Presentation WAME workshop May 14 2015

1. © OECD/IEA 2014
Dan Dorner
Global Energy Economics Directorate
Milan, 14 May 2015

2. © OECD/IEA 2014
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 energy 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

3. © OECD/IEA 2014
Rich in resources
In the last 5 years, almost 30% of global oil & discoveries were in sub-Saharan Africa;
Hydro
Wind
Oil
Oil
Oil
OilGas
Gas
Oil
Coal
Gas
Fossil fuels
Solar
the region has vast untapped renewables potential, notably hydropower & solar

4. © OECD/IEA 2014
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%
Less than 50%
More than 50%
Share of population with
access to electricity:
Rich in resources, but poor in supply

5. © OECD/IEA 2014
Power to shape the future
Installed power generation capacity by fuel in sub-Saharan Africa
Renewables account for almost half the growth in overall power supply,
but fossil fuels are prominent in some countries
Coal
45%
Gas, 14%
Oil, 17%
Nuclear, 2%
Hydro
22%
Other renewables
0%
2012 capacity: 90 GW
2040 capacity: 380 GW
Coal
22%
Gas
25%
Oil
7%
Hydro
24%
Solar
12%
Nuclear
2%
Bioenergy, wind
geothermal
8%

6. © OECD/IEA 2014
Different paths to power
across the continent
The power mix by sub-region reflects local resource endowments; well-functioning
regional power pools help to unlock new projects, lower costs & improve reliability
100
200
300
400
500
600
2000 2020 2040
West
TWh
30
60
90
120
150
2000 2020 2040
Central
TWh
50
100
150
200
250
300
2000 2020 2040
East
TWh
Coal
Oil
Gas
Nuclear
Hydro
Solar PV
Other
renewables
200
400
600
800
1 000
2000 2020 2040
Southern
TWh

7. © OECD/IEA 2014
Important role for renewables beyond
the grid
Technology mix for mini-grids and off grids in sub-Saharan Africa, 2040
Renewables – led by solar and hydro – account for two-thirds of the
electricity supplied by mini-grid & off-grid systems
35%
47%
12%
4%
2%
Off-grid: 12 TWh
32%
37%
20%
8%
3%
Oil
Solar PV
Hydro
Wind
Bioenergy
Mini-grid: 26 TWh

8. © OECD/IEA 2014
The most cost-effective way to expand
electrification varies
Optimal split by grid type in Nigeria, given expected expansion of transmission lines
In Nigeria, higher population density and wider grid coverage favour on-grid supply;
where grid extensions are not cost-effective, mini-grids tend to be preferred
Source: IEA in collaboration with the KTH Royal Institute of Technology, division of Energy Systems Analysis.

9. © OECD/IEA 2014
The most cost-effective way to expand
electrification varies
Optimal split by grid type in Ethiopia, given expected expansion of transmission lines
The overall population density of Ethiopia is half that of Nigeria meaning that mini-
and, especially, off-grid solutions play a much more prominent role
Source: IEA in collaboration with the KTH Royal Institute of Technology, division of Energy Systems Analysis.

10. © OECD/IEA 2014
A large step towards universal
access, but still a long way to go
Access to electricity in sub-Saharan Africa
2012 2020 2025 2030 2035 2040
300
600
900
1 200
1 500
1 800Million
Population with
electricity access
Population without
electricity access
Nearly one billion people gain access to electricity, but this still leaves 530 million,
primarily in rural communities, without power in 2040

11. © OECD/IEA 2014
Biomass for cooking
Largest populations relying on the traditional use of solid biomass for cooking in
sub-Saharan Africa by sub-region, 2012
Five countries – Nigeria, Ethiopia, DR Congo, Tanzania and Kenya – account for
around half of the sub-Saharan population using solid biomass for cooking
20
40
60
80
100
120
Nigeria
Ghana
Niger
Côted'Ivoire
DRCongo
Cameroon
Chad
CAR
Ethiopia
Kenya
Uganda
Sudan
Tanzania
Mozambique
Madagascar
Malawi
Million West
Rural
Urban
Central
Rural
Urban
East
Rural
Urban
Southern
Rural
Urban

12. © OECD/IEA 2014
How much biomass is being consumed?
Fuelwood consumption per capita per day in selected countries
Around 80% of household energy use is for cooking, compared with 5% in the OECD;
estimates of fuelwood consumption differ markedly within and across countries
Sources: Department of Energy at the Politecnico di Milano; IEA analysis.
1
2
3
4
5
Botswana
Cameroon
Eritrea
Ethiopia
Ghana
Kenya
Malawi
Mali
Nigeria
South Africa
Zimbabwe
kg per
day per
capita
Median
Maximum
Minimum

13. © OECD/IEA 2014
Biomass continues to dominate energy
demand for cooking
Primary fuel/technology used by household for cooking in sub-Saharan Africa
in the New Policies Scenario
In urban areas, access to clean cooking facilities is mainly by fuel switching,
while in rural areas it is mainly via improved biomass cookstoves
Urban
Electricity
LPG, Gas
Kerosene
Traditional
stoves
Improved
cookstoves
Other
renewables
20% 40% 60% 80% 100%
Rural
West
Central
East
Southern
2012
2040
2012
2040
2012
2040
2012
2040
20% 40% 60% 80% 100%

14. © OECD/IEA 2014
How could energy make the 21st century
an African century?
 Energy could do more to act as an engine of inclusive economic &
social development
 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

15. © OECD/IEA 2014
100
200
300
400
500
600
700
Millionpeople Without access
to electricity
Energy can build a path to prosperity
Outcomes in the African Century Case, 2040
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
Main Scenario
African Century
Case
1
2
3
4
5
Thousanddollars(2013,MER)
GDP per capita
Gigawatts
Renewables-based
power generation capacity
40
80
120
160
200
240
280

16. © OECD/IEA 2014
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
 The shortest route to power is a combination of regional &
national level grid projects & mini-off grid projects
 Renewables are central to the regions energy outlook, while
more efficient & sustainable use of biomass will create a
healthier domestic energy balance
 Concerted action to improve the functioning of the energy sector
is essential if the 21st century is to become an African century

17. © OECD/IEA 2014
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