Background
In July 2016, the United Nations General Assembly (UNGA) adopted the resolution A/RES/70/293 proclaiming the period 2016-2025 as the Third Industrial Development Decade for Africa (IDDA III). Since the passing of the resolution, four high-level events have been organized by UNIDO together with its partners on various themes related to Africa’s industrial development on the margins of the UNGA.
Theme of the high-level event
The theme for this year’s event is “Accelerating energy access and green transition for Africa’s inclusive and sustainable industrialization”.
Renewable energy deployment and energy efficiency interventions are part of the key focal areas stipulated in the IDDA III resolution. It is also part of the priorities included in key development frameworks on Africa including inter alia, Africa Union (AU) Agenda 2063, its first Ten Year Implementation Plan and the AU Action Plan for Accelerated Industrial Development for Africa program cluster – “Promote Infrastructure and Energy for Industrial Development.” Furthermore, as Africa started trading under the African Continental Free Trade Area in January 2021, it is pertinent to boost industry, manufacturing, and other productive activities. The operations of these require a reliable, available, and affordable supply of energy to industrial and end-users.
This high-level event offers a timely occasion to discuss challenges and opportunities to “energize” industry and the manufacturing sector. The outcomes of this event will provide insights to the preparations for the African Union Summit on Industrialization and Economic Diversification, scheduled for November 2022 in Niger.
- Africa’s Energy Resources: The continent has enormous energy resources and renewable energy potential. According to African Development Bank (AfDB), Africa has almost unlimited solar potential (10TW), abundant hydro resources (350 GW), wind (110 GW) and geothermal energy sources (15 GW). Additionally, Africa has impressive hydrocarbon reserves accounting for 13 per cent of the world’s natural gas and 7 per cent of the oil resources. It also has proven reserves of critical metals, which are essential for the development of renewable energy generation systems.
- Energy Access and Use: Africa has achieved some progress over the years, in terms of energy access and use. However, compared to other regions, Africa has the lowest per-capita energy use. Approximately 600 million people lack access to electricity, whereas 890 million people cook with traditional fuels (IEA, 2022). IEA estimated that in 2021, the number of people without access to electricity would increase by 4 per cent. Under the current and planned policies, (further affected by the COVID-19 crisis), an estimated 660 million people would still lack access in 2030, most of them in sub-Saharan Africa (WB, 2022) and more than 970 million people in the continent lacked access to clean cooking. This has serious implications for the continent as a whole.
- Africa’s Energy Future: Africa’s annual energy demand has been increasing by around 2.4 per cent, with a corresponding growth in the use of electricity, which is around 2.3 per cent per year. . Industries are the leading cause of the rising demand for energy. The sector consumes two thirds of energy for productive uses in Africa. The Africa Energy Outlook 2022 foresees a surging energy demand in industry, freight and agriculture by almost 40 per cent through to 2030. Therefore, the electrification of the energy sector, powered by renewables, energy efficiency, digitalization and technological leapfrogging will paramount for Africa’s economic and industrial progress.
- Though Africa’s share in the global carbon emissions is negligible (2-3 percent), the detrimental impact of climate change is already being felt. In sub-Saharan Africa, climate change could further lower gross domestic product (GDP) by up to 3 percent by 2050. Climate change is estimated to cost the region US$40 billion each year to 2030.
- Though there are serious challenges to achieve a fast and sustainable green transition in Africa, there are also opportunities. The absence of large-scale legacy systems provides a timely opportunity to develop and establish low carbon energy generation systems, as well as energy efficient industrial and manufacturing processes. Africa can strategically position itself within the global economy by embracing a green energy transition, while acquiring new jobs, skills and technologies that enhance a sustainable industrialization on the continent.
- Renewable energy sources provide an opportunity for developing countries and transitioning economies to champion a low carbon pathway powered by innovative, smart, and locally relevant energy solutions. Renewable energy has a great potential to help countries become less dependent on energy imports, create jobs, and mitigate climate change, while contributing to prosperity.
- Innovative business models powered by renewable energy: In order to accelerate the adoption of renewable energy technologies, business models for renewable energy production as a viable industry should be further promoted, giving rise to energy entrepreneurs, independent power producers and converting the agricultural industry into rural energy enterprises. Creating an enabling policy and market environment for such activities but also developing technical capacity and business skills are indispensable for a new energy economy in Africa. Business partnerships should be further encouraged to create new and innovative business structures.
- Potential of renewable energy in SMEs: As SMEs make up 90 per cent of the private sector and provide an estimated 80 per cent of jobs across the African continent, mainstreaming the use of renewable energy in industrial applications can offer a great opportunity to increase their competitiveness and reduce dependence on fossil fuels. In order to assure that SMEs can successfully engage in their productive activities, the promotion of efficient patterns of energy use through renewable energy, such as fuel-switching from fossil fuels to locally available renewable sources, is necessary for the context of Africa.
- Energy efficiency in industry contributes to decoupling economic growth and environmental impact while reducing industrial energy intensity and improving competitiveness. The industrial sector is responsible for more than one third of global primary energy consumption and energy-related carbon dioxide emissions.
- According to IEA, it has been estimated that industry has the technical potential to decrease its energy intensity and emissions by up to 26 per cent and 32 per cent providing a striking 8 per cent and 12.4 per cent reduction in total global energy use and CO2 emissions. Improving energy efficiency in industry is one of the most cost-effective measures to help supply-constrained countries in Africa meet their increasing energy demand. Industrial energy efficiency also fosters economic growth, environmental sound management, pollution abatement and climate change mitigation.
- To accelerate the clean energy transition from fossil fuels, the potential of GH2, produced from renewable energy (e.g., solar wind or hydropower), is gaining traction. With decreasing costs for renewable electricity and technological advancements, GH2 is expected to expand rapidly and is predicted to cover 21 per cent of the world’s total final energy consumption by 2050. Green Hydrogen will play a critical role in the decarbonizing industry, especially in the energy-intensive or difficult to abate sectors such as cement, chemicals, transportation, and steel. Green Hydrogen can contribute to a clean, carbon-neutral industry and can be a long-term option for energy storage on a large scale.
- Green Hydrogen can help African countries achieve energy transition, enhance their national energy security, and address climate mitigation objectives. Admittedly, in order to facilitate the adoption of green hydrogen in Africa, there is a need to conduct in depth technical and financial feasibility of the technology. As hydrogen technologies are maturing and prices expected to become competitive, it is useful to develop and apply conducive energy and industrial policies, robust legal frameworks, and coherent international standards for the global uptake of Green Hydrogen.