Africa Press-Nigeria:<\/p>\n
Plummeting oil prices, exacerbated by the coronavirus pandemic, have left Africa\u2019s oil and gas producers staring at the bottom of the barrel. Renewables could offer them a way out.<\/p>\n
Months before Covid-19 triggered a historic oil price crash, there were signs that the market was already in ill-health.<\/p>\n
In December 2019, Nigeria\u2019s environment minister warned that the days of fossil fuels were numbered amid worries about climate change, which had spooked investors.<\/p>\n
Then a brawl between Saudi Arabia and Russia in March saw oil prices tumble to around $20 per barrel, forcing Africa\u2019s largest oil producer Nigeria, and others, to sell at a loss.<\/p>\n
When Covid-19 broke out, it hammered global demand for transport, stopping people and goods from travelling. This dealt a further blow to African economies heavily reliant on oil.<\/p>\n
\u201cAfrica has definitely been affected,\u201d says Elizabeth Rogo, president for East Africa at the Africa Energy Chamber, a specialist network that follows the African energy industry.<\/p>\n
\u201cWe\u2019ve seen substantial cuts to state budgets, as well as public funding and mounting job losses,\u201d she told RFI.<\/p>\n
Overstretched<\/p>\n
The loss in oil revenue has stretched governments\u2019 resources and complicated their fight against Covid-19.<\/p>\n
\u201cIf you look at the big African producers like Nigeria, you are seeing a huge loss and contracts being put on hold across the continent,\u201d explains Rogo, whose company released a report calling for action to shield producers from Covid-19 and the oil price war.<\/p>\n
The oil slump has derailed drilling and offshore projects not only in Nigeria but in places such as Senegal, Mozambique, Ghana and Angola, the continent\u2019s second largest oil producer.<\/p>\n
There was cautious optimism last Wednesday, when oil prices climbed to $35 per barrel on the back of loosened lockdown restrictions in several countries.<\/p>\n
But while some market experts may be rejoicing, others are saying it is time for African governments to look beyond oil to renewables.<\/p>\n
Lights on<\/p>\n
Awash with water, sun and wind, the African continent has \u201cmore resources than it even needs,\u201d says Eddy Njoroge, former Director of KenGen, Kenya\u2019s largest energy company, and in charge of overseeing its renewable transition.<\/p>\n
\u201cIf you just look at hydropower, the potential within the continent is huge,\u201d he told RFI.<\/p>\n
Major dam projects such as Ethiopia\u2019s Grand Renaissance Dam could quadruple the country\u2019s electricity-generating capacity from about 2,200 MW to 8,700 MW when it is finished. While the Congo river, if it is ever built, could generate 40,000 MW, enough power to light up South Africa.<\/p>\n
\u201cBut when it comes to the non-traditional renewables like solar energy, that is where there is a lot more potential,\u201d Njoroge reckons.<\/p>\n
African countries are increasingly turning to solar photovoltaic technology to bolster energy supply in a continent where some 620 million people, mostly in villages and farms, still live without electricity, according to the Africa Progress Panel.<\/p>\n
Renewable path<\/p>\n
\u201cWe have solar irradiations which are much higher than anywhere in Europe,\u201d continues Njoroge.<\/p>\n
\u201cCompared to Germany, which has 1,500 kilowatts per square meter, in Africa most places are well above 2,000,\u201d he tells RFI.<\/p>\n
Added to that, the price of renewables has dropped, making them as competitive as oil and gas. And with no fuel costs, renewables have weathered the pandemic slightly better than their dirtier counterparts despite some disruptions to supply chains.<\/p>\n
\u201cThe major challenge is storage,\u201d cautions Njoroge, referring to the difficulty of storing sunlight. \u201cYou need huge, huge batteries\u2026 Once we resolve this issue, I see solar becoming the main supply across African countries.\u201d<\/p>\n
For the Africa Energy Chamber\u2019s Elizabeth Rogo, the transition will take time.<\/p>\n
\u201cWe can\u2019t just throw away oil and gas and go into solar or wind or geothermal,\u201d she comments.<\/p>\n
\u201cNone of these renewables by themselves are able to sustain the growth of an economy. It hasn\u2019t happened, it will happen in the long run, but while we still have oil and gas, let\u2019s look at how we can improve,\u201d she says, suggesting that technology from fossil fuels could be transferred to renewables.<\/p>\n
Regional integration<\/p>\n
Such comments are unlikely to go down well with climate activists who have urged for 2020 to be the year of action against climate change, and for fossil fuels to be left out of the picture.<\/p>\n
While climate change may not be the immediate priority for African governments recovering from disruptions to the oil market, experts agree that energy independence post-Covid should be top of the agenda.<\/p>\n
\u201cThere needs to be a major shift,\u201d comments renewable specialist Eddy Njoroge.<\/p>\n
\u201cInstead of exporting so much gas and crude, African producers need to ask themselves, \u2018What is it that we can do with this crude, this gas, internally to make sure that we help our own industries within the continent?’\u201d he says.<\/p>\n
One way is through regional integration reckons Rogo.<\/p>\n
She says emerging players like Uganda, which is hoping to extract its first drops of black gold in the coming months, needs its neighbours.<\/p>\n
\u201cUganda is landlocked and therefore all the equipment that\u2019s required will have to come through the ports of Mombasa in Kenya, the port of Tanga in Tanzania and taken by road into Uganda,\u201d she explains.<\/p>\n
Lessons learned<\/p>\n
Fortunately, African governments have already started doing business together under the African Continental Free Trade Area, making further cooperation feasible.<\/p>\n
\u201cYou\u2019re looking at what would be the longest electrically heated pipeline in the world, known as the East Africa crude oil pipeline,\u201d continues Rogo. \u201cSo, by the project\u2019s nature, there is going to be a lot of regional interaction.\u201d<\/p>\n
And, Njoroge hopes, more independence.<\/p>\n
\u201cOne of the lessons that we have learnt, that we are learning is that we need to stop being too dependent. We were very dependent on China in a lot of things,\u201d he says.<\/p>\n
The volume of trade between China and Africa reached a record $208.7 billion last year, leaving many African economies in the lurch when the coronavirus shrunk Beijing\u2019s economy.<\/p>\n
Going forward, Njoroge says: \u201cThere needs to be a shift for people to say, \u2018It is time to start moving towards local industries and local manufacturing within the continent.’\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Africa Press-Nigeria: Plummeting oil prices, exacerbated by the coronavirus pandemic, have left Africa\u2019s oil and gas producers staring at the bottom of the barrel. Renewables could offer them a way out. 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\u2019s environment […]<\/p>\n","protected":false},"author":62,"featured_media":2577,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[1451,228],"class_list":["post-25584","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-covid-19","tag-oil-production"],"yoast_head":"\n