1 How to Respond to Energy Transitions in Africa …
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contribute to not only tackling energy access challenges but also to the
global efforts to transition to a low-carbon economy.
In the next section, the chapter will introduce the concept of ‘energy
progression’, but before that, the key disruptions in the hydrocarbon
sector will briefly be highlighted in the next subsection.
1.2.2 Key Disruptions in the Hydrocarbon Sector
in Developing Countries
Although hydrocarbons are expected to play a significant role in the next
decade, we have to be aware of some of the key disruptions in the development of this sector in developing countries.
27 There indeed common
challenges, including the volatile oil price; however, there are some
disruptions which are unique to developing countries. These include,
among others; lack of necessary infrastructure; corruption and lack of
transparency; unreliable regulatory regime just to mention but a few.
Some of these disruptions are briefly highlighted below:
• LNG and renewables: the rising global demand for LNG and a transition to a low-carbon economy which favours the deployment of
renewables is likely to have long term negative impacts on the hydrocarbon developments in Asia and Africa—since these compete with
the same available investment opportunities like for hydrocarbons.
• Corruption and lack of transparency: Corruption not only makes it
impossible for local people to benefit from their resources, but it also
creates doubt for international energy companies that could consider
other investment opportunities in renewables. Some of the most
resource-rich countries are also ranked the most corrupt, according to
the Transparency International Corruption Perceptions Index (CPI).
For instance, out of the 180 most corrupt countries, oil-rich countries were ranked the most corrupt, including Somalia, South Sudan,
Guine-Bissau, Equatoria Guinea and Angola which ranked 180, 179,
171, 171 and 167, respectively.
27 Africa’s proven oil and gas reserves account for 7.5 and 7.1% of global reserves, respectively.
13
contribute to not only tackling energy access challenges but also to the
global efforts to transition to a low-carbon economy.
In the next section, the chapter will introduce the concept of ‘energy
progression’, but before that, the key disruptions in the hydrocarbon
sector will briefly be highlighted in the next subsection.
1.2.2 Key Disruptions in the Hydrocarbon Sector
in Developing Countries
Although hydrocarbons are expected to play a significant role in the next
decade, we have to be aware of some of the key disruptions in the development of this sector in developing countries.
27 There indeed common
challenges, including the volatile oil price; however, there are some
disruptions which are unique to developing countries. These include,
among others; lack of necessary infrastructure; corruption and lack of
transparency; unreliable regulatory regime just to mention but a few.
Some of these disruptions are briefly highlighted below:
• LNG and renewables: the rising global demand for LNG and a transition to a low-carbon economy which favours the deployment of
renewables is likely to have long term negative impacts on the hydrocarbon developments in Asia and Africa—since these compete with
the same available investment opportunities like for hydrocarbons.
• Corruption and lack of transparency: Corruption not only makes it
impossible for local people to benefit from their resources, but it also
creates doubt for international energy companies that could consider
other investment opportunities in renewables. Some of the most
resource-rich countries are also ranked the most corrupt, according to
the Transparency International Corruption Perceptions Index (CPI).
For instance, out of the 180 most corrupt countries, oil-rich countries were ranked the most corrupt, including Somalia, South Sudan,
Guine-Bissau, Equatoria Guinea and Angola which ranked 180, 179,
171, 171 and 167, respectively.
27 Africa’s proven oil and gas reserves account for 7.5 and 7.1% of global reserves, respectively.