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Rystad Energy

Rystad Energy

Rystad Energy is an independent energy consulting services and business intelligence provider offering global databases, strategic advisory and research products for energy companies and suppliers,…

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Africa’s Geothermal Power Sector Set To Overtake Europe

  • Total geothermal power generation capacity in Africa may reach 13GW in 2050.
  • Kenya and Ethiopia will lead the growth of Africa’s geothermal sector, accounting for close to 90% of total capacity.
  • Many African countries with geothermal potential rely heavily on hydropower for their electricity supply.
Geothermal

Africa’s geothermal sector will attract at least $35 billion in investments by 2050, showing the critical role geothermal is set to play in meeting the continent’s rapidly growing energy demand. Rystad Energy’s latest projections reveal this significant investment will see Africa’s installed geothermal capacity surpass Europe by the end of the decade.

Despite being home to only about 1 gigawatt (GW) of geothermal capacity in 2023 – half of Europe’s total – Africa's total installed capacity will more than double by 2030, based solely on already announced projects. If we also consider yet-to-be-announced projects needed to meet government targets, capacity could triple by 2030. By 2050, we expect geothermal power generation capacity in Africa to expand to 13 GW, more than double the expected 5.5 GW of installed capacity in Europe. Kenya and Ethiopia will lead the growth of Africa’s geothermal sector, accounting for close to 90% of total capacity.

The geothermal industry in Africa is picking up steam and could help meet soaring demand across the continent in the decades to come. Analyzing already announced projects signals significant growth on the horizon, but developments that we project to come online given economics and demand really highlight the rapid build out. This growth will take the continent from being the sixth largest geothermal power generator in 2023 to the third largest in 2030.

Daniel Holmedal, senior supply chain analyst, Rystad Energy

Geothermal power has contributed to Africa's energy sector since the 1950s. The Democratic Republic of Congo was the third country in the world to build a geothermal power plant, with the commissioning of the Kiabukwa power plant in 1952. Today, international players are increasingly looking to the East African Rift for growth opportunities as geothermal energy provides a stable energy source that complements intermittent sources like wind and solar. Rystad Energy forecasts that investments in Africa’s geothermal sector will reach at least $35 billion from 2024 to 2050, driven by rapidly growing energy demand in East Africa.

International expertise and technical assistance have helped contribute to the growth of East Africa’s geothermal sector, in turn fostering the development of domestic expertise. Kenyan companies such as the Geothermal Development Company (GDC) and Kenya Electricity Generating Company (KenGen) are playing key roles in helping neighboring countries establish their geothermal industry.

Kenya and Ethiopia will lead the growth of Africa’s geothermal sector, accounting for close to 90% of total capacity. This is due to their rich geothermal resources and the need to diversify Ethiopia’s power mix. The power supply in the two countries is expected to increase six-fold from 2023 to 2050, rising from 34 terawatt-hours (TWh) to 222 TWh. Rystad Energy projects that geothermal supply from the pair will rise well above 10 GW by 2050, potentially reaching as high as 12 GW.

Many African countries with geothermal potential rely heavily on hydropower for their electricity supply. Ethiopia, for instance, currently sources 88% of its electricity from hydro. However, this dependency places these countries at risk to external weather conditions such as droughts. By incorporating more geothermal energy into their power mix, African nations can help reduce their dependency on hydropower and mitigate these risks. While Kenya has limited potential for large-scale hydropower projects, estimated at around 1-1.5 GW, Ethiopia has significant potential for hydropower generation. Its controversial Grand Renaissance Dam on the Nile, for example, has a capacity of more than 5 GW.

To achieve a 13 GW geothermal capacity in Africa by 2050, Rystad Energy's base case scenario relies heavily on the development of geothermal resources in Kenya and Ethiopia. Kenya has already demonstrated its commitment to incorporating geothermal energy into its power mix. With abundant geothermal resources, strong local expertise and increasing interest from international players, it is expected that Kenya will exceed 8 GW of geothermal capacity by 2050. Ethiopia faces several challenges, however, and it is imperative that projects like Tulu Moye, Aluto-Langano and Corbetti prove their worth if the country is to exceed 3.5 GW of installed geothermal capacity by 2050.

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By Rystad Energy

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