[Column] NJ Ayuk: Oil and Gas industry and green advocates have a duty to make energy poverty history in Africa
11-08-2021 09:54:24 | by: Bob Koigi | hits: 1395 | Tags:

Oh look, it’s another heartfelt plea to help Africa.

In this case, the call to action has come from Frans Timmermans, the European Commission’s executive vice-president for the European Green Deal, and Fatih Birol, executive director of the International Energy Agency (IEA). In a recent opinion piece in Al Jazeera, “It’s time to make energy poverty in Africa a thing of the past,” Mr. Timmermans and Mr. Birol correctly describe the huge energy poverty problem in our continent, noting that nearly 600 million people in sub-Saharan Africa lack reliable electricity.

Africa’s solution, they proclaim, is to harness “cheap renewables and green investments” to meet the continent’s electricity-generation needs. And how will we achieve that goal? The world must come together, they explain, to drive (or perhaps even shove) African countries toward green energy and away from fossil fuels, full speed ahead.

“If we are to succeed in making energy poverty a thing of the past in Africa, we need the whole world to work in concert to put an end to funding overseas coal power, accelerate cooperation on expanding clean electricity in Africa, and scale up financial support from advanced economies,” they wrote.

At first glance, their op-ed appears to be a cri de coeur— a plea for the global community to rally together compassionately to help Africa overcome a pressing problem. But that’s not what it really is. Instead, it demands that a concerted effort be made to obstruct every approach to resolving African energy poverty but one: the authors’ own approach. The approach of the European Commission’s European Green Deal, and the International Energy Agency.

With all due respect, their way isn’t the only way. Many in Africa, including the African Energy Chamber, recommend a multi-pronged approach to addressing energy poverty, one that harnesses both renewable energy sources and fossil fuels. This is a better option, especially since it is designed to include Africa’s abundant, readily available natural gas in the continent’s energy mix. Gas especially most of Africa’s low carbon LNG, is the cleanest of all fossil fuels, and it can create a pathway to minimizing energy poverty through gas-to-power programs. It can also open the door to economic growth and diversification by serving as a feedstock for petrochemical production and fuel for industrial facilities. Imagine Nigeria giving up on Gas after passing its historic Petroleum Industry Bill. Same with Mozambique which is scheduled to be the third largest producers of LNG in the world. Senegal, Algeria, Congo-Brazzaville, Cameroon, Equatorial Guinea, Angola, South Africa, Tanzania, Mauritania, Egypt are all ramping up.

Expanding the production and use of gas within Africa would also give African countries something very important: more time to make sure that their people and businesses develop the capacity to reap the full benefits of renewable energy jobs and business opportunities. Giving Africa that extra time is a reasonable step to take. It’s certainly a more reasonable option than taking oil and gas off the table just to accommodate world leaders, businesses, and organizations that will never have to live with the consequences of such actions. Make no mistake, we in Africa will be the ones to live the consequences and yes, we will feel the pain.

And that brings up another point: the European Commission and the International Energy Agency are speaking for Africa, rather than using their position as global leaders to ensure that Africa gets to speak up for itself. In doing so, they’re falling into a pattern that’s as frustrating as it is familiar: They’re pontificating about Africa’s energy future without including the voices of African energy leaders.

This “we know what’s best for you” approach to Africa’s energy industry has become all too common. It’s the impulse that drives organizations like the IEA and the European Commission to insist that “cheap renewables and green investments” are the cure for African energy poverty (Let’s be honest, renewables are not cheap. If they were, it will be all over Africa). It’s the message that underlies many activists’ calls for boycotting companies and institutions that invest in African oil and gas projects.

I’m not saying African countries couldn’t benefit from the international community’s input. Far from it! Our energy industry welcomes (and needs) the ideas, the technological expertise, and the investments that foreign businesses and organizations can offer.

But we don’t need more calls to “help” Africa that are premised on interference with our energy investments especially in Oil and Gas. At present time, Africa does not need less energy, we need more energy that is abundant, cleaner, and affordable so we can create jobs, industrialize and do for ourselves what the aid agencies want to do for us. How about empowerment? I believe it is a better word and less patronizing than “Help”.

We do not need the international community to come up with more solutions for Africa’s energy poverty that disregard African priorities and voices,  no matter how big of a problem energy poverty is.

And we certainly do not need Western organizations to herd us onto a path that suits their priorities and ambitions for the energy sector, while setting aside the priorities and ambitions of Africans.

Giving Credit Where Credit Is Due

In their piece, the European Commission and the International Energy Agency claim that sub-Saharan Africa mostly has renewable energy to thank for recent strides in eroding its energy poverty. Specifically, they note that about 20 million people a year gained access to electricity between 2014 and 2019.  I am sorry this is nothing to be proud about. 5 million a year. This means in 2030 we will add an additional 40 million people. Think about Africa’s population growth. We will have about 800 million without electricity in 2030. This is immoral and wrong, and it is a human rights violation.

