Despite holding more than 8% of the world's proven natural gas reserves, Africa remains the most energy-poor continent.
Domestic gas resources can improve the lives of Africa's young and growing population and provide the energy they need to fuel a just energy transition.
TheInternational Gas Union (IGU)in partnership with Hawilti Ltd.The European Commission has published a major new study on gas in Africa, assessing the potential of domestic gas resources to boost the continent's development while complying with the global energy transition. The African Energy Commission (AU-AFREC) and the Africa Finance Corporation (AFC) support the report and its conclusions.
Africa has the lowest per capita energy consumption in the world, while the average electricity consumption of a sub-Saharan African resident is less than that of a refrigerator in the US.
Where energy is available in African countries, it is often expensive, inefficient, polluting and unreliable: for example, the Nigerian grid collapsed four times between January and September 2022.
Increased gas consumption could help Africa alleviate its energy poverty. In contrast, although the continent produces more than 6% of the world's natural gas supply and has almost a tenth of the world's proven reserves, most of its people do not have access to natural gas. Local gas markets remain underdeveloped or non-existent, especially south of the Sahara, while much of the African natural gas resources that are produced are destined for export to the rest of the world. Africa produces over 280 bcm of natural gas, while its domestic demand is just over 160 bcm.
The adoption of natural gas in Africa will have minimal impact on global net GHG emissions, given its tiny starting point.
Africa has one fifth of the world's population and accounts for only 3% of global carbon dioxide (CO2) emissions. Counting only the 48 countries of sub-Saharan Africa, without South Africa, the estimated share of emissions is only 0.55%. If Africa consumed 50% more natural gas (i.e. +90 billion m3/emissions by 2030, it would generate cumulative CO2 emissions of 10 gigatonnes (Gt), raising its share of global emissions to 3.5% by 2050, according to the International Energy Agency (IEA).
In the short term, natural gas can offer an immediate emissions reduction benefit when it replaces higher-emitting energy sources such as biomass, wood, coal and diesel. For example, by replacing coal with natural gas in electricity generation, Africa can achieve a 50% reduction in greenhouse gas (GHG) emissions and over 90% reduction in air pollutant emissions.
To remain on a long-term decarbonisation trajectory, the development of gas infrastructure and markets in Africa must also go hand in hand with the integration of variable renewable energy generation, carbon capture and storage, renewable gases and hydrogen.
Africa wants to harness its 18 trillion cubic metres of natural gas, 8.8% of the world's total discovered reserves, to balance pressing local development needs with lucrative export revenues.
Access to gas can provide stable electricity in countries without other low emission alternatives. Gas then helps to strengthen power systems so that they can integrate more renewable energy and begin to decarbonise energy supply by replacing biomass, wood, coal and diesel. In doing so, the development of domestic access to gas in Africa can meet the pressing demand for energy today, while also providing a basis for developing renewable and low-emission energy in the future.
By developing national gas markets and redirecting gas to its own energy needs, Africa also seeks to promote industrialisation, create jobs, diversify its economies, and produce fertilisers, petrochemicals, steel and cement to develop modern infrastructure.
For Africa to realise its vast potential, it urgently needs to adopt a pragmatic approach and be more competitive in attracting the billions of dollars that will be pumped into gas projects over the decade.
First, improving the environmental impact of gas operations is vital for the African gas sector to ensure its global competitiveness. There is an increasing urgency to effectively manage and eliminate methane emissions and to stop gas flaring.
To overcome financing difficulties, projects also need to be made more sustainable by demonstrating their climate value in order to unlock additional sources of capital at the national level. The regionalisation of African gas markets is another aspect to be promoted in order to take advantage of regional synergies and create more attractive economies of scale for investments.
Similarly, reform of electricity markets, development of carbon markets, and the adoption of scalable modular technologies are other solutions put forward to maximise the potential of gas in Africa. Finally, regulatory uncertainty and physical security risks that create an unfavourable business climate and discourage investment will need to be addressed.
To demonstrate the opportunities and solutions for increasing gas development while reducing emissions, the report offers several case studies, from Tanzania to Angola.
The Executive Director of the African Energy Commission, Rashid Abdallah, stressed:
"Natural gas is a resource that has an important role to play in socio-economic development and climate change mitigation in Africa. As part of a just transition, Africa needs gas to help eradicate energy poverty, providing electricity to nearly 50% of Africans, acting as a catalyst in providing clean cooking technologies to nearly one billion Africans and creating jobs. Calls for an immediate halt to all fossil fuel use and for global investors to stop funding gas projects will have serious implications for Africa's socio-economic development."
The CEO of the Africa Finance Corporation, Samaila Zubairu, said:
"The global energy market is in an unprecedented state of flux, opening up significant opportunities for gas exploration and development in Africa. At the same time, gas is essential to help Africa end its energy poverty quickly and cheaply, by providing an alternative to fuelwood. This would lift hundreds of millions of people out of poverty while preserving Africa's forests - a valuable carbon sink for the world. Gas also offers other solutions to Africa's food security challenges as it is needed for fertiliser production, while generating significant export revenues for reinvestment in renewable solutions.
The President of the IGU, Ms Li Yalan, reiterated:
"Access to modern energy in Africa is imperative for its development, for its capacity to respond to climate change, and for the gradual decarbonisation of its economies. Gas is one of the keys to unlocking this access, and it is also a fuel to produce the stable and flexible energy needed to integrate more renewables. By utilising its gas resources as well as renewable energy technologies, Africa can build energy systems compatible with a climate neutral or carbon neutral future and support the continent's sustainable economic development.
Director and Head of Research at Hawilti, Mickael Vogel, said:
"We are delighted to provide this comprehensive overview of Africa's natural gas dynamics, and hope that it will generate productive conversations and pragmatic actions to address energy poverty in Africa. As an Africa-based research and advisory firm, we will continue to highlight the diversity and complexity of African gas markets and their critical contribution to the continent's industrial development and just energy transition."
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