Considering its novelty and potential for supporting energy transitions in developing economies, it is not surprising that the concept of a just energy transition partnership (JETP) has attracted significant global interest. Indeed, the G7 group of countries has signalled the possibility of negotiating similar partnerships with coal-reliant emerging economies such as Indonesia, Vietnam and India, but also Senegal, a growing gas producer. 

In Africa, as one would expect, other fossil fuel-producing countries, including Nigeria, that are contemplating the economic and social consequences of energy transitions, are considering their own JETPs for climate-friendly energy development. This raises questions about whether all other African countries need such a “bilateral” agreement, and about the implications of such partnerships for regional and continental energy development strategies.

Addressing these questions requires careful consideration of the diverse energy system challenges across Africa, the progress and challenges of regional power-sector development, and potential trade-offs and complementarities between JETPs and regional power projects.

Who needs just a transition partnership?

Consider first the diversity of Africa’s energy landscape. 

African countries have diverse energy structures and levels of infrastructure development and thus varied energy system issues in terms of electrification rate, carbon intensity, and capacity for renewable energy transition, which means each country has a distinct solution space in terms of meeting Sustainable Development Goal 7 targets for energy access and renewable energy transition.

Read in Daily Maverick: “Rolling blackouts and the necessity of a just energy transition – the facts and the fiction”

As a reminder, JETPs are in support of global climate goals. They are meant to decarbonise carbon-intensive power systems by phasing out fossil fuels (especially coal) while increasing the share of renewables in the energy mix. Additionally, considering the gap between the finance needed and funds provided under South Africa’s JETP, it is apparent that such a partnership counts on a supportive environment to mobilise additional local and international capital, including concessional and grant funding, as well as guarantees.

In both regards, only a few countries, apart from South Africa, can be considered perfect candidates for JETPs, notably Nigeria, Egypt and Algeria. 

First, these countries are among the top five polluters on the continent, whose energy sectors are the key sources of emissions. Moreover, in terms of an enabling environment, the relatively favourable position of these countries can be inferred from metrics in the World Bank’s Readiness for Investment in Sustainable Energy report on the quality of national policy and regulatory environments for attracting investment into sustainable energy, and from measures including the World Economic Forum’s Global Competitiveness Index (See the figure below).

The need and enabling environment for an accelerated energy transition.

However, for most other African economies, an accelerated energy transition under JETP-like structures is hardly justified. 

For one thing, energy-related emissions from these countries are minimal, and for most of them the energy sector is not the top emission source. Indeed, in 2019, for instance, this sector was the top source of emissions in just 16 African countries. For the remaining majority, agriculture (20), land-use change and forestry (17), and industrial processes (one) were the largest sources. On the other hand, country context and energy markets are mostly unfavourable in attracting private-sector investment into renewable energy.

Accelerating energy access: the primary energy system challenge of many

In 2019, Egypt was one of four African countries with 100% electricity access. On the other hand, Algeria and South Africa had a 99% and 85% electricity access rate, respectively, while only 55,4% of Nigerians had access to electricity. 

Thus, with near universal energy access, the primary energy system challenge for these countries is decarbonisation – except that Nigeria presents a unique case of a country that combines a highly polluting energy system with a low electrification rate. With their high greenhouse gas-emitting power systems, radical renewable electricity generation innovations under a JETP-like structure are justified for these countries.

For the majority of other African countries, however, the most significant energy system challenge is electricity access, which is less than 50% in most and dropping to less than 1% in rural areas (See Figure 2).

Overall and rural electrification rates by country, 2019.

For these countries with low energy-related emissions with limited energy access, the immediate priority is to improve energy access to enable sustainable development and create better livelihoods – transitioning to cleaner energy sources is only a complementary priority that should manifest variously across these countries in terms of timing and modality. 

Country context, enabling environment and energy transition outcomes

It is crucial that energy transition measures and support strategies, including JETPs, are aligned with energy systems priorities and the broader enabling environment of individual African countries if goals of economic transformation, job creation and affordability of clean energy output are to be realised.

Interestingly, key features and outcomes of auctions for renewable energy-independent power projects across Africa show the importance of country context and national enabling factors for both price outcomes and scope for a local content requirement. 

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Thus, while South Africa’s relatively attractive market and high industrial capacity have led to some of the lowest auction price outcomes (at less USDc 5/kWh) and local economic development through local content requirements, the risky environments of other African markets is apparent in the high price outcomes (about USDc 16/kWh in Uganda, for example) and limited consideration of local content requirements in programme design. That is to suggest that without considering such country-level enabling factors, indiscriminate promotion of energy transition could have price and cost implications as well as potential local benefits in industrialisation and employment.

Main features and outcomes of renewable energy auctions.

With this in mind, energy transition for most African countries necessarily entails a pragmatic approach that allows for a gradual transition from fossil fuels and the use of a wide range of “cleaner” energy sources, including gas, while adapting support measures and their design to a particular context to ensure consistency with the larger context of the policy in the country.

