Can Africa Grow Without Fossil Fuels?

In Hell’s Gate, a two-hour drive north of Nairobi, steam gushes out of the earth’s crust, producing a renewable type of vitality that provides nearly half of Kenya’s present electrical energy wants. The steam is captured in miles of inexperienced pipes, which coil throughout the hillsides like big pythons in direction of energy stations that convert the volcanic vitality into electrical energy.

What began as a unusual experiment 40 years in the past is now a severe business. Kenya has adequate geothermal reserves to multiply its present put in capability by a minimum of eight instances, in keeping with the Vitality and Petroleum Regulatory Authority, the nation’s vitality regulator. In idea that will give it the chance to massively ramp up renewable-powered industries from inexperienced manufacturing to inexperienced hydrogen.

Renewable vitality—together with hydro, wind and solar energy, in addition to geothermal—accounts for 75 p.c of Kenya’s electrical energy era, in keeping with EPRA. So ample are its reserves that, for the time being, a lot geothermal vitality is vented off at evening when demand for electrical energy is low.

Clearly, not each nation in Africa is equally endowed, though 22 nations on the continent already use renewables as their foremost supply of electrical energy, in keeping with the Mo Ibrahim Basis, a governance assume tank. Some, just like the Democratic Republic of Congo, are sitting on large hydroelectric potential whereas others, together with Namibia, with its lengthy shoreline and deserts, are effectively positioned to harness wind and solar energy—and ultimately hydrogen.

Amid the worldwide drive in direction of web zero carbon emissions, Kenya raises an pressing query for international locations in Africa and elsewhere within the growing world. Is it potential for a poor nation to realize a excessive dwelling customary with out intensive use of fossil fuels?

Poverty in Perpetuity

Many African officers argue that it isn’t. Renewable vitality, together with modern off-grid photo voltaic used to mild villages, is solely no substitute for the hydrocarbon vitality depth wanted to make metal, run factories and create jobs for a quickly rising city inhabitants, they are saying. By 2050, Africa’s inhabitants will nearly double to 2.5 billion.

“Nobody on this planet has but been capable of industrialize utilizing renewable vitality,” Yemi Osinbajo, vice-president of Nigeria, an enormous oil producer, informed an viewers in Abuja, to rapturous applause final month.

Excluding South Africa and some international locations together with Algeria and Egypt, on common Africans eat a sliver of the vitality and emit a fraction of the carbon of their western counterparts. Nigerians, for instance, produce 0.7 tons of carbon per capita, in keeping with the World Financial institution, lower than one-twentieth of the quantity wanted to take care of a typical American life-style. Africa is chargeable for maybe 3 p.c of worldwide carbon emissions—discounting agriculture and deforestation. But it suffers disproportionately from local weather change.

Many African leaders, consultants and vitality executives argue it’s a gross hypocrisy to insist that Africans freeze their carbon emissions, not to mention lower them from already low ranges. They are saying the demand to take action is tantamount to asking a complete continent to remain poor in perpetuity.

“You may measure any nation by the quantity of gasoline it has emitted. There’s a sturdy correlation between that and improvement,” says Mo Ibrahim, whose eponymous basis final week launched a report supposed to make Africa’s case within the local weather debate. In November, the COP27 UN Local weather Change Convention will likely be held on African soil, in Egypt, giving Africans the prospect to redress what they see as a western-biased agenda superior within the U.Ok.-based assembly final yr.

Ibrahim, like many others, lambasts western banks and multilateral establishments such because the World Financial institution which have all however deserted financing gasoline initiatives. “It’s completely immoral and ridiculous for some individuals to say they’ll lower off funding of gasoline initiatives in Africa as a result of they’re very good individuals who care concerning the atmosphere — and when they’re wallowing in Russian gasoline,” he says.

As Europe strikes to ban the import of Russian oil, it has been scouring the world for various vitality sources, together with in Africa. Botswana says it has been inundated with requests by European states for coal provides in an obvious volte-face that Carlos Lopes, a professor at Cape City College, says exposes the hypocrisy of the European place on fossil fuels.

Mamadou Fall Kane, who advises Senegal’s president on vitality coverage, says Europeans have softened their objection to gasoline, labeling it a transition gasoline—together with nuclear—of their new taxonomy. Because the invasion of Ukraine, he provides, any remaining objections to gasoline have crumbled. 

“After COP26, they needed to kill it off. No one is speaking about that any extra. Quite the opposite, they’re desperately in search of new sources of gasoline,” Kane stated.

