Energy Transition in Angola

Image credit: Unsplash / Kuiza Dizaya

Ultimately, Angola is an African oil giant boasting estimated reserves of 9 billion barrels, with production of roughly 1.22 million bpd in 2021. Then, there are its gas reserves of 11 trillion cubic feet. And since the oil and gas sector delivers a third of GDP and 90% of exports it makes sense to diversify the energy matrix, and in its wake the wider economy, to escape hydrocarbon dependence.

The Dilemma

Angola’s current energy malaise calls for urgent remedial work. Electrification languishes at just 45%, of which 65% is urban and just 6% rural. An additional installed generation capacity of 9.9GW by 2025, and a 60% electrification rate are targeted. Angola’s electrification and renewables drive underpins the Angola 2025 Strategy and 2018–2022 Sector Development Plan.

Diversifying the Matrix

Diversification is based upon the phased development of a renewable energy sector, bold electrification targets, and resolute environmental protection. Angola is no novice in the renewables arena. By end-2021, non-polluting energy was already prominent its energy mix with 68% hydropower, 31% fossil fuels and around 1.0% hybrid (solar/fossil fuel). Decarbonization of oil and gas aside, Angola also has solar and wind potential.

In fact, potentially an additional 55GW of solar energy, 18GW of hydroelectric power, and 3GW of wind power. The government has pledged to install 100MW of solar panels by 2025. To date just 20% the hydro capacity is being tapped, although 100 sites with a combined capacity of 600MW have been identified as viable. Meanwhile, an additional 100MW of energy could be generated from five potential wind farms in southern Angola.

Energetic Reform

Angola has ensured that its key state entities are lean and task oriented to meet the challenges. Rejigged for efficiency, they target electrification to stimulate diversified industrial endeavor. Duly, in 2017 parastatal holding company SONAGOL, the erstwhile Angolan fuel concessionaire, shed all non-energy businesses. The National Agency for Petroleum, Gas and Biofuels (ANPG) took over the concessionaire mantle, while SONAGOL got its boots on the ground, mapping out energy diversity.

As Paulino Fernando de Carvalho Jerónimo, CEO of the National Agency of Oil, Gas and Biofuels (ANPG) explains, upon establishment in 2019, “…the first thing we did was strategic planning [creating] four objectives: to consolidate the function of the regulator and the National Concession in ANPG; to reverse the decline in production; focus on HSE; and take care of the people.” Angola’s Minister of Mineral Resources, Petroleum and Gas, too, is unequivocal that energy transition must be inclusive at root, providing greater electrification, skills transfer and employment.

Green in the Best Way

In 2021 SONAGOL inked a USD1.5 billion solar and hydro deal with solar-project developer Sun Africa, and US-based Africa Global. These deals promise knowledge transfer and employment. SONAGOL had previously signed Angola’s first energy transition project, a 50MW photovoltaic project with Italian enterprise ENI in Namibe province. A second, 35MW photovoltaic project was confirmed for Huíla province, with French firm Total and local name Greentech Angola.

Hydrogen Explosion

SONAGOL’s strategy covers the production of green hydrogen, a hot topic in international energy circles. Early work is being done for future domestic consumption and possible export of the commodity in a project that partners German companies Conjuncta GmbH and Gauff GmbH & Co. Engineering Kg. Angola’s abundant water resources bode well for this venture.

Margin Call

Remaining with gas, Paulino Fernando de Carvalho Jerónimo reveals that, “We have a new decree in place that gives investors the right to monetize gas, which formerly only lay with the state.” The outcome is a, “…new gas consortium operated by ENI [whereby] the gas will be sent to Angola Energy in the north in order to be liquified on the spot.” Moreover, the decree renders appealing the exploitation of Angola’s long discovered, but untapped marginal fields. What’s more, exploitation of Angola’s more exotic mineral resources has consequences for international energy greening. After all, future minerals such as lithium are vital for electric vehicle batteries and stand to contribute notably to GDP as projects unfold.

Teach a Man to Fish

By 2025, renewable energy could account for 70% of Angola’s energy matrix, curbing carbon emissions by c.14% by 2030. According to the International Energy Agency, by that year renewable energy will have created 25 million jobs globally. Angola is adamant of its place at the table. The will is strong, but the targets require a skillset still not met from local expertise. Therefore, Presidential Decree no. 271/20 of October 2020 stipulated knowledge transfer to the local workforce for all businesses operating in Angola. Overall, then, aside from safeguarding the water table, soil quality, and natural biodiversity, Angola’s energy transition impacts the wider economy. This through its catalytic effect on quality of life, industrialization, agriculture, transportation, and the infrastructure essential for it all.