Centre for Sustainable Structural Transformation, Department of Economics & College of Development, Economics and Finance

Energy transition


Making green transition real in Africa: growth potential and business models.

Climate change is the most pressing grand challenge of the twenty-first century. The global imperative is to develop and scale up alternative energy systems for effectively cutting carbon emission and to make resource use more sustainable. 

Energy generation alone is responsible for more than one third of global CO2 emissions. The dramatic decline in the cost of electricity from digitally-enabled renewables – solar photovoltaics and wind (on-shore in particular) – has offered a viable pathway for accelerating energy transition. Furthermore, green hydrogen is becoming a feasible option to replace fossil fuels, especially in (a) highly energy-intensive industries where cutting carbon emission is very difficult, such as steel, metal foundries, chemicals, and plastics and (b) industrial logistics, including storage and heavy transport of goods.

African countries contribute less than 3% to global CO2 emissions, but they are disproportionally affected by climate change and their carbon-intensive energy systems have become increasingly unsustainable, especially in major economies, likeSouth Africa and Nigeria. African countries do not provide reliable and affordable electricity for industrial development; their electricity industries are a drain on public finance; and they have negative impact on climate change and local community well-being. Therefore, for Africa in particular, energy transition is not simply a climate change issue, it is the key to unlock the potential for inclusive and sustainable structural transformation. 

This research stream approaches the issue of energy transition in Africa from a perspective in which energy and industry are fully integrated and looks for feasible opportunities to realise green industrialisation in Africa. Key focuses of this research stream are the opportunities offered by Green Hydrogen and the analysis of the growth potential for energy business in Africa.

The feasibility of sustainable structural transformation depends on long-term-oriented government-business cooperation, especially in major energy projects. The Centre’s research will identify two main groups of countries in Africa and offer different strategies: (a) countries like South Africa, where green hydrogen can be used for linking upstream industries (e.g., mining) with downstream industries (e.g., chemicals, automobile); and (b) countries like Namibia, where the green hydrogen industry has high potential but runs the risk of developing into an enclave.

Picture: Matt Artz via Unsplash.