Undoubtedly, renewable energy did play a role in these gains. But let’s not ignore the fact that Africa’s abundant natural gas has had — and will continue to have — impact of its own.

Let’s not ignore the truth that natural gas produces less carbon dioxide than any other fossil fuel and can easily be integrated with renewable energy sources. This makes it a perfect choice for meeting Africa’s energy needs while keeping greenhouse gas emissions to a minimum.

And let’s not ignore that more than a dozen African states are already using natural gas that they produce themselves or import from other countries to generate electricity.  We need to ramp that up and boost more investment into that like nothing else.

One of these is Côte d’Ivoire. This country has become one of the top electricity producers in West Africa over the last decade, and it even sells surplus electricity to six other African countries. Much of that electricity is generated by gas-powered plants.

Energy access in Côte d’Ivoire has been increasing since 2012, when the government introduced regulations that encouraged private infrastructure investments. Thanks to those efforts and public-private investments, access to electricity in Côte d’Ivoire skyrocketed from 34% of the population in 2013 to approximately 94% today. Côte d’Ivoire also became the first African country to convert its energy plants to combined-cycle systems, which use exhaust gases to help produce electricity, thereby conserving natural gas and doubling generating capacity. Now this are free market practices that other African countries can learn from and the European Commission and the International Energy Agency could push for further investments.

Going forward, Côte d’Ivoire plans to add more renewable sources to its energy mix while continuing to harness natural gas. It will, for instance, add another 390 MW to its total installed capacity in 2022, when it opens a new combined-cycle gas-fired power plant in Jacqueville.

We also can look to Tanzania, which uses domestically produced gas to fuel power plants with a combined capacity of 607 MW, equivalent to 45% of the country’s total grid installed capacity. The 150 MW, gas-fired Kinyerezi-I thermal power station has been described as one of the most successful gas-to-power projects in eastern Africa.

Another encouraging example is Senegal, which has more than 450 billion cubic meters of gas in proven reserves. President Macky Sall has made it clear and outlined plans to supply more gas to domestic consumers, with delivery volumes increasing as its large offshore fields begin production, and will use the fuel to increase the country’s electrification rate to 100% by 2025. To achieve this goal, President Macky Sall and Senegal are expanding its installed capacity through the construction of such facilities as the 300-MW Cap des Biches combined-cycle gas-turbine power plant.

Additional gas-to-power projects are on the way in other countries, including Mozambique, where the 400-MW Temane power plant and 250-MW Nacala district plant are in the works; Nigeria, where Sahara Group is expanding its 1,320 MW Egbin Power facility to add another 1,754 MW of capacity; Equatorial Guinea’s Akoaga LNG to Africa Power project built by a consortium local contractors and world class foreign companies and Cameroon, which is planning to boost the Limbé power station’s capacity by 265 MW.

When global capability meets personal responsibility, Africa grows because we become Innovative, efficient and accountable. So, no, harnessing renewable energy is not Africa’s best hope of wiping out energy poverty. It’s only one piece of the puzzle.

Don’t Leave Africans Out of Africa’s Energy Transition

Another big piece of the puzzle involves including Africans in the process.

This is one reason why fossil fuels are so vitally important for Africa. Natural gas and crude oil don’t just provide Africans with reliable electricity. They also provide Africans with a wide range of employment and business opportunities across the continent in the realms of upstream exploration and development, transportation, refining, marketing, and petrochemical production.

It is these opportunities that have driven African governments to spend years developing and fine-tuning local content policies to make sure that Africans reap the rewards of oil and gas activities in their countries. Are we truly confident that the same approach will be taken to renewable energy?

We have to ask: Where are the local content policies in the European Green New Deal that they want to impose on Africa? Are there programs that will empower African women, as African organizations, companies, and businesses are finally starting to do? What about human rights and good governance? What Free Markets, individual liberties, limited government and property rights?  Are there capacity-building initiatives that will prepare Africans to assume renewable energy jobs at all levels, from labor to leadership roles? How will this be finance? Development aid? More loans to African states that end up in Swiss bank accounts by the same radical revolutionary leaders that we support even when they hurt Africans?

Also, if a one-size-fits-all energy transition is forced on the continent, can we truly be sure that it will do more good than harm for Africans?

Take a look at solar energy; currently, less than 10% of the world’s off-grid companies are African – and many of them are relatively small. So if we rush the switch to renewables especially with the deal from the European Commission and the International Energy Agency, the chances are good that few (or practically none) of the companies involved in filling the vacuum will be based in Africa. And if foreign firms lead the way, they will, in all likelihood, hire people from their own countries to take the jobs they create before they hire Africans. Here we go again with the good old past. Africans need the jobs, contracts and empowerment not help.

