The African energy
- pportunity
opportunity Abidjan, March 21 st , 2016 Africas energy gap: The - - PowerPoint PPT Presentation
The African energy opportunity Abidjan, March 21 st , 2016 Africas energy gap: The costs of the divide 89 93 621 60% 60% 4/5 BILLION MILLION MILLION US dollars of Of SSAs energy Africans do not Nigerians lack petroleum have
2
MILLION
Africans do not have access to electricity Of SSA’s energy is consumed by South Africa
60%
OF THE POPULATION (727 MILLION)
Rely on solid biomass, mainly fuel wood and charcoal, for cooking
In Africa, the poorest households spend
X20
MORE PER UNIT OF ENERGY THAN THE WEALTHIEST HOUSEHOLDS with connection to the grid
AFRICANS ARE KILLED EVERY YEAR
By air pollution caused by the use of solid biomass for cooking
On current trends, it will take Africa until
TO ACHIEVE UNIVERSAL ACCESS TO ELECTRICITY
BILLION
US dollars of petroleum exported by Nigerian in 2013 Nigerians lack access to electricity
60%
MILLION
OF PRIMARY SCHOOLS HAVE NO ELECTRICITY
In 9 African countries, more than SOURCE: Africa Progress Panel
3
We are already seeing a seismic shift in the energy landscape in Africa The investment gap is massive and is a central priority for change – also, it is a key driver of innovation The fundamentals driving these shifts are expected to continue to accelerate As a result, new energy solutions are already emerging and some are delivering at surprisingly large scale There is still lots of work to do, but Africa is beyond the point of no return
4
2014, World average: 79GJ/capita
SOURCE: Enerdata (2015), Historic actuals; UN Population Division (2015), World Population Prospects: The 2015 Revision. XX Average per capita primary energy consumption GJ/capita 1 2013 due to limited data
290 130 221 93 28 37 62 229 294 China Indonesia India United States European Union Ethiopia Brazil Saudi Arabia 219 Russia 113 South Africa 63 Mexico Australia 31 Nigeria 144 Japan 31 Colombia 81 Argentina
5
SOURCE: Africa Power Plants Database - UDI
MW installed
427 719 748 739 2 691 4 166 2 199 3 720 2005 1 200 1 544 634 1 547 1 094 766 1995 2 964 2 765 318 1 629 2000 191 536 2 123 1990 504 1985 2 700 3 461 2010 3 249 2 279 3 232 1 256 3 014 521 2014
Public sector Private sector
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SOURCE: Bloomberg; World Development Indicators; IHS Global Insight; Global Terrorism database
Evolution of energy supplied – “aggressive solar” Implied incremental capacity additions
1 2010 values are actual; 2020 to 2040 are forecasts. Figures may not add up due to rounding 2 Based on differentiated load factors by technology: coal = 80%; gas = 85%; geothermal = 80%; wind = 25%; hydroelectric = 45%; solar = 20%
Commodity slump TWh of energy1 GW of capacity2
725 1,616 2040 2030 1,079 2020 444 2010
Gas Coal Imported fuels2 Hydro Geothermal Nuclear Wind Solar
2040 161 2030 50 68 2020
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SOURCE: McKinsey African Regional Electricity Model (AREM); WEO IEA Africa Energy Outlook 2014; Africa Progress Panel 2015; Brighter Africa 2014 1 2010 values are actual; 2020 to 2040 are forecasts. Figures may not add up due to rounding; 2 IEA Africa Energy Outlook 2014 estimates; 3 Africa Progress Panel numbers are for 2015-2030
Investment in power sector p.a. USD billion Capital investment 2014-2040 USD billion Target electrification rate %
8 IEA African century case 77 IEA new policies scenario 60 Africa Progress Panel 55 Brighter Africa report 33
845 14303 1624 2084 71 100 73 85
Current annual spend
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Seismic shifts in delivered electrification Increased emergence of micro scale projects, which are easier to finance Electricity increasingly becoming top priority for donor organizations Pay-Go models increasingly becoming financially viable
845 437 291 286 13 2012 14 15 New connections per year in Kenya 000s
50 MW 50 x 1 MW VS.
9
SOURCE: McKinsey 1 Remaining cost components refer to power control system (PCS), communication & control, ancilliary activities and service costs (bottom to top)
381 256 145 108 50 Storage installation 940 63 122 22 161 195 30 32 34 88 40 67 28 5
Horizon 1: 2015–20202 11 11 2015 price Horizon 3: 2026–304 100-125 ~50 Horizon 2: 2021–253 18 17 12 Cells BMS Pack Separator Cu foil Anode Full system Full system Cathode Electrolyte Other Material Cell manufacturing Al foil Cell overhead Horizon 1 (2015-2020) Technology matures Horizon 2 (2021-2025) Continued Improvements Horizon 3 (2026-2030) Innovative technologies 381 Storage costs1 USD/kWh Pack price evolution at 70% depth of discharge USD/kWh
Material and component cost reductions Manufacturing and overhead improvements Technology improvements
10
Domestic policy/ regulatory environment Financing
distribution grid Role of the private sector and role of the utility
Rural electrification
managed and delivered Political will
political cycle
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It is time to take decisive action and turn around the narrative: to light up and power Africa – and accelerate the pace of economic transformation, unlock the potential of businesses, and drive much needed industrialization to create jobs AfDB President - Akinwumi Adesina