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Africa’s Electricity To Surge As Global Demand Hit Highest In 2021

Africa is experiencing new surge in electricity demand with gas seen as leading power generation in the continent.

A rapid economic rebound and extreme weather conditions reportedly drove a 6 per cent rise in global electricity demand in 2021 and seen to be the largest in percentage terms since 2010 when the world recovered from global financial crises.

In absolute terms, 2021’s increase of more than 1,500TWh was the largest ever, according to the January 2022 edition of the IEA’s semi-annual Electricity Market Report.

Electricity demand across Africa rebounded after falling in 2020 because of the COVID-19 pandemic and associated lockdowns. The International Monetary Fund estimates a 1.6 per cent  decline in real GDP over that time.

The IEA estimates growth in electricity supply will hit 5.6 per cent in 2021 and close to 5 per cent in 2022. This is driven by higher GDP growth (improving global trade and commodity prices pushes this to an estimated 5 per cent), new generation capacity and increase electricity access which should alleviate some power supply shortages on the continent.

Measures to contain the spread of the COVID-19 Omicron variant at the end of 2021 in South Africa (which accounts for almost 30 per cent of the total power demand in the region) could significantly impact economic and consequently electricity supply growth.

The IEA expects a slowdown in annual growth in demand in Africa for the period 2022 to 2024, falling to around 3.5 per cent on average.

The majority of new capacity due to come online over the next few years is in the form of renewable and gas projects across the continent. By 2024 this will result in an additional 50 TWh of electricity from renewable energy sources, reaching a 26 per cent share of total generation. This would be an increase from 23 per cent  in 2021, achieving a similar level to coal-fired generation (which would decline from around 28 per cent  in 2021 to 26 per cent  by 2024).

While new coal units coming online in South Africa created a slight increase in coal-fired generation of 1 per cent for Africa in 2021 and 2022, coal-fired generation on the continent will remain flat in 2023 and 2024.

Natural gas is the largest source of electricity supply in Africa. The IEA expects around 25TWh of additional gas-fired electricity generation by 2024, compared to 2021. They foresee a stable market share of around 38 per cent for gas-fired electricity between 2022 and 2024.

They also forecast significantly less relevance for oil and oil derivatives from an 8 per cent market share in 2021 to an output of below 1 per cent  annually on average between 2022 and 2024.

As renewables are set to supply the majority of net demand growth between 2022 and 2024 (more than 60 per cent), the IEA expect the carbon intensity of electricity generation to decline by almost 2 per cent on average during the period, reaching about 510 g CO2 per kWh in 2024.

The steep increase in demand outstripped the ability of electricity suppliers to keep up in some major markets. Shortages of natural gas and coal led to volatile prices, demand destruction and negative effects on power generators, retails and end-users, especially in China, Europe and India.

About half of 2021’s global growth in electricity demand happened in China, where demand grew by an estimated 10 per cent. China and India suffered power cuts in the second half of 2021 because of coal shortages.

IEA executive director, Dr Fatih Birol, pointed out that, the recent sharp spikes in electricity prices are causing hardship for many households and businesses around the world and this risks becoming a driver of social and political tension.

“Policymakers should be taking action now to soften the impacts on the most vulnerable and to address the underlying causes. Higher investment in low-carbon energy technologies including renewables, energy efficiency and nuclear power alongside and expansion of robust and smart electricity grids – can help us get out of today’s difficulties,” said Birol.

The IEA’s price index for major wholesale electricity markets almost doubled between 2020 and 2021, up 64 per cent from the 2016-2020 average. Besides Europe (where the average wholesale electricity price in the fourth quarter of 2021 was more than four times the 2015-2020 average) there were sharp price increases in Japan and India, and moderate increase in the US where gas supplies were less perturbed.

Electricity produced by renewables sources grew by 6 per cent in 2021 but could not keep up with galloping demand. Coal-fired generation grew by 9 per cent, serving more than half of the increase in demand and reaching a new all-time peak as generation companies switched back to coal because of the high natural gas price.

Gas-fired generation grew by 2 per cent and nuclear increased by 3.5 per cent, almost reaching its 2019 level.

Also, the report showed that CO2 emissions from power generation rose by 7 per cent  in 2021, reaching a record high after declining the two previous years. “Emissions from electricity need to decline by 55 per cent by 2030 to meet our Net Zero Emissions by 2050 Scenarios. But, in the absence of major policy action from governments, these emissions are set to remain around the same level for the next three years.

“Not only does this highlight how far off track we currently are from a pathway to net zero emissions by 2050, but it also underscores the massive changes needed for the electricity sector to fulfil its critical role in decarbonising the broader energy system,” said Birol.

 

SOURCE; https://leadership.ng/africas-electricity-to-surge-as-global-demand-hit-highest-in-2021/

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