What could be the way forward for decarbonising Africa? Mcksinsey identified four different opportunities for the continent as discussed at COP27..
Building resilient low-carbon energy systems
Many African countries are quite dependent on thermal energy (from oil, gas, coal). In addition, demand for electricity in Africa is projected to double over the next 20 years. Therefore, to build out greener energy systems, Africa needs to consider a new mix.
In Nigeria, the greener energy system will require a significant build out of solar and wind energy, and a look at how the country relies on non-intermittent source (coal and gas) of power supply. However, as technologies such as hydrogen and long-term energy storage become more economically viable, they will play a much larger role in the long-term energy mix, backing out thermal power.
Climate change adaptation and resilience
Ethiopia is one of the countries in Africa that will be significantly impacted by climate change. In fact, by 2050 40% of small holder farmers in Ethiopia will face one risk. Mckinsey identified 33 adaptation solutions in Ethiopia which need to be tailored to the environment, as it will require new livestock management systems, expanded use of irrigation, and new ways to manage soil health.
It is worth noting that these levers may be very different in other countries and its cost is still unknown, which is why financing this adaptation pathway remains very important.
Nature and land use
65% of the Africa carbon sequestration potential comes from nature-based solutions. The existing solutions include avoided deforestation, agroforestry, as well as soil sequestration but also new methodologies such as blue carbon, mangrove and seagrass, as well as Savannah grassland management.
In total, this carbon potential can generate 35 to $60 billion of carbon revenue for Africa at a price of 15 to $25 per tonne.
Green business building
Ten opportunities have been identified for Africa to build new green businesses on the continent. These are based on economic potential as well as a feasibility to adopt them in Africa. For example, Africa can be very cost competitive to produce and export green hydrogen to Europe using solar.
Another opportunity is clean and transition metals as demand for battery metals will increase 5 to 24 times by 2030. The rest of the opportunities include businesses to support Africa’s energy transition, including manufacturer of solar and wind turbine, assembly of electric vehicles and bioethanol production. In total, these could create more than a million jobs on the continent by 2030.