Electricity demand in Africa is expected to grow from 2021 onwards by three percent year-on-year as economies recover across the continent, a report by the International Energy Agency (IEA) has predicted.
GDP is forecast to rebound in 2021, although it will remain below 2019 levels in several countries including South Africa, which accounted for almost 30 percent of electricity demand on the continent in 2020.
Recovery and growth in both the industrial and residential sectors are expected to boost demand.
In South Africa, electricity demand is forecast to remain below 2019 levels to 2022 on account of suppressed demand as certain sectors struggle to operate in the current climate of electricity shortages.
“These shortages are expected to continue until new generation comes online in 2022 at the earliest and more likely in 2023, under the recently concluded Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP),” the IEA said.
Of the other large economies, Egypt, which accounted for 22 percent of Africa’s demand in 2019, was the least affected by Covid-19, with economic growth of 3.6 percent in 2020.
Electricity demand in the North African country fell by about one percent. However, IEA noted that although Egypt’s economy is slightly slowing in 2021, it expects electricity to catch up with 2019 levels and grow by three percent as economic activity increases significantly in 2022.
Electricity demand in Algeria, which accounted for 10 percent of Africa’s demand in 2019, fell in 2020 for the first time since 2009 by three percent.
The decline coincides with a severe contraction of the economy due to the crash in global oil prices.
Given the expected economic recovery and strong growth rates in recent years, “we expected a return to electricity demand growth in 2021 and 2022 by close to seven percent annually on average,” it said.
Morocco’s economy contracted by seven percent in 2020, pushing demand down in 2020 by 1.4 percent year-on-year relative to 2019. Similarly, peak demand fell by 1.5 percent in 2020 relative to 2019.
During the height of lockdown during April 2020, the peak fell by as much as 12 percent relative to the same period in 2019.
“We expect electricity demand in 2021 to slightly exceed 2019 demand due to a strong economic recovery and continue solid growth in 2022 thanks to the industrial, residential and commercial sectors. While North Africa is already close to universal electricity access, at more than 99 percent, as of 2019 only 42 percent of the population in sub-Saharan Africa had access to electricity.”
In the coming years, electrification can be a key way to boost growth in the continent’s residential sector, which accounts for almost 30 percent of electricity demand.
This, however, will require generation capacity shortages and electricity affordability to be addressed.