Africa, with its wealth of natural resources and fast-growing population, may have a significant impact on international energy markets over the next 25 years. The International Energy Outlook 2018 (IEO2018) analyzed uncertainty associated with future energy demand growth in Africa by examining a sensitivity case in which a faster rate of economic growth in Africa—compared with the IEO2018 Reference case—results in greater energy consumption and a larger manufacturing sector through 2040.
The IEO2018 Reference case projects that real African gross domestic product (GDP) will grow at an average rate of 3.8% per year from 2015 to 2040, and the IEO2018 Africa High Growth case projects an average growth rate of 5.0% per year over the same period. In these cases, Africa’s energy consumption is projected to grow from 23 quadrillion British thermal units (Btu) in 2015 to 35 quadrillion Btu in the IEO2018 Reference case and to 44 quadrillion Btu in the Africa High Growth case. Energy consumed in the industrial sector (manufacturing, construction, mining, and agriculture) accounts for most of the difference between cases.
Within the industrial sector, non energy-intensive manufacturing—pharmaceuticals and electrical equipment, for example—sees the largest increase in energy consumption. Energy consumption for non energy-intensive manufacturing in 2040 is 7.9 quadrillion Btu in the IEO2018 Reference case and 10.9 quadrillion Btu in the Africa High Growth case. The energy-intensive manufacturing sector’s energy consumption increases by 1.0 quadrillion Btu, and non manufacturing energy consumption increases by 0.5 quadrillion Btu.
A higher rate of GDP growth in the Africa High Growth case leads to African manufacturing growing as a share of the economy and the services share shrinking relative to the IEO2018 Reference case. The manufacturing sector accounts for 19% of total output in the IEO2018 Reference case in 2040, with services accounting for 47%. In the IEO2018 Africa High Growth case, however, the manufacturing share of Africa’s economy in 2040 rises to 24%, and the services share drops to 37%.
Even though GDP and energy consumption both grow in Africa in the IEO2018 Reference case, energy consumption per capita declines between 2015 and 2040. Africa’s population growth rate is higher than its energy consumption growth rate, underscoring the difficulties the continent will have in meeting its energy needs. In the Africa High Growth case, however, energy consumption rises from 19 million Btu per person to 22 million Btu per person between 2015 and 2040, compared with a decline to 17 million Btu per person in the IEO2018 Reference case over that period.
Although energy consumption per capita in 2040 in the Africa High Growth case is 25% higher than it is in the IEO2018 Reference case,the African value is still lower than in many countries. African energy consumption per capita in 2040 is projected to be one-half of the level in India, one-fourth of the level in Brazil, and one-tenth of the level in Russia in the IEO2018 Africa High Growth case.
The net effect of the Africa High Growth case on the rest of the world, because of trade and global supply chains, shows limited impacts on other countries—either positive or negative—in terms of output. The biggest effect is on non energy-intensive manufacturing in Eurasian countries, where output is 3% lower in the Africa High Growth case. This slight drop occurs because Africa’s availability of low cost labor gives it a competitive advantage in manufacturing.
Principal contributors: Vipin Arora, Ilan Gmach, George Pantazopoulos
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Pioneering technology expert tells ADIPEC Energy Dialogue up to 80 per cent of plant shutdowns could be mitigated through combination of advanced electrification, automation and digitalisation technologies
Greater use of renewables in power management processes offers oil and gas companies opportunities to create efficiencies, sustainability and affordability when modernising equipment, or planning new CAPEX projects
Abu Dhabi, UAE – XX August 2020 – Leveraging the synergies created by the convergence of electrification, automation and digitalisation, can create significant cost savings for oil and gas companies when making both operational and capital investment decisions, according to Dr Peter Terwiesch, President of Industrial Automation at ABB, a Swiss-Swedish multinational company, operating mainly in robotics, power, heavy electrical equipment, and automation technology areas.
Participating in the latest ADIPEC Energy Dialogue, Dr Terwiesch said up to 80 per cent of energy industry plant shutdowns, caused by human error, or rotating machinery or power outages, could be mitigated through a combination of electrification, automation and digitalisation.
“Savings are clearly possible not only on the operation side but also, using the same synergies between dimensions, you can bring down the cost schedule and risk of capital investment, especially in a time when making projects work economically is harder,” explained Dr Terwiesch.
