COP27 Provides Opportunities for Africa’s Clean Energy Future – Wärtsilä 

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Climate change conference, COP27, will offer a unique opportunity to increase energy access and lay the foundations for decarbonisation across Africa. Wealthy nations, however, must deliver on their climate finance pledges to unlock the continent’s potential, according to a new report, ‘Pathways for Africa’s Energy Future’, by technology group, Wärtsilä.

The report provides power system modelling of three African countries, Nigeria, South Africa, and Mozambique and finds that they can leapfrog some developed nations by not embedding inflexible fossil fuel-based systems. To enable such a massive transformation a combination of climate finance, effective planning and system reforms will be essential.

The report demonstrates that replacing coal with clean energy combined with energy storage and battery systems, is the most effective way to reduce energy costs, increase energy access, and improve sustainability and reliability. The modelling found that renewable energy and flexibility can generate enough energy to provide power for close to 100 million people who currently do not have energy access in South Africa, Mozambique, and Nigeria. These systems will require a total investment of approximately $119 billion over the next decade, which will not be possible unless wealthy nations deliver on the promise made in 2009 to deliver $100 billion annually in climate finance from 2020.

“Despite contributing less than 3% of the world’s energy‐related carbon emissions, African countries are among the hardest hit by climate change,” stated Håkan Agnevall, President and CEO, Wärtsilä Corporation, adding, “COP27, hosted in Egypt, is the perfect opportunity to deliver on global climate finance pledges so that, as a global community, we can seize this moment to act and unlock Africa’s renewable potential. That investment must be combined with effective planning and system reforms to increase energy access and create the renewable energy systems of the future.”

Wärtsilä modelled power system decarbonisation pathways for three countries in Africa, find that Nigeria can cut electricity costs by 74% on its path to net-zero by 2060. The company’s modelling shows that Nigeria can build a 100% renewable net-zero power system by 2060, comprising around 1,200 GW of clean capacity, in line with its ’30-30-30’ and net-zero targets, with the cost of electricity generation predicted to drop by 74% by 2060 compared to 2020 levels and emissions dropping to zero.

According to the report, South Africa can solve its load shedding dilemma and save up to $26 billion by 2032. By adding 40 GW of wind and solar PV generation. The country can build a power system that would meet current and future energy demand. This can deliver a 17% reduction in power system emissions and reduce energy system costs by $10 billion per year by 2032.

Additionally, Mozambique can reduce emissions and save $84 million. By adding 200 Mw of low-cost renewable energy annually, the southern African country can build 3 GW of clean capacity by 2032, supported by 205 MW of new energy storage capacity and 1 GW of grid balancing engine capacity, thus cutting 5.6 million tons of carbon emissions between 2022 and 2032, saving an estimated $84 million on the cost of electricity production.

Wärtsilä produced this modelling using independent market simulation software, PLEXOS, to support African countries that wish to shape multi-year plans and develop optimal power systems for the future. Across the continent, countries can help to stimulate investment by setting out clear strategies to build well-functioning flexible renewable grids, thus showcasing the new opportunities those conditions create – such as green hydrogen production. Regulatory reform is also needed to place a value on flexibility and encourage the market, laying the foundations for more flexible and reliable grids to support high levels of renewable energy, while increasing energy access.

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Energy Capital & Power is the African continent’s leading investment platform for the energy sector. Through a series of events, online content and investment reports, we unite the entire energy value chain – from oil and gas exploration to renewable power – and facilitate global and intra-African investment and collaboration.

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