This archive report was first published on 9 August 2019.
Published on August 9, 2019, a week after Kenya announced its first crude oil consignment sale, Zimbabwe tripled its electricity prices amidst a severe shortage.
Meanwhile, Rwanda, Tanzania, and Burundi signed commitments for the 83MW Ruzizi hydropower plant, while Nigeria agreed with Siemens to deliver over 25,000MW, with a third expected on the national grid by 2021.
Kenya's Lake Turkana Wind Power project connected 310MW to the national grid, and 79MW came online from the Olkaria geothermal fields.
South Africa's government invested $4.2 billion to rescue power utility Eskom, while Zambia shut down the Kariba Dam to generate more power in Mozambique and resell it to Lusaka due to a drought.
These developments highlight the complex energy landscape in Africa, where affordability, new investments, changing matrices, and climate change threats converge.
Despite continuous investments, power remains unaffordable to a majority of the population, whose access is also limited by irregular distribution of transmission lines.
The direction Africa should take to meet its power needs is unclear, with solutions like clean coal and nuclear being phased out globally, while renewables like solar, wind, and hydro require significant investments and are largely imported.
According to the US Energy Information Agency, Africa's energy consumption per person will still be half of India's by 2040, assuming an economic growth of five percent driven by private investment and personal consumption.
Already, Africa's mining sector contributed more to growth than China and India in 2015, while its construction, services, and agriculture sectors were similar to India's.
However, Africa's manufacturing share of output was only a third of China's and half of India's, making its growth the key determinant of Africa's future energy consumption demand.
The launch of the Africa Continental Free Trade Area in July aims to raise the share of trade within the continent from 16 percent to 56 percent by 2025, presuming a manufacturing-led growth.
Yet, the sector most undone by unreliable and costly power across the continent targets a production capacity of 30,000MW by 2030.
Africa's economic powerhouses, Egypt and South Africa, had taken a lead in the continent's industrialization on the back of hugely subsidized power, but that advantage appears to have been eroded.
Civil strife in resource-rich countries like the Democratic Republic of Congo means that manufacturing has not started scratching the surface of its potential.
Power shortages or pricing are already a big deal for industries in Kenya, South Africa, and Zimbabwe, despite government efforts to implement preferential tariffs.
East Africa is projected to have a surplus of 3,430MW above peak demand by 2025, but getting power to the remotest places, known as the last mile, is now the greatest challenge for governments.
Only 40 percent of Africa's billion-plus population has access to electricity, and its distribution is skewed in favor of urban areas.
According to Research and Markets, annual investments of up to $4.3 billion are required from the private sector to support the Africa Union's goal of connecting 60 million more people to the national grid by 2030.
Key transmission projects include 6,500km of high-voltage lines and 46,000MVA transformer capacity in South Africa by 2028 and 190 new integrated projects in Nigeria.
For areas not economically served by a national grid, minihydros, solar farms, and biofuels are emerging as alternatives, especially for domestic and stand-alone factory use.
Solar power has grown from 0.1 percent of global power generation to 2.2 percent in 2018 and is expected to grow steadily, driven by a sharp drop in installation costs.
Latest tenders under the World Bank-backed Scaling Solar Programme in Ethiopia, Madagascar, Senegal, and Zambia were awarded at around 4 US cents per kilowatt hour.
