The Africa of renewable energy

Africa is growing and so is its need for energy. According to the UN, more than half of the world’s population growth between now and 2050 is expected to occur in Africa. This, along with the continent’s rapid industrialisation, represents an unparalleled opportunity for the expansion of climate-friendly renewable energy solutions.

With a presence in Africa since 1954, Eni understands that a the right energy mix will enable African nations to develop both quickly and sustainably. According to the International Renewable Energy Agency, Africa could meet nearly a quarter of its energy needs through the use of indigenous, clean, renewable energy by 2030.

On a continent already feeling the effects of climate change, developing renewable energy resources takes on an even greater importance, and for Eni the prime objective is to achieve complete carbon neutrality by 2050. To this extent, the company’s mission has aligned to the United Nations’ Sustainable Development Goals (SDGs), including goal n. 7, which is to “ensure access to affordable, reliable, sustainable and modern energy for all,” and Goal 13 to “take urgent action to combat climate change and its impacts”. Eni also supports initiatives like that of SolarPower Europe Emerging Markets Workstream, which promotes solar energy and the benefits that this brings to emerging markets like those in Africa.

Mr. Stefano Mantellassi shared insights into Eni's Renewable Energy Projects in Africa. In addition to his role at Eni, he also serves as the Chair of the Emerging Markets Workstream within SolarPower Europe (SPE), the association representing over 200 members active along the whole solar value chain.

Q: Why does Eni invest in renewable energy projects in Africa?

Mantellassi: Africa is where we took our first steps outside of Italy in 1954, and we have a long history of working with the governments and people on the continent. As the world moved toward decarbonization and renewable energy, Africa was a natural target for us. There are of course many challenges facing Africa's energy supply and we knew that new renewable projects would be an ideal way to solve these.

Our long-standing presence here provided us with an understanding of the local energy markets and the steps needed to accelerate and support Africa's renewable energy development. We follow what we call a dual flagship model, so that we do not impose our way of doing things, our business, or our priorities, and instead work together with the countries on the ground to fully understand their needs.

Q: How does the SPE Emerging Market Workstream help growing economies develop renewable energy?

Mantellassi: The focus of SolarPower Europe has historically been in Europe. However, our members recently expressed an interest in widening the association’s geographical scope. Eni, an active board member of SolarPower Europe, proposed the creation of this workstream, targeting emerging markets with the dual intent of supporting the fast-paced development of renewable energy in those countries, while also creating marketing and commercial opportunities. Several activities have been put in place by the workstream to help encourage members’ understanding and connection to the selected countries, including the publication of market reports analysing the status of the solar industry, and identifying the steps needed to foster growth there.

There pace of development in the renewable energy sector varies across the continent. In more robust economies, key success factors like developed electrical infrastructure, a dedicated regulatory framework and relatively stable financial conditions already exist. But in some African countries, one or more of these factors may not be present and additional efforts are still required to support the renewable energy industry.

The Emerging Market Workstream also supports the creation and development of local associations and workshops aimed at establishing the necessary connections between key players, including the business sector and policy-makers, who are instrumental to the solar industry’s growth.

Q: How does the EU's External Investment Plan help renewable energy development in Africa?

Mantellassi: The External Investment Plan is a program promoted by the European Union to support sustainable development in Africa with a strong focus on the green transition via an innovative guarantee-based system. It serves also as a financial tool to address bankability issues.

State-owned utility companies are often the single buyer of the energy produced by renewable energy plants and often they face their own financial challenges given their obligation to distribute electricity at subsidized prices. The guarantees provided by the EIP help independent power producers (IPPs) by partially covering the risk of non-payment from the buyers. The EIP provides financial security to sustain renewable energy projects' development by creating a framework for private European companies to invest in Africa.

This program has helped change the relationship between African countries and the European Union, moving from an aid model to one of equals who can carry out exchanges on a commercial basis.

Q: Can you share some insights about the Tataouine Photovoltaic Project?

Mantellassi: The Tataouine Photovoltaic plant is built through a Public-Private Partnership project. SEREE (Société Energie Renouvelables Eni ETAP) is a joint venture between Eni and Enterprise Tunisienne d'Activites Petrolieres (ETAP), the state-owned oil and gas company, created to jointly develop renewable energy projects.

It is the first renewable energy project in Tunisia to be developed by an independent power producer as a result of the public tender launched in 2017. This project has also helped create a local skilled workforce in the renewable energy industry.

Q: What are Eni's future plans for Africa in the renewable energy sector?

Mantellassi: We would like to further expand our renewable energy expertise into countries where we are already present, like Tunisia and Algeria. Tunisia has massive potential with large desert areas, high solar radiation and the planned energy interconnection project between Europe (Sicily) and Tunisia, called ELMED. Furthermore, these countries also have the potential to become large producers of green hydrogen, which could be transported to Europe via the existing pipelines.

In Algeria, other than the development of projects like the BRN off-grid photovoltaic plant, we will consider participating in the auctions for the development of 4 GW solar PV plants that the Government recently announced.

Apart from these, we are looking at expanding renewable energy projects into Egypt, Morocco and South Africa, all of which have a huge potential. We are also considering expanding our portfolio in Mozambique, where we are active in the LNG sector. In Angola, we have a joint venture called Solenova Limited, with a 50% partnership between Eni and Sonangol, the national oil and gas company, that is developing a solar PV project in the southern part of the country.

Q: Has the pandemic affected the development and growth of renewable energy?

Mantellassi: The pandemic has resulted in a decrease in energy demand, which has highlighted the fact that renewable energy has virtually zero marginal costs when demand changes. This, coupled with its environmental benefits and the ambitious targets set for CO₂ reduction in countries around the world, has resulted in renewable energy taking centre stage in the European recovery plan.

Q: What other factors can help with renewable energy growth in Africa?

Mantellassi: The success of this industry depends on a variety of factors. Well-developed and reliable transmission networks play a vital role in fostering renewable energy development. This would help create connections between countries, increasing the stability of the grid that’s necessary to cope with the intermittency and variability of renewable energy sources.

Local associations, hence, working at regional level, can help build the cultural framework required to create awareness of renewable energy opportunities. They can become a platform to support the development of a specific regulatory framework. This will encourage international institutions –the World Bank, the African Development Bank, the European Union and the European Investment Bank– to invest in supporting the development of renewable energy projects through dedicated instruments like technical assistance or financial support programmes. These can also help support local industries and boost the local economy.

Q: How can renewable energy create sustainable access to energy for all?

Mantellassi: The number of people gaining access to electricity doubled from 9 million a year between 2000 and 2013 to 20 million people between 2014 and 2019, outpacing population growth. This is partly due to efforts by several technical and financial development initiatives, promoted and sponsored by organisations like the European Union, Eni and SolarPower Europe. While these numbers show progress, it is essential to remind ourselves that less than a decade remains to achieve the United Nation’s Sustainable Development Goals. Renewable energy is an essential tool to improve energy access and solve the climate crisis. Creating awareness, supporting legislation and upgrading infrastructure can help promote renewable energy growth in Africa.