Africa’s oil producers hold energy independent after Covid-19

Lowering oil prices, exacerbated by the coronavirus pandemic, has left Africa’s oil and gas producers staring at the bottom of the barrel. Renewable energy can offer them a way out.

- Advertisement -

Months before Covid-19 triggered a historic oil price crash, there were signs that the market was already in ill health.

In December 2019, Nigeria’s Minister for the Environment warned that fossil fuels were numbered amid concerns about climate change, which had given investors some idea.

Then, in March, Saudi Arabia and Russia received oil prices at about $ 20 a barrel in March, forcing Africa’s largest oil producer Nigeria, and others, to selling at a loss.

When Covid-19 erupted, it hampered global demand for transport, preventing people and goods from traveling. This gave another blow to African economies that are heavily dependent on oil.

“Africa has definitely been impacted,” said Elizabeth Rogo, East Africa chair of the Africa Energy Chamber, a special network that follows the African energy industry.

“We have seen significant cuts in state budgets, as well as public funding and increased job losses,” she told RFI.

strained

The loss of oil revenues has strained governments’ resources and complicated their fight against Covid-19.

“If you look at the big African producers like Nigeria, you see a huge loss and contracts are being put on hold across the continent,” explains Rogo, whose company released a report calls for measures to protect producers from Covid-19 and the oil price war.

The oil spill has spurred drilling and offshore projects not only in Nigeria but in places such as Senegal, Mozambique, Ghana and Angola, the continent’s second largest oil producer.

A group of men pass a gas station in Sonangol, the national fuel community in Angola, in Luanda on November 12, 2018. Many citizens are still waiting for the economic miracle promised by the oil-rich nation. AFP – RODGER BOSCH

It was cautious optimism last Wednesday, when oil prices climbed to $ 35 a barrel on the back of loosened restrictions in several countries.

But while some market experts may be pleased, others say it is time for African governments to look beyond oil into renewable energy.

Turns on

Discovered with water, sun and wind, the African continent has “more resources than it even needs,” says Eddy Njoroge, former head of KenGen, Kenya’s largest energy company, and responsible for overseeing its renewable transition.

“If you just look at hydropower, the potential of the continent is huge,” he told RFI.

Large steam projects such as Ethiopia’s Grand Renaissance Dam can quadruple the country’s electricity generation capacity from approximately 2,200 MW to 8,700 MW when completed. While the Congo River, if ever built, could generate 40,000 MW, enough power to lighten up South Africa.

“But when it comes to the non-traditional renewable energy sources like solar energy, this is where there is much more potential,” Njoroge reckons.

The Senegalese village of Niomoune
The Senegalese village of Niomoune © © Florian Coat

African countries are turning to more and more solar cells solar cells technology to boost energy supply in a continent where about 620 million people, mostly in villages and farms, still live without electricity, according to Africa Progress Panel.

Renewable road

“We have solar radiation that is much higher than anywhere in Europe,” continues Njoroge.

“Compared to Germany, which has 1,500 kilowatts per square meter, in Africa, most places are well over 2,000,” he tells RFI.

In addition, the price of renewable energy sources has fallen, making them as competitive as oil and gas. And without fuel costs, renewable energy sources weather the pandemic slightly better than their dirty counterparts, despite some disruptions in supply chains.

“The big challenge is storage,” Njoroge warns, referring to the difficulty of storing sunlight. “You need huge, huge batteries … When we solve this problem, I see that solar energy is the most important supply in African countries.”

For Africa Energy Chamber’s Elizabeth Rogo, the transition will take time.

“We can’t just throw away oil and gas and go into solar, wind or geothermal energy,” she comments.

“None of these renewable energies per se can sustain growth in the economy. It has not happened, it will happen in the long term, but while we still have oil and gas, let’s look at how we can improve, she says, and suggests that fossil fuel technology can be transferred to renewable energy sources.

Regional integration

Such comments will probably not go well with climate activists who have called for 2020 handlingsår against climate change and for fossil fuels to be left out of the picture.

While climate change may not be the immediate priority for African governments recovering from oil market disruptions, experts agree that energy independence after Covid should be at the top of the agenda.

“There has to be a big shift,” comments the renewable specialist Eddy Njoroge.

“Instead of exporting so much gas and crude oil, African producers have to ask themselves, ‘What is it we can do with this crude oil, this gas, internally to make sure we help our own industries on the continent? “.

One way is through regional integration, Rogo reckons.

A general view of a Total petrol station in Kampala Uganda on January 28, 2020. - The French company is in talks with the government to begin exploiting its crude oil deposits discovered in 2006. But 14 years later, talks are still ongoing.
A general view of a Total petrol station in Kampala Uganda on January 28, 2020. – The French company is in talks with the government to begin exploiting its crude oil deposits discovered in 2006. But 14 years later, talks are still ongoing. AFP – YASUYOSHI CHIBA

She says that new players like Uganda, who hope to extract their first drops of black gold in the coming months, needs their neighbors.

“Uganda is locked up and therefore all the equipment required must come through the ports of Mombasa in Kenya, the port of Tanga in Tanzania and be taken to Uganda,” she explains.

lessons learned

Fortunately, African governments have already started doing business together during African continental free trade area, which makes further cooperation feasible.

“You’re looking at what would be the longest electrically heated pipeline in the world, known as East Africa’s crude oil pipeline,” Rogo continues. “So, by the nature of the project, there will be a lot of regional interaction.”

And hope Njoroge, more independence.

“One of the lessons we have learned that we learn is that we must stop being too dependent. We were very dependent on China in many things, he says.

Trade volumes between China and Africa reached a record $ 208.7 billion last year, leaving many African economies in the throes of coronavirus reduced Beijing’s economy.

Going forward, Njoroge says: “There must be a shift for people to say, ‘It’s time to start moving on to local industries and local manufacturing on the continent.'”

- Advertisement -

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More