Regional power integration, energy access and power-sector decarbonisation

Meanwhile, regional power system integration, with a focus on transboundary interconnection and power trade, is a cost-effective means to accelerate energy access and decarbonise Africa’s power grid. It could help avoid fragmentation and inefficient power investments at national level.

Even though the continent is home to several regional power pools and cross-border interconnections, African power pools have generally had to contend with insufficient investment in shared generating and transmitting infrastructure, a lack of trust among states, a nationalistic outlook on electricity planning, poor regulatory and institutional space and a preference for bilateral over regional agreements. In effect, most African energy markets remain effectively isolated since existing cross-border power infrastructures remain either limited or underused despite efforts to develop functional regional electricity markets.

Despite a grand continental vision of connecting all African power pools to form an African single electricity market, the slow pace of infrastructure investments in interconnected transmission, distribution networks and storage remains a significant bottleneck to cross-border power trade. Underpinning such infrastructure gaps across the power pools is the dearth of finance.

The Programme for Infrastructure Development in Africa exists as a joint initiative of the African Union Commission, the African Development Bank and the New Partnership for Africa’s Development Planning and Coordination Agency and has a clear list of necessary, bankable infrastructure projects with highest potential impacts for energy access (Anuga & Njenga, 2022). However, the coordination of external development partners in support of priority regional energy projects and related harmonisation of regulatory frameworks required for regional electricity trade is yet to be realised. 

While the EU, for instance, is a crucial partner, progress on these regional projects calls for the presence of other and more international actors, donors, funding partners or creditors. Indeed, while the challenges to achieving functioning power pools go beyond financial and technical challenges to include political economy constraints pertaining to the nonalignment of interests among role players, the vulnerabilities that hinder the development of regional energy integration could be mitigated if international actors contributed, pragmatically, to fostering “positive interdependence” through support in developing priority transnational infrastructure. 

Implications of JETPs for investments in regional power integration

Considering the limited coordination of internal development partners in support of regional power interconnections and trade, the emergence of JETP-like structures raises questions about whether such “bilateral” arrangement structures could hold back progress on regional projects by using African governments’ time and energy to negotiate smaller country-by-country projects and the conditions for the private sector to feel more comfortable investing.

In a sense, a JETP should not necessarily detract but rather be complementary to regional projects if one considers the unique energy system challenges of potential candidates of JETP. However, the complementarity of the JETPs hinges greatly on simultaneously fast-tracking the funding of critical regional projects and the development of regional electricity markets to allow for the trade of renewable energy within African subregions to meet ambitious, scaled-up Africa-wide targets for both the environment and development. Certainly, donor coordination among the International Partners Group under JETPs could serve as a model for supporting investments in regional power interconnections and promoting power trade. 

Without concurrent support to fast-track investment in planned or ongoing large-scale regional energy infrastructure and facilitating a multilateral trading system, support for the energy sector at the national level, including JETP deals, will have several adverse implications, including:

1. Inefficient power system investments due to focus on national self-sufficiency rather than an intercountry perspective;
2. Limited integration of variable renewable energy into power systems;
3. Export of cheaply generated renewable energy outside Africa, amid energy poverty; and
4. Hampering the potential emergence of regional value chains in renewable energy technology products.

Conclusion

In summary, the diversity of energy system support required across Africa calls for comprehensive and coordinated support measures, exploiting complementarities where possible. Aligning energy development support with individual country energy issues and needs means that while energy transition could be the priority in some countries, the primary challenge could be increasing energy access and reliability for many others. 

Broadly, however, most African countries seek to diversify their energy mix, enhance the security of supply and maximise socioeconomic and environmental benefits. 

Therefore, a coordinated approach that exploits the synergies and complementarities across the continent to optimal attainment of climate change mitigation, energy access and broader sustainable development goals, is crucial. For instance, while few countries need and are well suited for accelerated energy transition under JETP-like structures, with many others in need of energy access best served through regional electricity markets, aligning both measures would help exploit the synergies, with gains not only in increasing electricity access and reliability but also greater decarbonisation of the continent’s power grid. DM/MC

George Baffour Awuah is a Research Fellow at the Nelson Mandela School of Public Governance. He is the research lead for the energy transition programme, which is a part of the school’s climate change and sustainable development research stream. George has worked as a researcher with various academic and policy research units in Ghana and South Africa. He also has experience in sustainability consulting as a technical analyst and project coordinator for climate, energy and environmental projects.

This is the first op-ed in a series of opinion pieces written by UCT’s Nelson Mandela School of Public Governance team. The Nelson Mandela School is research driven and aims to build inclusive, developmental entrepreneurial and effective democratic African public institutions. The school partners with government departments, the private sector and civil society to strengthen ethical leadership for social change and sustainable development. Find out more here.