• 31st March, 2023

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      From Data That Affects You

      Natural Gas Dominates Africa’s Electricity Generation

      Natural gas continues to provide a significant share of electricity generation in Africa, as newer discoveries portend increase.

      Natural Gas Dominates Africa’s Electricity Generation

      According to the International Energy Agency (IEA), 42% of Africa’s electricity generation is powered by natural gas. Coal had the second-highest generating share at 27%, with renewables – solar, wind, hydro, and geothermal – combined to account for 24%.  

      As Africa’s population and economy grow, the continent’s demand for electricity will continue to grow. With a little over 40% of all Africans still struggling without access to electricity, ramping up access to secure and affordable energy remains a major factor in boosting or impeding the continent’s economic growth.  

      While the IEA projects the share of renewables is predicted to rise in the coming decade and that of coal to decline in the coming decade, natural gas is still seen as an important part of Africa’s energy mix. In a paper by the United Nations Economic Commission for Africa, it is stated that while renewable energy will account for 60% of Sub-Saharan Africa’s future electricity generation capacity, natural gas will make up 30%. Thus, it is important to explore the role of natural gas in the electrification of Africa going forward.  

      Several factors are driving the growing use of natural gas in electricity generation. First, there is the issue of cost. Natural gas prices have steadily declined since the historic highs of the mid-to late-2000s. The Russia-Ukraine conflict caused a temporary spike in mid-2022, but prices have returned to mid-2010s levels. The lower prices have led to a growing demand for gas.  

      Secondly, countries with growing industrial and electricity sectors will likely lean on gas for its efficiency and reliability. Unlike the intermittent nature of renewable sources – most renewables are directly linked to the weather and climate, which is unstable – natural gas can produce steady electricity over long periods. It would not be unusual for a developing country to take advantage of the lower prices and opt for the surer nature of gas generation, especially if energy storage via batteries has not ramped up to an industrial scale.   

      Thirdly, technological changes have increased gas supply. The discovery of shale gas – an unconventional form of natural gas trapped in shale rock formations – in countries like China, Mexico, the United States, Canada, and the United Kingdom has led to expanded supply. Advancements in liquefied natural gas (LNG) technology, such as floating storage, liquefaction, and regasification have created new markets for natural gas in places that previously may not have possessed gas transportation or storage infrastructure.  

      Fourth, the major reason why natural gas usage will continue to contribute majorly to Africa is the discovery of massive natural gas reserves in Africa. The continent has long since possessed natural gas in abundance due to massive reserves in countries like Nigeria, Libya, Algeria, and Egypt. The massive deposits discovered in countries like Senegal, Mauritania, Mozambique, and the United Republic of Tanzania mean that nearly 40% of all new gas discoveries made in the last decade have been in Africa.  

      According to the IEA, more than 5 trillion cubic metres of natural gas on the continent have yet to be approved for development. Executive Director, Faith Birol, has stated that if Africa could turn all of its recoverable reserves into production, the continent might produce as much as 90 billion cubic metres of natural gas per year by 2030, with about two-thirds of this needed for domestic use and the rest for export.  

      Aside from electricity generation, natural gas development will also lead to the growth of other industries. Fertiliser is a major need in a continent that is still very agrarian and often finds itself having to import the product – rising fertilizer prices due to the Russia-Ukraine war led to high food prices in Africa. With a growing economy and rapid urbanization, steel and cement are necessary and will be positively impacted by natural gas.  

      Hence, it is clear that natural gas can and should play a major role in the electrification of Africa, although that may come with certain drawbacks. The major issue is not the one most will predict: Africa burning so much gas will lead to increased carbon emissions. Presently, the continent of Africa is only responsible for about 3% of all carbon emissions globally and an upscale in gas usage for electricity will not lead to an overshoot. The IEA estimates that Africa utilizing its gas reserves over the next 30 years will only grow its emissions to 3.5%. 

      The major cause of concern with growing natural gas investment is that financing gas development might take away from the growth of renewables. However, one does not have to take away from the other. A lot of African countries are starting to see the usefulness of adding renewables, guided by the decreasing cost of technologies such as solar. Upscaling electricity generation will inevitably come with the extension of grids, but it is more viable to install renewable-based mini-grids and stand-alone systems in rural areas.  

      The best approach to installing electricity generation infrastructure will remain taking advantage of the resources available to you while implementing a backup. The decline of coal will see the rise of renewables, but gas-fired generation will continue to power African countries for a long time. Expect to see countries rely on natural gas and hydropower on a large-scale while installing small-scale renewables. Co-operation is necessary, as energy sharing via interconnectors and pipelines helps to not just fortify the continent’s supply, but also provide revenue for generating countries.

      • Published: 31st March, 2023


      Emmanuel is an economic researcher and writer who likes to investigate systems, connect the dots, and find solutions.


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