Electricity demand in Africa to rise by 4.1% in 2025

Electricity demand in Africa has been projected to grow in the next two years. According to the International Energy Agency (IEA), the continent shows much stronger growth of an average of 4.1 percent, led by a post-crisis economic recovery.

The latest electricity market report by the agency further revealed that electricity demand in Africa rose by 1.5 percent in 2022, with growth tempered by both lofty energy prices and high inflation rates.

'Electricity demand in Africa increased by an estimated 5.7 percent in 2021, rebounding from a 3.3 percent decline in 2020 due to the Covid-19 pandemic's impact on the economy. We estimate that electricity demand in the region grew by 1.5 percent in 2022, down from our previous forecast of four percent,' the statement read.

According to the IEA, Russia's invasion of Ukraine triggered a downward revision in economic growth prospects in Africa due to a

combination of record-level energy prices and high inflation rates,

which weighed heavily on our forecast for electricity demand across

the region.

'In addition, electricity consumption in South Africa, the continent's largest electricity consumer, was revised lower because of production capacity constraints that turned out to be worse than previously expected.'

The IEA said that the natural gas-fired output, which accounted for an estimated 42 percent of Africa's electricity generation in 2022, remained stable in volume compared to 2021.

However, coal and nuclear (accounting for a respective 27 percent and 1 percent share of Africa's generation mix) both saw their output decline in relation to supply shortages, while oil-fired generation jumped by an estimated 24 percent year-on-year. The supply from renewables (24 percent of the generation mix) increased by 2 percent in 2022.

'Electricity demand growth on the continent is expected to rebound

in 2023 to over 3 percent, thanks to an improvement in South African production capacity as well as slightly enhanced macroeconomic conditions, followed by an average 4.5 percent regional growth for 2024 and 2025.

'The large majority of incremental generation by 2025 will come from renewable sources, followed by natural gas. We expect electricity delivered from renewable sources to increase by over 60 Terawatt-hour (TWh) in 2023-2025, to reach almost a 30 percent share of total generation by the end of the forecast period (from 24 percent in 2021), replacing coal as the second largest source of electricity in Africa,' the IEA said.

Meanwhile, natural gas is expected to remain the largest source of electricity in Africa through 2025, rising by around 30 TWh from 2022 to 2025, to close to 400 TWh. However, despite this increase, gas sees its share in the power generation mix decline slightly from 42 percent to 41 percent over the same period as renewables expand.

According to the agency, coal-fired electricity generation is expected to remain stable in output at around 240 TWh, declining in terms of share from 28 percent in 2021 to 24 percent in 2025.