The latest figures from African Energy Live Data show that across the continent generation capacity additions have improved dramatically over the past decade. However, many long-term goals remain unattained. While the share of renewables is steadily increasing, private companies still struggle to make inroads in an industry dominated by often all but insolvent state utilities

Three key takeaways from the 2019 update:

  • at 9.6GW, 2019 saw the lowest net increase in installed capacity since 2014, with the continent at the crux of several transitions, most notably towards greater use of renewable energy and private sector-led development;
  • gas-fired power plants added most capacity (2.2GW) during the year, but also saw the biggest drop in new additions year-on-year. This is explained by Egypt’s huge gas procurement programmes being mostly realised in 2018; and
  • there was a step change in solar power, as more than twice as much capacity was brought online in 2019 (1,879MW) than any previous year. The project pipeline as recorded in African Energy Live Data suggests that this will be sustained, with 2.2GW scheduled for commissioning in 2020 pre-coronavirus and 1.9GW in 2021.

 

The African Energy Live Data 2019 update shows that 9.6GW of net new capacity was added on the continent during the 2019 calendar year. The figure includes off-grid and embedded plants in the public domain, as well as on-grid facilities. This is just over half of the capacity added in 2018 and significantly less than the five-year 2014-18 average of 13.2GW. The slowdown was widespread. Only 2.8GW was added in sub-Saharan Africa (SSA) excluding South Africa – this is the lowest amount since 2014 and is also significantly lower than the 2014-18 average of 3.8GW.

Reduced investment in generation is clear from the African Energy Live Data Scorecard for 2019. The continent scored 23 out of 42 on the range of indicators included, compared with 30 in 2018. The 2019 score was the result of a lower level of new generation capacity additions, which meant that the rate of increase of installed capacity failed to keep pace with GDP growth in East, North, and West Africa. This was only the case in East and West Africa in 2018. New renewable energy had a better year overall in 2019 than 2018 but failed to increase as a proportion of total capacity in Central, North, and Southern Africa. Meanwhile, liquid fuel increased marginally overall as a percentage of total capacity, as well as in North, Southern and West Africa.

Parts of Africa have dashed for gas

Natural gas-powered plants added the most capacity during the year, at 2.2GW, but they also experienced the biggest year-on-year drop as a result of abnormally high capacity additions in Egypt in 2018. Some 9.3GW of gas capacity was added in 2018.

Some 41.7GW of gas capacity was added in 2010-19, more than any other fuel. In 2000, gas accounted for only 12% of installed capacity in Africa. By 2010, this had increased to 19%, and by 2019, 29%. If dual-fuel plants using both gas and liquid fuels are included, these two categories accounted for 29% of capacity in 2000, 40% in 2010 and 48% in 2019.

Renewables turning point

By 2019, non-hydroelectric renewable technologies still only accounted for around 6% of installed capacity on the continent and 5% in SSA. Solar and wind each accounted for only 1% of capacity in SSA, compared with 2% and 3% when North Africa is included in the mix.

According to African Energy power editor Dan Marks, “this suggests that poorer countries are missing out on the cheapest and cleanest sources of energy. Many of poorest countries added only liquid fuel plants, particularly [heavy fuel oil] HFO, and a significant proportion of rental capacity.”

However, the situation is changing – 2019 marked a step change for solar power, with 1,879MW of new capacity added during the year. While the big uptick in solar was predominantly the result of the Benban complex in Egypt coming online, the trend is set to continue given the project pipeline recorded by Live Data.

Live Data’s figures were compiled before the impact of the virus could be assessed, but the pipeline of projects at the development stage was promising, with 2,245MW of solar capacity scheduled to begin operating in 2020 and 1,867MW in 2021.

Wind energy had a mixed 2019. Wind plants are more concentrated in larger markets, which added significant capacity in 2014-18, averaging 767MW/yr. Some 559MW of wind capacity was added in 2019. The technology is coming from a much smaller base in SSA, mostly accounted for by two large projects in Kenya and Senegal. Some 105MW was added in 2018 and 297MW in 2019, while 507MW was scheduled to begin operating in 2020, a significant increase on the 2015-19 average of 93MW.

Coronavirus impact

This promising trend is likely to be set back by the coronavirus pandemic, not least due to the problems faced by developers and contractors in working on-site – a trend highlighted in a late April survey of the industry carried out by African Energy. Covid-19 is undoubtedly a major setback for the industry, but the analysis of Live Data show that Africa’s move into greater reliance on renewables, and application of technologies that speed the carbon transition, is unlikely to be halted.

 

A frustrating decade for the private sector

The private sector has suffered a frustrating decade. Despite the promise of significant reform and some major procurement initiatives, private companies have struggled to make inroads into capacity additions – even though in absolute terms investment has been increasing.

This is shown starkly by the average proportion of net new capacity that was privately-owned (excluding rental plants) between 2000 and 2009. This was 37%, compared with 24% between 2010 and 2019 – despite the emergence of the growing and predominantly privately-owned distributed generation sector.

In 2000, 12.3% of installed capacity was privately-owned. By 2010, this had increased to 18% but by 2019 the proportion had barely moved and was at 20%.

According to Live Data, the continent is reaching a tipping point. From 2022, more than 50% of the current pipeline of new capacity should be privately owned: 64% in 2022, 71% in 2023, 67% in 2024 and 68% in 2025. In SSA, the tipping point is earlier, with – before coronavirus –  62% of capacity scheduled to begin operating in 2020 privately owned, 56% in 2021, 60% in 2022, 58% in 2023, 67% in 2024 and 85% in 2025. This trend is relatively evenly distributed between regions.

Download a pdf of graphics illustrating these trends.

For more information on African Energy Live Data subscriptions and demonstrations, please contact Alex Wark.