It is truly a delight to discuss the global energy transition particularly as it concerns African States. As a global community, we are witnessing incredibly frightening climate signals that indicate the need for accelerated climate action.
In Africa, we are seeing the rapid shrinking of the remaining glaciers in eastern Africa; painfully dry conditions in the northern coast of the Gulf of Guinea, in north-western Africa and along the south-eastern part of the continent; and higher-than-normal precipitation accompanied by extensive flooding in other regions.
In practical terms, we know that changing precipitation patterns, rising temperatures and more extreme weather are contributing to mounting food insecurity, poverty, instability, and displacement on the continent. For instance, the Sahel region has recorded vegetation loss leading to a sharp rise in conflicts between farmers and herders. And Southern Madagascar is experiencing what the United Nations is calling the world’s first climate change-induced famine. And in Nigeria, we are confronted with desertification in the North, floods in the centre, pollution and erosion on the coast.
While energy is critical to almost all conceivable aspects of development there is also no question that the transition from polluting fuels to clean energy is fundamental to arresting the climate crisis. The energy sector is the largest single source of greenhouse gas emissions. Energy consumed for electricity, heat and transport accounts for over 70% of global emissions. Even though the climate case for the energy transition is clear, the significant role of fossil fuels persists due to the existence of other pressing challenges. These challenges are described in energy circles as the “energy trilemma.” How to find a balance between security, affordability, and sustainability in how we access energy within the energy transition process. In addition to this tangled trilemma, a fourth element that focuses on people and their involvement in the energy industry adds a bit more complexity.
There are increasing calls to ensure the social protection and reskilling of workers in sectors to be displaced by the global transition. The focus has mainly been on coal communities and following pledges by more than 40 countries to shift away from coal, several nations agreed to the Just Transition Declaration at COP26 in Glasgow.
But the energy trilemma conversation gives little or no consideration to the problem of energy access. This is the problem in most of Africa. Indeed, the global approach to the energy transition largely fails to draw attention to the needs of the poorest and the embedded inequalities of the global energy system. In 2020, Sub-Saharan Africa had 568 million people without access to electricity. This represents more than three-quarters of the world’s total unelectrified population.
On the other hand, most developed nations have 100% energy access. Surely the race to net-zero must not leave people in the dark. Also, Sub-Saharan Africa remains the only region in which the number of people without access to clean cooking fuels and technologies is rising. 19 of the 20 countries with the lowest clean cooking access rates are in Africa.
In practical terms, these energy deficits produce staggering effects. For instance, the clean cooking deficits lead to millions of premature deaths from household air pollution in Sub-Saharan Africa annually. Furthermore, gender inequities are exacerbated, and millions of women and children suffer from critical health conditions. Due to the electricity deficits, half of secondary schools and a quarter of health facilities in Sub-Saharan Africa have no power.
Energy sector bottlenecks and power shortages cost the region 2-4 percent of GDP annually. These shortages hinder positive educational outcomes, erode profits of small and medium businesses, frustrate productive capacity, cripple entire industries and put countless lives at risk. Furthermore, though Africa’s current unmet energy needs are huge, future demand will be even greater as populations expand, people move into the middle class and rapid urbanization continues.
Mitigation efforts such as the electrification of heating, cooking and transportation will also require more energy and so will adaptation efforts like keeping people cool and safe in a warming climate.
How we manage the global energy transition must be sensitive to Africa’s priorities. The global energy transition must place energy access for both consumptive and productive uses at the heart of climate action.
In many ways, there are already clear synergies between energy access and climate goals. Universal access to sustainable electricity and clean cooking will eliminate deforestation for firewood, burning of firewood and the use of diesel/petrol generator sets which are among the largest contributors to emissions on the continent.
Renewable technologies like solar home systems and mini-grids are increasingly the least-cost technologies for electrifying populations in rural areas and nearly 80% of those lacking access to power across sub-Saharan Africa live in rural areas.
However, energy access must go beyond the provision of ‘one light’ solutions and become more ambitious in the quality and quantity of energy provided.
Africa needs more energy, and we require external support and policy flexibility to deliver this. This is important to highlight because in the wider responses to the climate crisis, we are not seeing careful consideration and acknowledgement of Africa’s aspirations.