If Europe wants fossil fuels, Africa has lots. Mozambique has made prodigious discoveries of gasoline that may be liquefied and placed on ships. Large current oil and gasoline discoveries off the coast of Ivory Coast, Ghana, Senegal and Mauritania have attracted eager European curiosity. Nigeria has the potential to ramp up oil exports, though it has struggled in recent times to even meet its Opec quota of 1.74 million barrels a day.

Africa has 600 million individuals who lack electrical energy, one-sixth of whom dwell in Nigeria. Osinbajo estimates that, given Nigeria’s vitality poverty, its fast-growing inhabitants and its ambitions to industrialize, by 2050 the nation will want 15 instances extra vitality than it at present consumes.

That will likely be unimaginable with out gasoline, he says. “You want gasoline only for the baseload,” he stated in his speech in Abuja, referring to the requirement for a steady grid that isn’t reliant on intermittent energy. Thankfully for Kenya, its geothermal vitality is steady sufficient to supply a baseload, however wind and photo voltaic aren’t except battery know-how advances considerably.

NJ Ayuk, government chair of the African Vitality Chamber, a foyer group, has a easy message of Africa’s intent. “Drill child drill,” he says. “You’ve bought to be kidding if you happen to assume we’re going to depart a single drop of our hydrocarbons within the floor.”

‘A Simply Vitality Transition’

Given the power of feeling about what many see as Africa’s proper to use its assets by way of what they name a “simply vitality transition,” Africans making the case for a renewable-led development mannequin are typically drowned out. However they do exist.

James Mwangi, government director of the Dalberg Group, a consultancy, argues that African international locations ought to go inexperienced not by way of any sense of ethical obligation however as a practical response to new billion-dollar alternatives. “The long run is a complete vary of enterprise fashions which have carbon as a commodity stream,” he says. “That is neither charity nor philanthropy. It’s delivering a really actual service to the world—high quality carbon credit.”

Mwangi says that each the wealthy world and middle-income international locations resembling China, Vietnam and Brazil are already locked right into a carbon-intensive path that may make switching to greener applied sciences troublesome. Most of Africa, alternatively, has but to construct its vitality infrastructure so it ought to be simpler to undertake new applied sciences resembling electrical autos, hydrogen manufacturing and carbon seize.

“What would it not take to make Hell’s Gate a world carbon removing hub?” he asks, of the potential to make use of geothermal vitality to drag carbon from the environment.

Kenya might additionally produce items resembling textiles competitively, not as a result of its labor is cheaper however as a result of it might accomplish that with a decrease carbon footprint, thus avoiding the taxes that Europe will impose below its proposed Carbon Border Adjustment Mechanism.

The idea that the vitality transition presents Africa with a one-time alternative to speed up improvement assumes larger carbon costs pushed by regulation and trillions of {dollars} pouring into ESG investments.

“You’ve bought firms like Goldman Sachs, Vitol [the Dutch energy trader] and others who’re investing on the understanding that carbon goes to be a scorching commodity,” says Mwangi. “These aren’t bunny huggers: they’re hardened funding bankers betting on carbon costs of $40 to $50 a ton.”

Given the urgent wants of many individuals in Africa, a minimum of one-third of whom dwell in excessive poverty on below $1.90 a day, the concept that Africa can develop with out growing carbon emissions dangers showing out of contact. In a current op-ed, Osinbajo took a swipe at these with “a naive perception in leapfrogging, the idea that, like skipping landlines for cell phones, Africa can ‘leap’ to new vitality applied sciences.”

But for individuals who advocate exactly that path, Kenya—a rustic with a file of technological innovation going again to its early adoption of cell cash—affords a glimpse of what is perhaps potential. Dozens of firms in Nairobi, many nonetheless at a proof-of-concept stage, are in search of to create inexperienced options that, they are saying, might be rolled out at scale throughout the continent.

“I don’t know whether or not you possibly can industrialize with out carbon; historical past has proven us a carbon path,” says Monica Juma, Kenya’s vitality minister. “We’re asking ourselves whether or not there’s another. We’ve got accomplished it in digital. Is there an analogous leapfrogging in vitality? We don’t know, however I think there’s.”

Nations like Kenya, with the capability to observe a renewable path, ought to take it, she says, as long as others meet their obligations too. “If the journey of emissions is a journey to destruction, then the query we must always ask is how will we keep away from that destruction.”

The Drawback of Scale

One large space of funding is electrical autos. Roam, an organization based by Swedish engineers in Nairobi, thinks the place to begin ought to be motorbikes, which will be shortly and simply recharged, and buses, as a result of recharging stations will be positioned alongside a set route.

Roam, amongst others, has began manufacturing small portions of electrical motorbikes in Nairobi for native motorcycle taxi fleets. Its pitch to drivers shouldn’t be that they’re saving the atmosphere however that the bikes are cheaper to take care of and run, says Albin Wilson, Roam’s chief advertising and marketing officer.

