Chapter 5 Implications for Africa and the world 5.1 Introduction How the African energy system evolves over the next two decades, and what it will look lik in 2040, are vitally important questions not only for Africa but also the rest of the world. The future pathway is far from certain but, whatever the policy choices, the implications of those choices will resonate throughout Africa and beyond. We have outlined possible pathways for the continent's energy development to 2040 as described in de Chapters 2, 3 and 4. These pathways are based on an in-depth, sector-by-sector an country-specific analysis of Africa's energy sector opportunities: to the best of our knowledge, this is the most comprehensive such analysis undertaken to date. The chapter consists of two secti ■ A discussion of the policy implications and outcomes of the analysis in the global context: This section provides a brief summary of what the future might hold for Africa's energy sector, and what it might mean for global energy and emissions trends, looking in particular at two scenarios. The first is the Stated Policies Scenario, which takes account of existing plans and announced intentions, and the second is the Africa Case, which is based on the Agenda 2063 vision agreed by African leaders (see Box 1.2 in the introduction). ■ Detailed regional and country energy profiles: The second part presents the results of the Stated Policies Scenario and Africa Case for sub-Saharan Africa as a whole as we as for eleven countries in this region: Angola, Cote d'lvoire, Democratic Republic of the Congo, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Senegal, South Africa and Tanzania. The countries covered represent three-quarters of sub-Saharan Africa gross domestic product (GDP) and energy demand today, and two-thirds of population. The profiles aim to provide decision makers with a data-rich set of information on the potential energy pathways for each country, considering their unique energy demand and supply needs and stages of development. Africa's population is among the fastest growing and youngest in the world, and this tren by 2040 are African, and a third of global urban population growth occurs in Afric (Figure 5.1). Over the next 20 years, total population growth in Africa is more than double the combined population growth of China, India and Southeast Asia. In the coming years, Africa overtakes both China and India in terms of total population. This large increase (mostly occurring in cities) will be a major force driving Africa's energy demand growth. 5.2 Implications for the wor is set to continue in the period to One-in-two people added to the world populatio Chapter Implications for Africa and the world 187 Figure 5.1 Total and urban population in Africa, China and India, and share in global growth, 2018-2040 Population 2018-40 population growth tu 2.5 ......................................................................... 100% .....«■ Q. O tu 2010 2020 2030 2040 Total Urban -Total -Urban BAfrica BChina ■ India lOther One-in-two people added to the world population and one-in-three people added to urban populations in the period to 2040 are frican 5.2.1 Africa as a key driver for global energy demand growth A rapidly rising population and growing pace of urbanisation make Africa a key driver of global energy demand growth. In the Stated Policies Scenario, total primary energy demand in Africa grows by 2% per year between 2018 and 2040, double the pace of global demand growth. At the same time, the composition of energy consumption in Africa increasingly moves away from the traditional use of biomass to modern and more efficient energy sources, notably electricity, natural gas and oil produ Effective energy policy choices are essential not only to bring to fruitio growth ambitions (including those contained in Agenda 2063), but also to support economic and developmental goals. These goals include building a sustainable energy system, managing the rapid pace of urbanisation, scaling up industrial capacity and maximising the value of the continent's natural resources. As a tangible representation of the Agenda 2063 vision, the Africa Case incorporates policies to build the African energy sector in a way that allows higher economic growth to be sustainable and inclusive. It shows that achieving the goals of Agenda 2063 does not necessarily require more energy-intensive economies, compared with the Stated Policies Scenario. There is a considerable reduction of bioenergy use in the Africa Case, and growth in demand for other sources o energy is moderated by strong efficiency improvements. There is also a significant increase in electricity demand, but additional demand is mostly met by renewables. As a result, overall primary energy demand in 2040 in the Africa Case is 10% less than in the Stated Policies Scenario (Figure 5.2). 