Addis Ababa, November 5, 2023 (FBC) – Africa’s geothermal sector will attract at least $35 billion in investments by 2050, showing the critical role geothermal is set to play in meeting the continent’s rapidly growing energy demand, Oil Price.com reported citing Rystad Energy’s latest projections.
According to Rystad Energy projection, this significant investment will see Africa’s installed geothermal capacity surpass Europe by the end of the decade.
By 2050, Rystad Energy’s study stated that it expects geothermal power generation capacity in Africa to expand to 13 GW, more than double the expected 5.5 GW of installed capacity in Europe.
Ethiopia and Kenya will lead the growth of Africa’s geothermal sector, accounting for close to 90% of total capacity, according to the projection. This is due to their rich geothermal resources and the need to diversify Ethiopia’s power mix. The power supply in the two countries is expected to increase six-fold from 2023 to 2050, rising from 34 terawatt-hours (TWh) to 222 TWh. Rystad Energy projects that geothermal supply from the pair will rise well above 10 GW by 2050, potentially reaching as high as 12 GW.
The geothermal industry in Africa is picking up steam and could help meet soaring demand across the continent in the decades to come, it was stated.
Analyzing already announced projects signals significant growth on the horizon, but developments that we project to come online given economics and demand really highlight the rapid build out, Rystad Energy said. This growth will take the continent from being the sixth largest geothermal power generator in 2023 to the third largest in 2030.
Nowadays, international players are increasingly looking to the East African Rift for growth opportunities as geothermal energy provides a stable energy source that complements intermittent sources like wind and solar. Rystad Energy forecasts that investments in Africa’s geothermal sector will reach at least $35 billion from 2024 to 2050, driven by rapidly growing energy demand in East Africa.
International expertise and technical assistance have helped contribute to the growth of East Africa’s geothermal sector, in turn fostering the development of domestic expertise. Kenyan companies such as the Geothermal Development Company (GDC) and Kenya Electricity Generating Company (KenGen) are playing key roles in helping neighboring countries establish their geothermal industry.
Many African countries with geothermal potential rely heavily on hydropower for their electricity supply. Ethiopia, for instance, currently sources 88% of its electricity from hydro. However, this dependency places these countries at risk to external weather conditions such as droughts. By incorporating more geothermal energy into their power mix, African nations can help reduce their dependency on hydropower and mitigate these risks. While Kenya has limited potential for large-scale hydropower projects, estimated at around 1-1.5 GW, Ethiopia has significant potential for hydropower generation. Its controversial Grand Renaissance Dam on the Nile, for example, has a capacity of more than 5 GW.
To achieve a 13 GW geothermal capacity in Africa by 2050, Rystad Energy’s base case scenario relies heavily on the development of geothermal resources in Ethiopia and Kenya.