A pioneering technology leader, who works closely with utility, industry, transportation and infrastructure customers, Dr Terwiesch said despite the increasing investment by oil and gas companies in renewables and the growing use of renewables to generate electricity, both for individual and industrial uses, hydrocarbons will continue to have an important role in creating energy, in the short to medium term.
“If you look at the energy density constraints, clearly electricity is gaining share but electricity is not the source of energy; it is a conduit of energy. The energy has to come from somewhere and that can be hydrocarbons, or nuclear, or renewables.” he said.
Nevertheless, he added, the greater use of renewables to generate electricity offers oil and gas companies the option of integrating a higher share of renewables into power management processes to create efficiencies, sustainability and affordability when modernising equipment, or planning new CAPEX projects.
The ADIPEC Energy Dialogue is a series of online thought leadership events created by dmg events, organisers of the annual Abu Dhabi International Exhibition and Conference. Featuring key stakeholders and decision-makers in the oil and gas industry, the dialogues focus on how the industry is evolving and transforming in response to the rapidly changing energy market.
With this year’s in person ADIPEC exhibition and conference postponed to November 2021, the ADIPEC Energy Dialogue, along with insightful webinars, podcasts and on line panels continue to connect the oil and gas industry, with the challenges and opportunities shaping energy markets in the run up to, and following, a planned three-day live stream virtual ADIPEC conference taking place from November 9-11.
An industry first of its kind, the online conference will bring together energy leaders, ministers and global oil and gas CEOs to assess the collective measures the industry needs to put in place to fast-track recovery, post COVID-19.
To watch the full ADIPEC Energy Dialogue series go to: https://www.youtube.com/watch?v=QZzUd32n3_s&t=6s
Utility-scale battery storage systems are increasingly being installed in the United States. In 2010, the United States had seven operational battery storage systems, which accounted for 59 megawatts (MW) of power capacity (the maximum amount of power output a battery can provide in any instant) and 21 megawatthours (MWh) of energy capacity (the total amount of energy that can be stored or discharged by a battery). By the end of 2018, the United States had 125 operational battery storage systems, providing a total of 869 MW of installed power capacity and 1,236 MWh of energy capacity.
Battery storage systems store electricity produced by generators or pulled directly from the electrical grid, and they redistribute the power later as needed. These systems have a wide variety of applications, including integrating renewables into the grid, peak shaving, frequency regulation, and providing backup power.
Most utility-scale battery storage capacity is installed in regions covered by independent system operators (ISOs) or regional transmission organizations (RTOs). Historically, most battery systems are in the PJM Interconnection (PJM), which manages the power grid in 13 eastern and Midwestern states as well as the District of Columbia, and in the California Independent System Operator (CAISO). Together, PJM and CAISO accounted for 55% of the total battery storage power capacity built between 2010 and 2018. However, in 2018, more than 58% (130 MW) of new storage power capacity additions, representing 69% (337 MWh) of energy capacity additions, were installed in states outside of those areas.
In 2018, many regions outside of CAISO and PJM began adding greater amounts of battery storage capacity to their power grids, including Alaska and Hawaii, the Electric Reliability Council of Texas (ERCOT), and the Midcontinent Independent System Operator (MISO). Many of the additions were the result of procurement requirements, financial incentives, and long-term planning mechanisms that promote the use of energy storage in the respective states. Alaska and Hawaii, which have isolated power grids, are expanding battery storage capacity to increase grid reliability and reduce dependence on expensive fossil fuel imports.
Source: U.S. Energy Information Administration, Form EIA-860, Annual Electric Generator Report
Note: The cost range represents cost data elements from the 25th to 75th percentiles for each year of reported cost data.
Average costs per unit of energy capacity decreased 61% between 2015 and 2017, dropping from $2,153 per kilowatthour (kWh) to $834 per kWh. The large decrease in cost makes battery storage more economical, helping accelerate capacity growth. Affordable battery storage also plays an important role in the continued integration of storage with intermittent renewable electricity sources such as wind and solar.
Additional information on these topics is available in the U.S. Energy Information Administration’s (EIA) recently updated Battery Storage in the United States: An Update on Market Trends. This report explores trends in battery storage capacity additions and describes the current state of the market, including information on applications, cost, market and policy drivers, and future project developments.