Germany To Ditch Russia For Africa In New Energy Talks

Germany ditches Russian gas and oil and forges mutually beneficially new energy ties with Africa.

The European Union is looking for alternative energy sources as the Russia-Ukraine war continues. The abundance of oil and gas resources in Africa became a hot topic of discussion at the 2022 German-Africa Energy Forum in Hamburg.

Experts claimed that despite Africa’s vast resources, Africa’s energy sector required significant improvements and assistance; especially the lacking seen in infrastructure and investment.

However, according to 2017 reports, the continent was estimated to hold 146 trillion cubic metres of proved gas reserves that year. This accounted for over 7% of the global total reserves.

In 2019, Nigeria positioned itself as Africa’s leading crude oil exporter, with over 2 million barrels of oil exported on the global market each day. In addition, Africa’s combined gas and oil output were 327.3 million metric tons the same year.

By 2020, Africa’s contribution to global oil exports accounted for nearly 9%.

EU Ditching Russia

The June 1–2 Hamburg conference was a chance for key players in the German and African energy industries to collaborate and create win-win alliances.

Germany is seeking to phase out gas and oil from Russia for good. This is in response to the EU’s sixth round of economic sanctions against Russia’s invasion of Ukraine, with Africa’s energy being considered an alternative. These sanctions are meant to limit Russia’s ability to finance the war in Ukraine.

In this partnership, many German enterprises are interested in funding African projects to produce hydrogen energy for export to European nations. Gas is also desired in Africa, where natural gas is seen as a transitional fuel due to its low carbon emissions compared to burning fossil fuels such as oil and coal.

Taking the Gas to Europe

Ndiarka Mbodgi, the Senegalese-French national and founder of the Berlin-based firm that offers energy solutions to Africa, stressed the importance of gas.

He also asserted that the ongoing Ukraine conflict proves how important it is to diversify energy sources. “And if we look at the resource that Africa has in terms of, for example, gas, which is a source of transition, we can see its importance in Africa.” He told DW.

The conference was held following last month’s visit to Africa by German Chancellor Olaf Scholz, in which he signed agreements to help with the infrastructure necessary for oil and gas extraction and export to Europe.

According to Ethiopia’s energy minister, Sultan Wali, development initiatives for renewable energy entail significant financial investment and require public-private partnerships.

“African governments cannot carry out these projects alone. They need financial support from Germany and other rich western countries. This forum will create a strong ground for everyone,” Wali added.

Russia Out of the Picture

According to Ndiarka Mbodji, the chief executive of Kowry Energy, the Ukraine conflict has made diversifying energy sources more urgent than ever before. And Africa holds the power to resolve Europe’s energy crisis, starting with gas, which is just an example of Africa’s energy wealth.

In addition, the European Commission unveiled its intentions to import 10 million tons of renewable hydrogen each year to replace fossil fuels in several sectors and vehicles. And many African countries desire a slice of that cake.

Amani Abou-Zeid, the African Union Commissioner for Energy and Infrastructure, emphasized that to overcome the current security concerns in Europe, the continent must first tackle its energy problem. This means forging strong ties with Africa.

“Europe is not secure until we are all secure,” Amani Abou-Zeid added.

In retrospect, Europe’s concerns are not solely about weapons, but also about its energy and food. According to Abou-Zeid, this is the only way our security can be assured.

The Energy Deficit in Africa

The big question is, can Africa supply Europe’s energy demands?

A Nigerian energy broker claimed that the plan would need a spare capacity of at least 7.4 million barrels daily, which Africa doesn’t have, in an effort to dispute Africa’s ability to meet Europe’s energy demands.

Even though Africa has a lot of potential to provide renewable hydrogen to Europe, many households still use biomass burning as a source of energy. This is because only half of the population has access to renewable energy.

For instance, according to Ethiopia’s energy minister, 95% of Ethiopians consume biomass fuels, which has a direct influence on agricultural land. He went on to express Ethiopia’s efforts to shift towards renewable energy from hydroelectricity generation.

The country is currently relying less on hydropower and incorporating a varied range of energy sources, such as wind power, solar power, and geothermal, among others. Because of this, it’s essential to have a deep discussion about government and private partnerships, Wali added.

Ethiopia has extensive ground and surface water reservoirs that it aims to collaborate with investors to generate hydrogen energy.

Africa’s Investment problem

The African Energy Chamber (AEC), a non-profit organization that promotes collaborations between Germany and Africa, said that to permanently put an end to energy poverty by 2030, Africa will require creative and holistic solutions.

According to the AEC press statement released ahead of Scholz’s last month’s visit, even though Africa has enormous natural gas and hydrogen potential, the regular occurrence of load shedding means that this potential is not being used. Furthermore, unless steps are taken to expand generation capacity, it is anticipated to get worse.

The AEC press statement read: “900 million lack access to clean cooking solutions, largely attributed to lack of adequate investment and energy transition trends.”

However, the situation is somewhat different in South Africa. For instance, the lack of sufficient capital deters small firms intending to contribute to the shift toward renewable energy despite the Cyrill Ramaphosa administration’s establishment of a hydrogen policy.

The Need to Fund Growth

According to Zanele Mavuso, the South African-based executive chairperson of Bambili Energy Group, South Africa’s government needs to do more than just create a solid footing for renewable hydrogen energy. Instead, he added, it is more about ensuring that the country has the funding to allow the sector’s development. It would also be beneficial if the government had access to capital that could help renewable energy projects start and continue over time.

Although Africa contributes little carbon emissions, they are the chief victim of climate change’s consequences. They are also vital participants in global decarbonization at the same time. Hence, observers are interested in learning more about how an African-led energy shift might work and become green-powered production hubs for green energy exportations.