A new African energy revolution is underway.
“The African region is gradually moving away from new coal- and gas-fired power plants: new fossil-fuel capacity has fallen by more than 70 percent over the past decade.”
Africa is seeing an acceleration in energy development, with an increase in both fossil fuel and renewable energy projects. Significant oil and gas discoveries have been made in recent years. However, the continent is also focusing on diversifying its energy mix.
Several countries on the African continent are rapidly expanding their energy industries, helped by several factors. First, many oil and gas giants are investing heavily in untapped fossil fuel regions for more diversification in their portfolios and to produce more “low-carbon” oil. In addition, several high-income countries and multinational energy players are currently investing in Africa’s renewable energy market with hydropower, wind, solar and hydrogen energy projects. A number of African countries are also showing economic growth that supports greater energy security.
The African region is gradually moving away from new coal and gas power plants with new fossil fuel additions down by more than 70% in the past 5 years. However, coal and gas continue to contribute about two-thirds of the continent’s annual electricity production. Also, one-third of fossil fuel capacity is less than 10 years old and largely built before electricity demand increased.
The African Union wants 300 GW of renewable energy online by the end of the decade. That is 4 x the estimated 72 GW of installed capacity in 2024. In 2023, there was record renewable energy investment in Africa of about $15 billion . That’s 2.3% of total investment worldwide. Total renewable energy deployment on the continent was 7.9 GW in 2023.
Renewable energy capacity growth was driven by the development of utility-scale wind, solar and geothermal projects in Egypt, Morocco, Kenya and South Africa. Currently, two-thirds of installed wind and solar is in South Africa, Morocco and Egypt. This suggests the need for more renewable investment in other parts of the region.
The growth of South Africa’s solar energy industry has helped the country overcome its energy crisis and regular electricity outages. The higher investments promise more funding in the renewable energy sector in the coming years, as well as a more diverse energy mix in several African countries.