Opportunities for Gas in Sub-Saharan Africa [GGP]
In his December 2017 paper entitled “Challenges to the Future of Gas: unburnable or unaffordable?”, Jonathan Stern noted that “For the period up to 2030, the principal threats to the future of gas (outside North America) will be affordability and competitiveness. Beyond that date – and particularly beyond 2040 – carbon (and potentially also methane) emissions from gas will cause it to become progressively ‘unburnable’ if COP21 targets are to be met.”
Stern noted further that in the period to 2030 and beyond, for gas to fulfil its potential role as a transition fuel, then it has to be delivered to high-income national markets below $8/MMbtu and to low-income markets below $6/MMbtu, and that “the major challenge to the future of gas will be to ensure that it does not become (and in many low-income countries remain) unaffordable and/or uncompetitive, long before its emissions make it unburnable”.
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In many low-income countries, especially in Asia, gas is often competing with coal in the power generation market, and to have any chance of competing, then gas has to be priced very competitively. There are examples, such as China, where a combination of policies related to improving air quality and mandated closure of some older plant have allowed the expansion of gas in the power, industry and heat sectors. In the UK, a high carbon support price has boosted gas-fired generation, aided by the closure of a large proportion of coal-fired capacity. However, as Stern notes, “these are isolated examples and, despite repeated arguments from the gas community, there is no clear indication from the Nationally Determined Contributions submitted post-COP21 that substantial numbers of countries intend to use gas on a large scale to solve either air quality or carbon reduction problems”.However, there are countries around the world where there is little or no coal-fired power generation and the principal means of generating electricity is often oil and hydro. Many of these countries are in Sub-Saharan Africa. The OIES Gas Programme has already published a short paper, by Mike Fulwood and Thierry Bros, covering the Future Prospects for LNG in Ghana, although this concluded that LNG into Ghana may be some way off. There was also a short piece on the Ivory Coast, where there is existing gas demand, by Thierry Bros in the Oxford Energy Forum, published in August 2017.
This paper takes a wider look at Sub-Saharan Africa as a whole to assess the opportunities for gas in the power generation sector. The paper is structured in 4 sections: the first section describes power generation by fuel type in Sub-Saharan Africa. This is followed by a section considering the prospects for gas demand in power, whether using indigenous gas resources or imports by pipeline and/or LNG. A third section discusses the issues and challenges the region faces in developing gas demand. The final section brings together the analysis and seeks to identify the most promising candidates for gas demand growth.
DOWNLOAD Opportunities for Gas in Sub-Saharan Africa, by Mike Fulwood, Senior Research Fellow, Oxford Institute for Energy Studies (OIES)
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