American U-turn on coal welcome news for Africa

American U-turn on coal welcome news for Africa

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THE recent announcement by the US Treasury that it would like to see Multilateral Development Banks (MDBs) such as the World Bank have a re-think on their opposition to the use of fossil fuels, especially coal, and help countries to access these fuels more cleanly and efficiently, should be welcome news for African countries that are sitting on 50 million tons of coal reserves.

US President Donald Trump had signalled his administration’s coal U-turn at the Munich G20 last month amid opposition from climate change activists who argue that emissions from fossil fuels are damaging the environment. Under President Barack Obama, US policy was to reduce dependency on coal for energy and as such when he launched his Power Initiative for Africa in 2013, he clearly said that his administration would not back the use of coal abroad for electricity generation unless there were carbon emission controls.

This did not go down well with African countries with an abundance of coal reserves, more so on a continent where over 600 million people do not have access to electricity. They argue that they should be allowed to use coal to speed up their development just a Europe and North America had used coal to industrialise.

They also pointed out that with current technology, coal production was even cleaner than producing gas. The Paris Agreement on climate change, which came into effect last year, calls for countries to act to achieve low emissions targets. Ghana, South Africa and Nigeria – countries with huge coal reserves – have included low emission coal technology in their Intended Nationally Determined Contributions (INDCs), which are the foundation of the Paris Agreement.

Organisations that focus on improving power in Africa have welcomed the US Treasury’s announcement. ‘As a matter of urgency, countries need to look at alternative ways of accessing and using cleaner fossil fuels as well as renewable energy for its economic development,’ said Naeema Ahmed, founder and director of Africa Alternative Energy Initiative based in London ‘This will help resolve issues of climate change and industrialised carbon emissions. As an organisation, the AAEI has been strongly advocating and promoting cleaner and affordable energy through distributed generation,’ she added.

The African Development Bank (AfDB) is also in favour of using fossil fuels on the continent, especially coal. For an MDB, which approved $1.7bn last year for power projects ranging from policy-based operations to power generation, public sector transmission and distribution projects in Africa, this will be a boost to its power programme. It would now be easier for the institution to drive the continent’s coal programme forward, given that the US is a member of the AfDB with the second largest voting power after Nigeria.

Speaking last month during the launch of the Japan-Africa Energy Initiative in Addis Ababa, the President of the AfDB, Akinwumi Adesina, said that many African leaders had shown ‘keen interest in accessing Japan’s world-renowned energy technologies, including its ultra-supercritical clean coal technologies.

‘Japan has answered our call to make it easier for African governments to adopt a balanced energy mix of all available energy sources and technologies, including the best low-emitting clean coal technologies, where they form part of a least-cost sector development plan,’ he added.

Adesina wants Western countries to recognise that the continent needs to take a pragmatic approach to energy access. ‘Africa must develop its energy sector with what it has,’ he said. ‘Endowed with many different energy sources – both renewable and conventional – Africa needs a balanced energy mix. This must include renewable and conventional sources of power for lighting and heating homes, for cooking, for schools and hospitals, and for powering offices, manufacturing plants and factories.’

He added: ‘Africa loses up to four per cent of its annual gross domestic product from energy bottlenecks and inefficiencies, while 645 million people in Africa have no access to electricity; 137 years after the invention of the light bulb.’

The continent has the lowest electrification rate in the world, with power consumption per capita there at the lowest, estimated at 613 kWh per annum, compared to 6,500 kWh in Europe and 13,000 kWh in the US.
The former UN Secretary General, Kofi Annan, who is Chairman of the Africa Progress Panel, has also come out in favour of using fossil fuels to bridge Africa’s huge energy gap. ‘What we are advocating is that African governments harness every available energy option, in as cost-effective and technologically efficient manner as possible, so that no one is left behind,’ he said.

‘Each country needs to decide on the most cost-effective, technologically efficient energy mix that works best for its own needs. Governments and their partners need to seize the opportunity to re-imagine their energy futures. Africa’s energy deficit continues to stifle economic growth, job creation, agricultural transformation, and improvements in health and education,’ Annan added.

Despite opposition to the use of coal by climate change activists, technological advances are making coal production a lot cleaner and efficient. For instance, carbon capture, use and storage (CCUS) is an integrated suite of technologies that can capture up to 90 per cent of the CO2 emissions produced from the use of fossil fuels in electricity generation and industrial processes, preventing the CO2 from entering the atmosphere.

With this in mind, African countries have been arguing strongly in favour of using coal to power the continent. Last October, Nigerian finance minister, Kemi Adeosun, told a joint IMF and World Bank meeting: ‘We in Nigeria have coal but we have power problem, yet we’ve been blocked because it is not green. There is some hypocrisy because we have the entire Western industrialisation built on coal energy. That is the competitive advantage that they have been using [and]now that Africa wants to use coal they deny us.’

In May 2016, Nigerian Vice President Yemi Osinbajo said: ‘We think that we must use our fossil fuel to the maximum; we must use our coal to the maximum; and we simply call on the support of the developed nations that are aggressive about reducing emissions, especially in coal power plants, to give us the technology that is required because, obviously, there is available technology to make coal clean and we simply call upon them to give us that technology.’
According to the International Energy Agency’s New Policies Scenario, demand for coal in Nigeria will increase from 1Mtoe in 2020 to 12Mtoe in 2040.

In Tanzania, where the Mbeya Coal to Power Project will increase the country’s electricity generation capacity by around 25 per cent, the minister for minerals and energy, Sospeter Muhongo, said last year: ‘We will start intensifying the utilisation of coal…Why shouldn’t we use coal when there are other countries where their CO2 per capita is so high?’

For now, though, Africa’s coal producing countries must undertake more lobbying of influential members at MDBs such as the World Bank to change policies that are holding up serious coal production on the continent. Experts believe that it will take between 18 months and two years before he policy changes are achieved.

‘…for the Paris Agreement to be successful, we need to support these countries, most of which are developing and emerging economies, to shift their coal fired electricity to more efficient technologies so they can meet their climate commitments,’ said Benjamin Sporton, CEO at the World Coal Association (WCA) in London.

In the meantime, countries such as Ghana are positioning themselves for when the change comes. As part of its energy mix programme, a Chinese company, in collaboration with the Volta River Authority, is developing 2×350MW supercritical coal-fired generating units, including affiliated coal handling terminal at Ekumfi. The project is to be further expanded either by a 4×350MW or 2×600MW supercritical coal-fired generating units. It is intended to contribute considerably to addressing the domestic power generation shortfall and improving Ghana’s future power balance.

In South Africa, the coal industry has been providing low-cost coal-fired electricity for energy intensive mining and heavy industry. The government is planning to reduce greenhouse gas emissions by 42 per cent by 2025 while the Department of Energy aims to achieve 30 per cent of clean energy at the same time.
It would therefore make sense, in the drive toward creating jobs in Africa, for coal-fired stations to provide power for big businesses and major industries while solar power could be used to provide domestic electricity as part of the energy mix on the continent.

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