AME to lead on hydrogen, but behind on EVs
Africa and the Middle East (AME) are well positioned to become major suppliers of green hydrogen and other sustainable energy sources to the world. What the region needs to get there is regulations, investment and innovation, says Roland Berger. Meanwhile, GM and British think tank Oxford Business Group (OBG) have recently released a report stating the need to accelerate electric mobility in Africa – and listing the challenges to be overcome.
Global consultancy Roland Berger presented those findings at the second Middle East and Africa Energy Week, hosted by Siemens Energy. Based on a survey of the prominent political, business and society figures attending the event, Roland Berger concluded that AME scores 26% in the Energy Transition Readiness Index (ETRI).
While that is not a lot, there are certain areas of the sustainable energy paradigm in which the region excels. One of these is green hydrogen, with 46 projects already underway across the region – the main countries being Oman (11 projects), the UAE (9) and Egypt (7).
Why green hydrogen? Because it’s a good fit with the region’s capabilities for renewable energy, both in terms of export infrastructure and financing resources. Also, hydrogen could be key to decarbonize a region whose economies largely remain reliant on fossil fuels – especially so in the Middle East.
As far as Africa is concerned, it faces a critical ‘trilemma’ in terms of renewable energy: the need to balance affordability, reliability and sustainability. While reliability may be the most critical factor overall, the situation across Africa’s many countries is so diverse that solutions will have to be tailored to individual markets.
However, says, Roland Berger, the energy transition is a unique opportunity to drive broad socio-economic development, right across Africa, in tune with the possibilities of each country.
In terms of CO2 reduction, AME suffers from a perception gap. The attendees to the event estimated that the region’s emissions had fallen by 23% between 2005 and 2021. In fact, they have risen by around 50%. The drivers in the Middle East are heavy reliance on hydrocarbons, and ever higher standards of living.
- In Africa, the increase was due mainly to population growth, poor infrastructure, and a lack of financing opportunities for sustainable solutions. Overall, however the region’s carbon footprint is limited.
- The Middle East only contributes 7% of global CO2, while that number for Africa is just 3%.
Despite its relatively small footprint, the AME region suffers disproportionately from climate change, mainly in the form of massive heatwaves and violent weather events. The conference pointed out there are three key areas where action is required: policy, funding and innovation.
Among the priorities to be taken to accelerate the transition in AME are:
- An accelerated phase-out of coal as a source of power and heat generation.
- Linked to this, an accelerated introduction of renewables. To achieve this, barriers in technology, society and bureaucracy must be lifted.
- The energy grids must be digitized, to ensure a steady supply from more intermittent sources of renewable energy.
- Projects must be set up for both capture and storage of carbon, and storage of energy.
- The energy transition must be seen as socially fair and just in order to be accepted. Affordability for all is key.
Carbon-neutral by 2040
In a recent paper titled ‘Preparing for the Green Automotive Transition in Africa and the Middle East’, GM and OBG explore the role EVs could play in decarbonizing Africa’s markets.
For its part, GM says it will reduce CO2 emissions in the UAE by more than 24,000 m3 before 2035, and to go carbon-neutral globally – but especially in Africa – by 2040.
As the report states, decarbonization is already well underway in certain African markets, especially Kenya – thanks in part to the success of local electric bus assembly company BasiGo. Electric motorbikes are another popular mode of transport, especially in the big cities of Africa’s middle and east. Recently, the IMF funded Gozem, a mobility startup in West Africa, to the tune of $10 million – again going to the deployment of electric motorbikes, this time in Togo and Benin.
Motorcycles are a popular means of transport in Kampala (pictured), and other major cities across Africa. (Credit: Shutterstock)