Even in areas where African independent power producers (IPPs) have entered the renewable energy sector, these companies will likely struggle to compete with their foreign counterparts. I’ve already seen scenarios like this play out. In 2017, for example, about 10 Tanzanian-owned solar home system (SHS) providers were put out of business by foreign SHS companies that used grant money from western institutions to push down their prices. This worked out well for the European and American investors armed with grant and aid money — and not so well for their local or African counterparts. As I travel and work around Africa, I have seen the scenario repeating itself all over the continent. We have no choice but to forcefully speak out and speak up for African businesses. Not always the comfortable place to be because we are likely to get attacked and possibly cancelled. 

We don’t want to repeat these experiences, no matter how urgently outside organizations inform us of the need for energy transition. Instead, we want to create a level playing field for Africans, so they aren’t left out of opportunities in their own countries. We need more local content regulations geared for renewable energy sectors, capacity-building programs, and financing initiatives for local entrepreneurs. And to do that successfully, we’ll need time – the kind of time that fossil fuels can give us.

Our position on energy poverty makes it clear how I feel about this problem and why I’m convinced we must harness Africa’s natural gas to help alleviate it. OPEC’s leadership puts it like this: We cannot ignore the needs of millions in our zeal to prevent climate change.

“We must be inclusive and equitable in our decisions, and not forget our fellow citizens who, day in and day out, struggle for access to energy the rest of the world takes for granted,” Secretary General Mohammed Barkindo said at the 2020 at the International Carbon Capture Utilization and Storage Conference. “The facts are sobering: there are more than 800 million people around the world who lack access to electricity and almost three billion who live without modern fuels for clean cooking. Let me be clear: Nobody should be left behind in the energy transition.”

Barkindo revisited the topic in January 2021. While addressing the S&P Global Platts Americas Petroleum and Energy Conference, he noted that failing to rectify energy poverty not only hurts those without reliable power, but it also could also lead to unrest.

“If billions of people in the developing world suffering from a lack of energy access feel they are excluded from access to energies that have helped fuel the developed world, then this could sow further divisions and expand the divide between the haves and have nots, the global North and the South.” Barkindo noted.

I believe we need some pragmatic commonsense discussions and solutions to this while using fair minded words, calming down the rhetoric and refrain from the demonization of oil and gas companies and producing states. Africa does not need more aid workers, but capital and I mean patient capital that will let businesses innovate, grow and provide the much-needed energy we need for jobs. 

Your Way is Not the Only Way

The European Commission and the International Energy Agency do make solid points about the continent’s struggles, from energy poverty to the devastating impact of the COVID-19 pandemic and financing challenges.

But ultimately, their piece looks like yet another argument for shifting Africa’s transition from fossil fuels to renewables into high gear — and in the manner prescribed by international organizations, not as Africans themselves might do it. This time, though, it’s disguised as a strategy for solving our energy poverty crisis.

If energy poverty is really the problem, it’s disheartening to see calls for ceasing overseas funding for coal projects that would give the continent’s power production a boost. Whether we’re talking about coal, gas, or crude oil activities in Africa, outside organizations have no business interfering with our investment opportunities or pressuring energy companies not to do business here. That’s why the African Energy Chamber has announced that it will encourage African countries to boycott companies that boycott African oil and gas.

As the Chamber stated, “We cannot expect African nations – which together emitted seven times less CO2 than China last year, and four times less than the US, according to the Global Carbon Atlas — to undermine promising opportunities for economic development by simply aligning with the Western view of how to address carbon emissions.”

There is still an outstanding invitation to the African Energy Week, taking place in November in Cape Town, for the European Commission and the International Energy Agency. They will be able to join more than 50 African Energy, petroleum, Finance and Environmental Ministers, OPEC, GECF, APPO, ARDA, IAGC, the American Petroleum Institute, the Canadians, Americans, Germans, and many oil, natural gas, renewable companies to discuss an African Energy Transition and a way forward under the theme “Making Energy Poverty History by 2030”. It’s a win-win and we hope they get involved and not stand idle by and lecture Africans from Europe.

So, if the European Commission and the International Energy Agency are issuing a call to help Africa by getting rid of oil and natural gas, the response of the African Energy Chamber is: No thank you; but we want to have a discussion and learn from one another. We’d rather see Africans help themselves by working with investors not aid workers. No matter how much empathy the global community shows about Africa’s strengths, opportunities, and challenges, no one will be more insightful, or more driven, to find the best solutions than the people who call Africa home and the European and American investors who use free market principles to do business.

We’d rather see Africans help themselves by working with investors not aid workers alone.

Let’s put an end to rallying cries to help Africa, even when it comes to a problem as massive as energy poverty. Let’s commit to working with Africa instead and Make Energy Poverty History.

NJ Ayuk is Executive Chairman of the African Energy Chamber and CEO of Centurion Law Group