Refined parts, together with the engine and tires, are at present imported from China and India, however different components, together with sections of the physique and the saddle, are made domestically, he says. In time, Roam hopes to supply extra in Kenya to drive down the value and to assist construct an industrial ecosystem round electrical autos.

The eventual aspiration is that batteries—the uncooked supplies for which, together with cobalt, nickel and tantalum, are sourced in Africa—might be produced, or a minimum of assembled, domestically too.

One other promising thought is being developed by Koko Networks, an organization that goals to exchange cooking charcoal with bioethanol, a byproduct of sugar or starch that burns cleanly and is 40 p.c cheaper, in keeping with the corporate. Residents of Nairobi’s big casual settlements spend $15 a month on common on charcoal, a part of a $30 billion African business that’s among the many largest causes of deforestation—along with conversion to agriculture—in addition to being a serious killer by way of smoke inhalation.

Koko distributes ethanol through native “gasoline ATMs” in small portions and sells clean-cook stoves, manufactured in India, at price or beneath. What feels like a small thought from a well-meaning NGO has the makings of an enormous enterprise with the potential to alter cooking habits and arrest deforestation throughout the continent, says Greg Murray, a former funding banker who co-founded the corporate. The Congo Basin Rainforest in central Africa is second in measurement solely to the Amazon.

Koko has signed up one-fifth of Nairobi’s households in about two years and is including 1,500 new prospects a day. Its revenue comes primarily from promoting carbon credit—derived from audited calculations of averted emissions—which it sells at a mean $20 a ton to South Korea. So-called compliance markets, together with the EU’s Emissions Buying and selling System, have been value $850 billion final yr, in keeping with Refinitiv, a monetary knowledge supplier.

McKinsey, which produced a report on the potential for a low-carbon industrial future in Africa, recognized greater than 20 inexperienced enterprise alternatives, a number of of which it estimates might make an affect at scale this decade.

One advice is manufacturing wind-turbine towers. Standing on a ladder inside one of many airplane-sized towers at Kipeto, a 100-megawatt wind farm south of Nairobi, Norbert Ombese, a discipline service engineer with GE, says: “Everyone’s going inexperienced on the market and we are attempting to maneuver with the instances.” The towers at Kipeto have been made in China however native producers assume they may produce them domestically.

An even bigger alternative nonetheless is hydrogen, argues Seyni Nafo, former chair of the African Group of Negotiators within the UN local weather change course of and now a board member of the African Hydrogen Partnership.

“We’ve got the potential to industrialize the continent by producing dependable, reasonably priced, sustainable, scalable inexperienced vitality,” he says of the prospect of turning wind, photo voltaic, hydro and geothermal energy into hydrogen. This might be shipped in liquid type to western markets or used domestically to provide inexperienced fertilizer or inexperienced aluminum and metal.

Overseas buyers have sensed a chance. Australian mining magnate Andrew Forrest, chair of Fortescue Metals, struck a tentative cope with DRC’s authorities final yr to guide an $80 billion improvement of the Inga dam. The dam complicated on the Congo river might probably be twice the scale of the 22.5 gigawatt Three Gorges dam in China, producing sufficient vitality to energy a lot of southern Africa with lots left over to transform into hydrogen.

“We’ve been speaking about it for 5 many years,” says Ibrahim of grandiose plans for the Inga dam. “It’s time to make it actual.”

However such vastly formidable plans take time, says James Mwangi (no relation to Dalberg’s Mwangi), chief government of Fairness Group Holdings, a Nairobi-based regional financial institution. Speak of carbon seize and hydrogen manufacturing should be tempered by the truth of what individuals want now, he says. “The know-how for a [green industrial revolution] has not been totally invented but. So you possibly can’t inform Africa to attend till it’s accomplished.”

African international locations will transition at completely different speeds, he says. “Kenya has chosen to not go down that legacy path,” he says of the mannequin of fossil-fuel dependency. “You don’t need to soiled the atmosphere after which begin cleansing. However have a look at international locations like Nigeria which have legacy techniques. They’re caught the place they’re and will probably be a gradual course of to alter.”

The one factor he’s sure of is that wealthy international locations can not suggest options that hold some international locations poor. The results of such unjust propositions, he says, can be each predictable and devastating: thousands and thousands of individuals crossing the Mediterranean heading for Europe in quest of a carbon-heavy life-style.

This story initially appeared within the June 1, 2021 version of The Monetary Instances

Copyright The Monetary Instances Restricted 2022

Reprinted with permission.