For instance, several Western nations introduced restrictions on the use of development funds for natural gas infrastructure in Africa. While the United States and others have crafted policies that include exceptions, the intended flexibility is not yet clear or seen in practice. Limiting the development of gas projects, as a critical energy transition pathway for Africa, violates enshrined principles of equity and justice, and poses dire challenges for African nations, while making an insignificant dent in global emissions.
Africa has contributed the least of any global region to greenhouse gas emissions and currently emits under 4% of global emissions. Under no plausible scenario are Africa’s emissions a threat to global climate targets. Unfounded predictions should not serve as excuses to limit our energy technology options.
Countries including the U.S, China, Japan, and large parts of Asia and the EU include gas as a major pillar of their multi-decadal decarbonization strategies, including actively using African gas from countries like Mozambique, Ghana, Senegal, and Nigeria.
Limiting financing of gas projects for domestic use in Africa would pose a severe challenge to the pace of economic development, delivery of electricity access and clean cooking solutions, and the scaleup and integration of renewable energy into the energy mix.
Policy flexibility as in the case of Natural Gas is just one example. Another is the issue of financing. A balanced and just approach to the energy transition recognizes that finance is key. Lack of access to finance remains the biggest challenge for accelerating action on energy access and climate goals in Africa. Yet, there is currently a dramatic mismatch in energy investments.
Of the $2.8 trillion invested in renewable energy from the year 2000 to 2020, only about 2%, $60 billion, came to Africa. It has been estimated by the International Energy Agency that Africa will need around $133 billion annually in clean energy investment to meet our energy and climate goals between 2026 and 2030. However, annual investment in renewable energy stands at only $9.4 billion. Making capital available in Africa for the buildout of energy systems is central to reaching the goals of the Paris Agreement.
Additionally, for African countries, the cost of finance and perceived investment risk remain significantly higher than for developed economies, despite the vast improvements in stability and governance.
Africa still suffers from the perception that it is high risk, even though project finance defaults on the continent are the lowest globally. This affects all energy investments, but it is more critical in the case of renewables like solar, wind and battery storage because these are all heavily weighted toward upfront capital expenditures.
Loan guarantees and other de-risking tools are thus essential for clean energy deployment. In Nigeria, loan guarantees have been crucial in unlocking thousands of clean connections in key energy access projects such as our #SolarPowerNaija project which seeks to electrify up to 5 million households.
In addition to conventional capital flows both from public and private sources, it is also essential that Africa can participate more fully in the global carbon finance market. Supporting Africa to develop into a global supplier of carbon credits – ranging from biodiversity to energy-based credits would be a leap forward in aligning carbon pricing and related policy and around achieving a “just transition.”
Finally, to ensure a global energy transition that is favourable to us, African nations need to engage more critically and vocally on this matter. Fortunately, this is underway with certain countries including Nigeria developing and signing on to the Kigali Communiqué which came out of the Sustainable Energy for All Forum in June and outlines principles for a just and equitable energy transition.
We must take ownership of our transition pathways and design climate-sensitive strategies that address our growth objectives. We must clearly and thoroughly articulate our priorities, strategies and needs.
I am proud that Nigeria is leading the charge on this with the development of our Energy Transition Plan. Our plan outlines pathways to universal energy access by 2030 and net-zero by 2060. In addition, it also highlights important specificities such as the role Natural Gas must play as a transition fuel in Nigeria on the path to net-zero and the need for a coordinated approach to job protection and the reskilling of workers due to expected job losses in the oil and gas sector.
Perhaps most significantly, the plan also provides a clear financial estimate for the achievement of Nigeria’s energy access and transition goals. Nigeria’s Energy Transition Plan finds that an additional $10 billion over business as usual is required annually till 2060 to shift the entire economy to a net-zero pathway. The value of having a nation-specific, data-driven plan as the basis of our activities and engagements cannot be overemphasized. We hope to see more of such plans all over the Continent.
The current energy transition is an opportunity like none other for the preservation of the planet, but it can also be a vehicle for unlocking the development potential and livelihoods of millions of people. There is no reason why we cannot have both.
The global community must account for diverse realities and accommodate various pathways to net-zero, particularly for African nations which need financial and technical support as well as the flexibility to develop as swiftly as possible. This will ensure a fair and balanced energy transition that leaves no one behind.
By His Excellency, Prof. Yemi Osinbajo, San, Gcon,
Vice President of the Federal Republic of Nigeria