- Africa stands at crossroads, balancing harnessing of its vast fossil fuel resources against a global call to embrace renewable energy.
- Across the continent, the deployment of renewable technologies is not happening as fast as needed to reach 2030 targets.
- Innovation and policy resets to drive renewable energy transition in Africa are needed in the face of new oil finds.
The drive to embrace green energy in African economies poses a challenging dilemma: invest in emerging technologies or stick with the tried-and-tested approach of tapping into lucrative oil and gas reserves. Consider Tanzania, for example. Late last year, the country reaffirmed its commitment to oil exploration by announcing plans to further collaborate with Saudi Arabia to bolster its nascent energy sector in the wake of massive gas find.
During a meeting in Riyadh, Saudi Arabia, in December 2024, Tanzania Deputy Minister of Energy, Judith Kapinga, noted that the East African country is keen on prioritize gas exploration while at the same time championing the usage of clean cooking energy, and renewables across industries.
She made these remarks when she met with the Deputy Minister of Energy of Saudi Arabia, Engineer Mohammed Albrahim, where she also revealed that Tanzania has been working with Saudi Arabia in oil trade and other areas of development.
“Due to the increasing demand for energy and the need for more investment to develop the energy sector, there is need to work together with energy leaders like Saudi Arabia,” she explained.
“Tanzania’s relationship with Saudi Arabia in the energy sector is long-standing, and both countries have aimed to improve their cooperation to develop the energy sector,” media quoted the minister.
Certainly, Tanzania stands at a pivotal crossroads, balancing the exploitation of its fossil fuel resources against the growing global momentum toward renewable energy adoption—a dilemma shared by many economies worldwide.
“Translating into action the ambitious climate targets that have been put in place by governments and companies depends on accelerating the deployment and adoption of several interrelated technologies,” author and researcher Nicola Zanardi notes in a report titled ‘The energy transition: Where are we, really?’
Zanardi adds that the interrelated technologies that are needed to make the energy transition successful include renewable energy sources, electrification technologies such as electric vehicles, and heat pumps—as well as comparatively less mature technologies, such as carbon capture, utilization, and storage, green and blue hydrogen, and sustainable fuels.
“These decarbonization technologies are the cornerstone of efforts to reduce greenhouse gas emissions… The period until the end of this decade is a critical one to put in place a trajectory of accelerated adoption to meet 2030 and 2050 targets set by countries and companies,” she explains.
The report recognizes that significant progress has been made in developing and deploying some of these technologies, notably solar and wind, however, still, a significant gap has emerged between the actual results and the expected ones.
“The deployment of these technologies is still not happening as fast as needed to reach 2030 targets, moreover, the technologies are at risk of facing raw material and labour shortages,” she goes on to warn.
There are some key hurdles to the deployment of these technologies, the report says. First is the business case, are their tangible profitable returns associated with the technologies? If the economic returns are not certain, then businesses remain skeptical, she cautions.
Then there is the question of policy predictability for developers. If investors fear that policy will not change fast enough, or change at all, they are likely not to invest in renewables and stick to fossil fuels.
There is also the fact that, most of the renewables technologies are not yet cost-competitive for consumers. So, as long as the technologies remain expensive it is hard for the public to uptake them in large masses and as such, investors also shy away from large productions.
“Ultimately, technology-focused enablers have not yet managed to address the challenges posed by macroeconomic shocks, geopolitics, and what it takes to enable tech ecosystems,” the author points out.
According to the report, research results shows that; “Corporate, public, and private equity investors are hesitating about deploying capital, also, invested capital is behind where it needs to be to ensure deployment targets are met.”
“As it stands, a significant proportion of announced projects have not yet reached the Final Investment Decision stage at which projects are greenlit, meaning that there is a continuing risk of cancellation,” he warns.
The researcher says; “Facing this hard truth, innovation and policy resets will be needed for the increasing number of country and company net-zero commitments to be achieved in practice and move projects to FID and quickly beyond to subsequent deployment.”
Given these facts, the researcher advices on the need for rigorous and fact-based assessment of real-world progress of the deployment of these technologies. “This is the key to ensuring that momentum is maintained, and the energy transition continues at the necessary pace,” she insists.
Read also: Energy transition: Why Africa’s race to net-zero is moving too slowly
Is renewable energy transition beneficial to Africa?
According to the International Renewable Energy Agency (IRENA); “If accompanied by an appropriate policy basket, a systematic shift of Africa away from fossil fuels towards an energy system based on renewable energy could lead to 6.4 per cent higher GDP, 3.5 per cent more economy-wide jobs, and a 25.4 per cent higher welfare index throughout the outlook period of 2020 to 2050.”
IRENA notes taht two of the most notable opportunities associated with the energy transition in African countries include greater fiscal stability and job creation. “For many African energy importers, renewable energy holds great potential to reduce vulnerability to the external shocks caused by movements in the price of fossil fuels,” IRENA writes in a World Economic Forum report titled ‘Renewables could do much more than just transform Africa’s energy sectors. Here’s how!’
In the report, IRENA states that renewables play a central role in creating jobs; “because investing in energy transition technologies creates up to three times as many jobs as fossil fuels per million of dollars spent.”
According to the report, for Tanzania and other countries facing the renewable energy transition dilemma, embracing green power has the potential to outweigh opportunities lost by holding onto traditional energy.
The pressing question is: how prepared are Tanzania and other African nations to transition to renewables, especially as new oil discoveries continue to be announced across the continent?
