Africa Energy Outlook 2014 - A focus on energy prospects in sub-Saharan Africa

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
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3. Rich in resources
Gas
Fossil fuels
In the last 5 years, almost 30% of global oil & discoveries were in sub-Saharan Africa;
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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%.
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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
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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
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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
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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
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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
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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
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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
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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)
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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
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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
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15. Energy can build
a shorter path to prosperity
5
4
3
2
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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.
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