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Africa Energy Outlook

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Africa Energy Outlook 2014 - A focus on energy prospects in sub-Saharan Africa
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  • 1. London, 13 October 2014 © OECD/IEA 2014
  • 2. The sub-Saharan context  GDP is rising, but almost half of a fast-growing population lives in extreme poverty: energy is vital to the prospects for development  Region accounts for 13% of global population, but only 4% of its energy demand: half of this is biomass  Poor electricity infrastructure is a key impediment to growth  Large resource base, exploited only in part in the case of oil, gas & coal, largely untouched in renewables  Domestic energy reforms gaining speed, but two-thirds of energy investment since 2000 went to develop resources for export © OECD/IEA 2014
  • 3. Rich in resources Gas Fossil fuels In the last 5 years, almost 30% of global oil & discoveries were in sub-Saharan Africa; © OECD/IEA 2014 Hydro Wind Oil Oil Oil OilGas Gas Oil Coal Solar the region has vast untapped renewables potential, notably hydro & solar
  • 4. Share of population with access to electricity: More than 50% In sub-Saharan Africa, 620 million people – two-thirds of the population – live without electricity. Only a handful of countries have electrification rates above 50%. © OECD/IEA 2014 Less than 50% Rich in resources, but poor in supply
  • 5. Biomass remains at the centre of the sub-Saharan energy mix Biomass Oil Coal Modern renewables © OECD/IEA 2014 Total primary energy demand in sub-Saharan Africa 300 400 500 Mtoe 100 200 Gas Nuclear 2012 Additional demand in 2040 Mtoe Reliance on fuelwood and charcoal remains high, even as incomes grow; 650 million people still cook with biomass in an inefficient & hazardous way in 2040
  • 6. Power to shape the future © OECD/IEA 2014 Installed power generation capacity by fuel in sub-Saharan Africa 2012 capacity: 90 GW Other renewables Coal 45% Hydro 22% 0% Gas, 14% Nuclear, 2% Oil, 17% 2040 capacity: 380 GW Coal 22% Gas 25% Oil 7% Bioenergy, wind geothermal 8% Solar 12% Hydro 24% Nuclear 2% Renewables account for almost half the growth in overall power supply & for two-thirds of the mini-grid and off-grid systems installed in rural areas
  • 7. Different paths to power across the continent 600 500 400 300 200 West 150 120 90 60 Central 300 250 200 150 100 East Nuclear 1 000 800 600 Other renewables Gas 200 Oil Solar PV Southern The power mix by subregion reflects local resource endowments; well-functioning regional power pools help to unlock new projects, lower costs & improve reliability © OECD/IEA 2014 100 2000 2020 2040 TWh 30 2000 2020 2040 TWh 50 2000 2020 2040 TWh Coal Hydro 400 2000 2020 2040 TWh
  • 8. Minor cause, but major effect Gt CO2 © OECD/IEA 2014 Cumulative CO2 emissions, 1890-2012 400 350 300 250 200 150 100 50 United States European Union China India Middle East Sub-Saharan Africa Sub-Saharan Africa is on the front line to feel the effects of a changing climate but, even with an extra 25 Gt to 2040, accounts for only a marginal share of emissions
  • 9. A changing balance to oil production © OECD/IEA 2014 Oil production in sub-Saharan Africa Production: Other Angola Nigeria 7 6 5 4 3 2 1 2000 2013 2020 2030 2040 mb/d The region remains a major global supplier, although regulatory uncertainty, unrest & oil theft in Nigeria make Angola the main producer of crude oil until the 2020s
  • 10. A new global gas player United States Sub-Saharan Africa © OECD/IEA 2014 Increase in gas production in selected countries and regions, 2012-2040 Angola Mozambique Nigeria Other Tanzania 50 100 150 200 250 Russia Australia North Africa bcm LNG export is the anchor for the east coast gas discoveries , but half of the overall increase in gas output goes to domestic power generation & industry
  • 11. Sub-Saharan Africa turns to Asia 180 150 120 90 60 30 © OECD/IEA 2014 Sub-Saharan fossil fuel export revenues Revenue from European & Atlantic basin markets Revenue from Asia-Pacific markets 2005 2013 2040 180 150 120 90 60 30 2005 2013 2040 Coal Natural gas Crude oil Export destinations for all fossil fuels switch towards Asia-Pacific markets: gas & coal volumes rise, but oil exports tail off as more crude is refined within the region Billion dollars (2013) Billion dollars (2013)
  • 12. Investment has to come home Billion dollars (2013) © OECD/IEA 2014 Average annual investment in sub-Saharan energy supply For export For consumption within sub-Saharan Africa: Fuels Electricity 120 100 80 60 40 20 ⅔ ⅓ ⅔ ⅓ 2000-2013 2014-2035 In a reversal of current trends, 2 out of 3 future investment dollars produce energy for sub-Saharan consumers, but this is still not enough to meet their needs in full
  • 13. A large step towards universal access, but still a long way to go Million 1 800 © OECD/IEA 2014 Access to electricity in sub-Saharan Africa 2012 2020 2025 2030 2035 2040 1 500 1 200 900 600 300 Population with electricity access Population without electricity access Nearly 1 billion people gain access to electricity, but this still leaves 530 million, primarily in rural communities, without power in 2040
  • 14. How could energy make the 21st an African Century?  Energy could do more to act as an engine of inclusive economic and social growth  An African Century Case assesses the impact of faster movement in three key areas:  An upgraded power sector; reducing power outages by half & achieving universal access in urban areas  Deeper regional co-operation; expanding markets & unlocking a greater share of the continent’s hydropower potential  Better management of resources & revenues; more efficiency & transparency in financing essential infrastructure © OECD/IEA 2014
  • 15. Energy can build a shorter path to prosperity 5 4 3 2 © OECD/IEA 2014 Outcomes in the African Century Case, 2040 700 600 500 400 300 200 100 Million people Without access to electricity Main Scenario African Century Case 210 180 150 120 90 60 30 By increasing the coverage & reliability of energy supply, the African Century Case unlocks an extra decade’s worth of growth in per-capita incomes by 2040 1 Thousand dollars (2013, MER) GDP per capita Billion dollars (2013) Government revenues from oil & gas production
  • 16. Conclusions  Energy is a cornerstone of sub-Saharan strategies for poverty reduction & economic growth  Improvements in sector governance are needed to bring in new energy investors & kick-start development  More efficient & sustainable use of biomass will create a more healthy domestic energy balance  Sub-Saharan Africa remains a mainstay of global oil production & emerges as a major player in natural gas  Concerted action to improve the functioning of the energy sector is essential if the 21st is to become an African century. © OECD/IEA 2014
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