Many Africans remain dependent on traditional and polluting energy sources. Nationally-focused energy planning is inefficient. Local energy markets are often too small to justify the investments needed in particular energy supply options. As the cleanest and cheapest energy source may lie across national frontiers African states must develop cross-border supply systems.

A report from the World Energy Council identifies four major benefits associated with regional energy integration in Africa: improved security of supply, better economic efficiency, enhanced environmental quality and a wider deployment of renewable energy resources.

Africa’s key problem is one of energy access, not lack of energy resources. Oil and gas reserves are concentrated in North and West Africa, hydroelectric potential in Central and Eastern Africa and coal in Southern Africa. There is enormous scope for hydropower development, with only seven per cent of estimated potential being used.

Reliance on traditional biomass (plant materials and animal waste) as the main source of energy is particularly high in sub-Saharan Africa, where it accounts in some countries for 70-90 percent of primary energy supply. The majority of poor people spend a significant proportion of their income on energy. Only one rural house in 20 has electricity. As the majority of very poor people mostly live in remote rural communities there are no clear economic incentives for extending electricity grids or for supplying modern hydrocarbon fuels such as kerosene and liquefied petroleum gas (LPG).

Although Africa has eight per cent of the world’s natural gas resources, it has been substantially under-utilised or wasted. Large quantities of natural gas associated with oil production are still flared, wasting the resource and causing significant environmental damage.

Electricity consumption in most African countries is very low and demand is mostly confined to the energy-intensive industries, commercial enterprises and cities. The electricity sector is often characterised by managerial weaknesses, illegal connections, unsustainable tariffs, losses in transmission and distribution and political interference. Such problems prevent Africa’s energy sector from driving intercontinental trade, as is happening in other continents.

Integration has clear economic advantages:

• Southern African states could save US$1.6 billion over ten years through optimal use of regional electricity resources and installations.
• Benin, Togo and Ghana could save nearly US$500 million in energy costs when the West Africa Gas Pipeline delivers previously-flared Nigerian gas to replace more expensive fuels in power generation.
• If the West African Power Pool project successfully regionalises power generation and transmission the 14 participating countries could save US$3-5 billion over 20 years.

The report recommends:

• promoting natural gas technologies and gas use in generating electricity
• building capacity of the New Partnership for Africa’s Development (NEPAD) and supporting regional institutions to promote and coordinate regional energy integration projects
• strengthening the roles of the African Development Bank and the recently established African Energy Commission in energy planning and implementation
• enhancing mechanisms for commercial dispute resolution
• harmonising regulatory frameworks and operating procedures for interconnected power systems
• devising new financing schemes to promote regional energy integration and integrate Africa into the global economy: a Euro-African investment bank could play such a role.

Source(s):
‘Regional energy integration in Africa: A report of the World Energy Council’, by Ibrahim Abdel Gelil, June 2005 Full document.

Funded by: BP Southern Africa

id21 Research Highlight: 29 March 2006

Further Information:
Wale Shasanya
Africa Regional Coordinator
World Energy Council
5th Floor, Regency House
1-4 Warwick Street
London W1B 5LT
UK

Tel: +44 (0) 20 7734 5996
Fax: +44 (0) 20 7734 5926
Contact the contributor: shasanya@worldenergy.org; info@worldenergy.org

World Energy Council, UK

Other related links:
'Energy in Africa – time to think across borders?'

WEC Statement 2005: Delivering Sustainability

'Putting energy at the heart of poverty reduction'

'Powering the MDGs: development targets unattainable without energy'