China dominates African energy market, invests in major power projects

Electrifying Africa is going to be one of the biggest challenges (and opportunities) of the clean energy era. In order to build a carbon-free economy, Africa has to “leapfrog” over what is normally the next phase of development in a nation’s economic journey. At present, 600 million people across the African continent still lack access to energy. But instead of looking to cheap and abundant fossil fuel sources to kick-start economic development as other nations have historically done, African leaders are facing the necessary and virtually unprecedented step of skipping straight to cutting-edge green technologies.

It’s not going to be easy. Africa faces a challenging energy trilemma, as demand for energy grows, they must ensure that energy supplies are 1) sufficient, 2) affordable, and 3) sustainable. This is going to be difficult as the continent’s population continues to boom, and meeting demand through any kind of energy production – clean or otherwise will prove to be a challenge.
The good news is that the African continent has enormous renewable energy potential. The continent’s richness of resources for solar, wind, hydropower, and geothermal, as well as its enormous and growing demand make it prime real estate for investors looking to get in on the ground floor of what is certain to be a major and fast-growing emerging market. Already, foreign investors are flooding into African energy sectors trying to establish influence in these early days of what could be a very lucrative industry.
China and Russia have been facing off for dominance of the African nuclear power industry for years, and the European Union has recently started pushing into North African markets in search of sufficient space and sun to meet their own solar power needs. Now the United States is trying to get a foothold in African energy as well, but it might already be too late.
According to a recent report from Nikkei Asia, China already holds the upper hand in what is developing to be a battle with the United States for Africa’s energy. Chinese companies are already heavily involved in the funding and construction of major power projects around Africa including the Mambila Hydropower in Nigeria and the Grand Ethiopian Renaissance Dam in Ethiopia.

China’s growing energy influence on the global stage should come as no surprise. Beijing’s assertive Belt and Road Initiative, which involves Chinese investment in around 70 countries and international organizations, has been public knowledge since it began in 2013. Since then, China has made huge and entirely predictable inroads into global power markets. Any threat to the United States’ agenda could have easily been foreseen and forestalled.
China’s growing presence may be problematic for Africans as well. “These include concerns about debt sustainability, environmental impact, and the potential for Beijing to use its energy investments as leverage for political gain,” reports Nikkei. Of course, some of these concerns would be the same were the United States to be at the helm in place of China. International developers stress that African countries must be in control of their own development lest they be exploited for their abundant energy resources. Indeed, there is valid concern that internationally developed energy projects will direct that energy to their own markets rather than into the African grids that so desperately need it.

Source: Oilprice.com

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