and stability; the continent needs to develop critical sectors of its economy, which are heavily reliant on energy access. Currently, renewable energy technologies are not yet able to drive the full-scale industrial development Africa requires; therefore, a case must be made for Africa and its continued use of fossils for industrial development. On the other hand, renewable energy solutions can be deployed for rural development, providing much-needed energy access to areas without grid coverage.
In conclusion, should Africa pay the price for the global transition to clean and renewable energy? Is the world ready to sacrifice Africa’s economic development on the altar of the global energy transition? Can Africa meet the global energy transition deadlines without improving energy access for millions on the continent? Certainly not; Africa cannot withstand the impact of sustained economic underdevelopment, nor can it attain economic growth without using fossil fuels.