IGU-Hawilti report finds Africa the most energy-poor continent despite natural gas reserves

The International Gas Union (IGU) in partnership with Hawilti on Tuesday released an important new study on Gas for Africa, assessing the potential for domestic gas resources to energise Africa in line with the global energy transition. The African Energy Commission (AU-AFREC) and the Africa Finance Corporation endorsed the report and its findings.

Africa has the lowest energy per capita in the world, while the average electricity use of a sub-Saharan Africa resident is lower than that of a household fridge in the US, the report found.

Where energy is available in African countries, it is often expensive, inefficient, polluting, and unreliable: for example, Nigeria’s grid collapsed four times between January and September 2022.

Domestic natural gas can help to alleviate Africa’s energy poverty, but despite producing more than 6% of the world’s natural gas supply and having close to one tenth of proven global reserves, most of the African continent has no access to its natural gas.

Africa’s domestic gas markets remain under-developed or non-existent, especially south of the Sahara, and much of Africa’s abundant natural gas resource development has been for export to the rest of the world. Africa produces over 280 bcm of natural gas, while its domestic demand is just above 160 bcm, the report said.

The adoption of natural gas in Africa will have minimal impact on the net global GHG emissions, given its miniscule starting point.

Observing that Africa has a fifth of the world’s population and represents only 3% of global emissions, the report said that for the 48 Sub-Saharan African countries, without South Africa, the estimated share of emissions is 0.55%.

If Africa consumes 50% (90 bcm/y) more natural gas by 2030 than it does today, it would generate cumulative CO2 emissions of 10 gigatons (Gt), taking its share of global emissions to 3.5% by 2050, according to the IEA.

Immediate benefits of gas

In the short-term, natural gas can also provide an immediate emissions reductions benefit when it replaces higher emitting energy sources, such as biomass, wood, charcoal, coal, and heavy fuel oil. For example, when replacing coal with natural gas in power generation, Africa can achieve a reduction of 50% in greenhouse gas (GHG) and more than 90% in air pollution emissions.

To stay on a long-term decarbonisation trajectory, developing gas infrastructure and markets in Africa should also go hand in hand with integration of variable renewable generation, carbon capture, renewable gases, and hydrogen, the IGU-Hawilti report recommended.

“Natural gas is a resource that has a significant role to play in bringing about socio-economic development and mitigating climate change in Africa. As part of a just transition, Africa requires gas to contribute to eradicating energy poverty, providing electricity to almost 50% of Africans, playing as catalyst in the provision of clean cooking technologies to nearly billion Africans and creating jobs,” said Rashid Abdallah, Executive Director, Africa Energy Commission.

“The calls for an immediate end to all fossil fuel utilisation, and request for global capital investors to stop funding gas projects will severely impact Africa’s socio-economic development,” he said.

Noting that Africa wants to leverage its 18 trillion cubic metres of natural gas to rebalance pressing needs of local development with lucrative export revenues, the report observed that access to gas can provide stable electricity in countries with no lower-emission alternatives and strengthen power systems to add more renewable energy, and begin decarbonising energy supply, displacing wood, biomass, charcoal, and diesel.

Energy access

Developing domestic access to gas in Africa can provide energy needed today, while anchoring the continent’s future low-carbon and renewable energy, the report said.

By developing domestic gas markets and re-orienting gas towards its own energy needs Africa seeks to promote industrialisation, create jobs, diversify economies, produce fertilizer to grow food, petrochemicals to make consumer goods and advanced products, and steel and cement to develop modern infrastructure, the report said.

“The global energy market is in an unprecedented state of flux, opening significant opportunities for exploration and development of gas in Africa,” said Samaila Zubairu, the CEO of Africa Finance Corporation.

“At the same time, gas is key to helping Africa end its energy poverty quickly and affordably, by providing an alternative to wood fuel, which would lift hundreds of millions out of poverty while preserving Africa’s forests – a valuable carbon sink for the world. Gas offers further solutions for Africa’s food security challenges as a key source of critical fertilizers, while also generating needed export revenue for re-investment in renewable solutions,” Zubairu said.

To realise its vast potential and benefit from lucrative sector investments, a pragmatic approach, sense of urgency, and focus on competitiveness are required for Africa to attract the billions of dollars that will be injected into gas projects this decade.

Boosting the gas value chain gas

Sustainability improvements in current operations will be vital for the gas value chain in Africa to ensure its global competitiveness. There is growing urgency to effectively manage and eliminate methane emissions globally, as well as to end routine flaring.

Futureproofing projects to strengthen sustainability and climate value and unlocking additional sources of capital domestically will be key to overcoming financing challenges. Addressing the infrastructure and demand-side barriers will require continued regional cooperation, leveraging gas value chains to develop industrial clusters, reforming electricity markets, pricing emissions, and encouraging the adoption of small, scalable technologies. Policy uncertainty and physical security risks that create an unfavourable business climate and discourage investment also need to be urgently addressed, the IGU-Hawilti report found.

Case studies from Africa

Fortunately, successful African case studies detailed in the report demonstrate that there are many local solutions and opportunities to achieve gasification, as well as emissions reductions. 

According to Li Yalan, IGU President, access to modern energy in Africa is imperative for its development, for having an ability to respond to climate change, and for gradually decarbonising its economies.

“Gas is one of the keys to unlock this access, and it is also a fuel for producing stable and flexible energy needed to integrate more renewables. Using its gas resources together with renewable energy technologies, Africa can build energy systems compatible with a climate- or carbon-neutral future and underpin the continent’s sustainable economic development,” she said.

Mickael Vogel, Director & Head of Research at Hawilti, said: “We are delighted to provide stakeholders and policy-makers with an overview of natural gas dynamics in Africa, and hope it will be valuable to underpin dialogue and pragmatic actions to eliminate energy poverty. As an Africa-based research and consultancy company, we will continue to highlight the diversity and complexity of African energy markets and we see gas as a critical contributor to the continent's development and just energy transition."