It may be surprising to discover that Africa is in some ways at the forefront of global decarbonisation. In the same way that Africa leapfrogged the telecommunications transition – moving from no phones to mobile phones for many consumers, skipping the landline – Africa is currently leapfrogging the Energy Transition.
Electrification rates in Africa are so low that it is one of the world’s largest markets for remote power. Utilities have struggled to connect many residents, businesses and industrial facilities to the grid. In many cases, the grid is unstable, unreliable, and expensive, with frequent power outages.
As a result, energy consumers – whether residential or large industrial – have had to provide their own back-up power, usually from very expensive diesel gensets or HFO.
Remote power costs in Africa can cost in the range of $0.20-55c/kWh. Meanwhile, solar costs have plummeted over the last decade and are currently being priced around 10x cheaper than these diesel costs. While solar is variable and intermittent, batteries are following the price decreases of solar, and in many cases, a combination of batteries and solar, and if bolstered by wind, can offset more than half a consumer’s off-grid diesel consumption on an annual basis.
As solar and batteries have become an economic no-brainier, Cresco has been supporting dozens of Africa’s largest energy consumers to effectively evaluate, procure and implement the most cost-effective and reliable solutions to incur energy savings. This is happening throughout the continent.
“Africa is uniquely positioned to capitalize on the Energy Transition for a number of reasons.” Says Cresco Decarbonisation Solutions Senior Associate Dominic Goncalves. “Many of the minerals we need to drive the energy transition and decarbonise towards Net Zero are found in Africa: the raw materials mined in Africa are the key components to be found in solar panels, wind turbines, batteries and energy storage technologies, and even hydrogen. Many large mines are increasingly producing such raw materials for the clean energy sector which has become a very fast-growing new profile of client, and meanwhile are incorporating clean energy at their own mines to save electricity costs – creating circular economies.”
While Africa has a risk that it can lose out on beneficiation as has happened frequently in the past, African countries can set strong localization standards to build up local capacities and value.
Cresco is currently supporting some of Africa’s largest and most strategic mines and industrial operations, and has evaluated more than 200 bids for more than 20 of the continent’s largest energy consumers over the past few years. This ‘hot spot’ for global decarbonisation caused by natural market forces of expensive fossil fuel power, cheap renewables, and fast evolving batteries and supplementing technologies – has provided Cresco with unique insights and learnings in this space. Please contact us for inquiries of how we can support you to decarbonise your power system and incur savings, while planning for Scope 3 emissions reduction and how to navigate the fast-changing energy transition.