188 Africa Energy Outlook 2019 | Special Report Figure 5.2 ▻ Total primary energy demand by fuel and scenario in Africa Per capita power supply investment by region, 2018 Implications of unsustainable bioenergy use Since 1990, the total forest area in Africa has fallen by 85 million hectares (ha), which is more than the total land area of Mozambique (Figure 5.9). Some countries have been more affected than oth For instance, Nigeria has lost 60% of its forest cover since 1990, while Tanzania and Ethiopia have lost almost 20% of their forest areas FAO, 2019). Conversely, fuelwood consumption (directly used by households for cooking or to produce charcoal) has doubled in sub-Saharan African countries (excluding South Africa) over the same period. While the relationship between deforestation and growing demand for fuelwood is difficult to quantify, efficiency improvements across the various bioenergy value chains could play a significant role in protecting forest biodiversity and carbon sinks. Figure 5.9 ▻ Fuelwood consumption in the Stated Policies Scenario and the Africa Case, and forest area in selected African countries Tanzania Nigeria Kenya Ethiopia 00000 ooooo ooooo ooooo 01 vH 35 u.g/m3) (25-35 u.g/m3) (15-25 u.g/m3) (10-15 u.g/m3) (<10 u.g/m3) Proportion of the population in Africa exposed to high levels of PM2.5 pollution drops in the Africa Case and remains lower than in some Asian countries in the Stated Policies Scenario Notes: AC = Africa Case; ug/m3 = micrograms per cubic metre. Interim targets and Air Quality Guideline refer to World Health Organization exposure thresholds. Source: International Institute for Applied Systems Analys I Implications for Africa and the world 199 Higher emissions of NOx and PM2.5 also take a considerable toll on health and wellbeing. In the Stated Policies Scenario, the increasing concentration of PM2.5 by 2040 means that th number of premature deaths associated with outdoor air pollution increases by almost 60%, reaching 480 000 in 2040. In the Africa Case, emissions of the three major air pollutants decline sharply from the current levels. Reduced exposure to PM2.5 is particularly important: despite a significant increase in energy services, the number of premature deaths associated with outdoor air pollution in 2040 is almost 30% lower than in the Stated Policies Scenario. 5.2.4 Achieving sustainable development goals requires Africa's success In many areas, global energy transition goals are closely linked to successful growth and development in Africa. The continent's economic and social prosperity are in turn closely linked to successful global energy transitions. Two examples highlight the interlinkages between the world and Africa: first, access to modern energy services; and second, Africa's role as a major supplier of the minerals necessary to achieve the global energy transition. More than two-thirds of the world's population without access to electricity and around a third of the population without access to clean cooking live in Africa. By 2030 in the Stated Policies Scenario, most of the remaining population without access to electricity and clean cooking remain concentrated in Africa. Addressing energy access in Africa is therefore of paramount importance to solving this global concern. Boosting energy access rates in Africa brings huge benefits in terms of reduced poverty, lower air pollution and increased economic prosperity. Access to electricity is crucial to the provision of essential services: in health centres, for instance, it is vital for the use of efficient modern equipment, the storage and preservation of vaccines and medicines, and the ability to conduct emergency medical procedures, for example during child birth. Access to clean cooking is essential to reduce the health impacts and the number of premature deaths related to household air pollution In the Stated Policies Scenario, around 20 million people are connected to the electricity network each year, which is less than a third of what would be needed to reach full access by 2030. By 2030, 85% of all people without access to electricity live in Africa (Figure 5.11). In DR Congo, for example, the projected number of people without access to electricit increases by 30% in this scenario, as policies fail to keep pace with population growth. Reaching full electricity access by 2030 as envisaged in the Africa Case requires a tripling of efforts to extend connection to over 60 million people each year. Reaching this level of access would need an additional push for decentralised renewables in the context of a comprehensive set of policies and investments that makes use of all available solutions, with mini-grids and stand-alone systems providing power to more than half of those gaining access by 2030. Energy efficiency also has an important part to play. Delivering access to clean energy in an integrated way would also support economic growth and overall development. Research suggests that access could bring new avenues 200 Africa Energy Outlook 2019 | Special Report of productive employment to remote populations, particularly for women. In addition to freeing up time by speeding up domestic chores and giving women more time to engage in paid jobs, access to electricity can have a particular impact on female-owned businesse helping them to transition from extreme poverty to near middle-class status, as shown recently in Ghana (Power Africa, 2019). Figure 5.11 > Share of population without access to electricity and clean cooking by region in the Stated Policies