Electrifying Africa is going to be one of the biggest challenges (and opportunities) of the clean energy era. In order to build a carbon-free economy, Africa has to “leapfrog” over what is normally the next phase of development in a nation’s economic journey. At present, 600 million people across the African continent still lack access to energy. But instead of looking to cheap and abundant fossil fuel sources to kickstart economic development as other nations have historically done, African leaders are facing the necessary and virtually unprecedented step of skipping straight to cutting-edge green technologies.
It’s not going to be easy. Africa faces a challenging energy trilemma: as demand for energy grows, they must ensure that energy supplies are 1) sufficient, 2) affordable, and 3) sustainable. This is going to be difficult as the continent’s population continues to boom, and meeting demand through any kind of energy production – clean or otherwise – will prove to be a challenge. Projections show that by 2050, one in four humans worldwide will be in sub-Saharan Africa. This population growth coupled with ongoing industrialization means that African energy demand is expected to increase by a third over the next ten years. This will necessitate a ten-fold increase in power generation capacity by 2065.
The good news is that the African continent has enormous renewable energy potential. The continent’s richness of resources for solar, wind, hydropower, and geothermal, as well as its enormous and growing demand make it prime real estate for investors looking to get in on the ground floor of what is certain to be a major and fast-growing emerging market. Already, foreign investors are flooding into African energy sectors trying to establish influence in these early days of what could be a very lucrative industry.
China and Russia have been facing off for dominance of the African nuclear power industry for years, and the European Union has recently started pushing into North African markets in search of sufficient space and sun to meet their own solar power needs. Now the United States is trying to get a foothold in African energy as well, but it might already be too late.
According to a recent report from Nikkei Asia, China already holds the upper hand in what is developing to be a battle with the United States for Africa’s energy. Chinese companies are already heavily involved in the funding and construction of major power projects around Africa including the Mambila Hydropower Project in Nigeria and the Grand Ethiopian Renaissance Dam in Ethiopia. “Chinese companies have already secured deals to supply energy to more than 15 African countries, with a total capacity of over 10,000 MW,” Nikkei Asia goes on to report. “By contrast, the U.S. has only secured deals to supply energy to three African countries, with a total capacity of just over 1,000 MW.”
According to figures from the Atlantic Council, a U.S.-based think tank, Chinese investments in sub-Saharan Africa energy infrastructure have grown tenfold in the last decade to reach a whopping $14.5 billion. Along with its strong presence in the energy industry, Beijing is also seeking to expand its military presence on the African continent. The Atlantic Council reports that China’s growing influence in this sphere could pose a notable threat to U.S. interests.
China’s growing energy influence on the global stage should come as no surprise. Beijing’s assertive Belt and Road Initiative, which involves Chinese investment in around 70 countries and international organizations, has been public knowledge since it began in 2013. Since then, China has made huge and entirely predictable inroads into global power markets. Any threat to the United States’ agenda could have easily been foreseen and forestalled.
China’s growing presence may be problematic for Africans as well. “These include concerns about debt sustainability, environmental impact, and the potential for Beijing to use its energy investments as leverage for political gain,” reports Nikkei. Of course, some of these concerns would be the same were the United States to be at the helm in place of China. International developers stress that African countries must be in control of their own development lest they be exploited for their abundant energy resources. Indeed, there is valid concern that internationally developed energy projects will direct that energy to their own markets rather than into the African grids that so desperately need it.
The problem is that it’s hard to find funding with no strings attached. And even those organizations that do seek to promote African sustainable development for Africa’s sake – as the World Bank purports to do – are being outspent and out-maneuvered by Beijing.
By Haley Zaremba for Oilprice.com
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