Scenario 100% 80% 60% 40% 20% Without electricity access Without clean cooking access 2010 2018 2030 2040 2010 2018 2030 2040 I Africa ■ India ■ Southeast Asia ■ Other developing Asia Rest of world Those without access to electricity and clean cooking are increasingly concentrated on the African continent Moreover, electricity can also play an important role in improving agricultural productivity through advanced irrigation techniques, as several successful examples of stand-alone solar water pumps have demonstrated. Cold storage powered by renewable electricity could also reduce post-harvest losses of agricultural outputs, which are currently estimated at 20-50% of the food produced in sub-Saharan Africa (depending on the food type). In the Stated Policies Scenario, Africa is one of the few regions where the number of people without access to clean cooking increases, as the expansion of clean cooking is unable to keep pace with rapid population growth, and around half of the global population without access to clean cooking in 2040 lives in Africa. There are exceptions: Ghana sees a visible improvement in this area, but many other countries are not set to emulate this example. While urbanisation increases the use of alternative options such as LPG and natural gas in many regions, solid biomass (in the form of charcoal) remains the preferred option for cooking in African cities. The Africa Case sees all households across the continent gain access to clean cooking by 2030. This reduces significantly the number of premature deaths linked to indoor air pollution. Resource development, minerals in particular, is another area where Africa and the world share a common interest. From cobalt and manganese for batteries to chromium and I Implications for Africa and the world 201 neodymium for wind turbines, and to platinum for hydrogen fuel cells, minerals are a critical component in many clean energy technologies. As energy transitions accelerate, demand for minerals is set to grow significantly. For example, demand for cobalt from deployment of electric vehicles increases to around 170 kilotonnes per year (kt/year) in 2030 in the Stated Policies Scenario, higher than today's supply capacity, and to almost 360 kt/year in the case of higher electric vehicle uptake (IEA, 2019). Africa is a major producer of many of these minerals: DR Congo accounts for two-thirds of global cobalt production and South Africa produces 70% of the world's plati In 2017, net income from mineral production was equivalent to around 2% of sub-Sahara Africa's GDP and minerals accounted for some 20% of total merchandise exports in Africa (77% in the case of DR Congo). Rising demand for minerals means that successful global energy transitions offer an opportunity for economic growth in mineral-rich countries in Africa. For example, if DR Congo were to maintain today's share in global production, growing global demand for cobalt would bring additional revenue of $4-8 billion to the country in 2030 (based on today's prices), equivalent to around 3-6% of the country's projected GDP in that year. However, there are large question marks over whether African countries can keep up with rising global demand in a timely and sustainable manner. Current practices are often inefficient, polluting and subject to social protests. Given that African countries account for a large proportion of the global production of key minerals, failure to keep up with demand could not only hamper Africa's economic outcomes but also hold back the pace of global energy transitions (Figure 5.12). Figure 5.12 Composition of Africa's merchandise exports, 2017, and key minerals production, 2018 Share of minerals in merchandise exports DR Congo South Africa Africa Cobalt Manganese Platinum Minerals Other Share of Africa in key minerals production I Africa I Rest of world 20% 40% 60% 80% 100% Responsible and sustainable development of Africa's mineral resources is vital for Africa's economic prosperity and global energy transitions Source: IEA analysis based on UNCTAD Stats (2019) and USGS (2019). 202 Africa Energy Outlook 2019 | Special Report Putting in place structures and governance arrangements to ensure responsible minerals development would help guard against a range of potential problems. Robust regulatory and oversight mechanisms would be needed to ensure that impacts on local environments are minimised and that revenues are used in a transparent manner. There is also a need for careful scrutiny of how minerals are sourced and how supply chains are managed. Those who use minerals can play a helpful role, as can international financial institutions. For example, BMW, BASF and Samsung recently launched a pilot initiative to support sustainable and fair cobalt mining in DR Congo, which aims to improve working and living conditions for small-scale mining operations and surrounding communities. The World Bank has launched the Climate-Smar Mining Facility to help minimise the environmental and climate impacts of mining activities. As in so many other areas, the future of Africa's development and the prospects for global sustainable growth are closely interlinked. | Implications for Africa and the world 203