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SUSTAINABLE WORLD ENERGY OUTLOOK

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SUSTAINABLE WORLD ENERGY OUTLOOK ( sustainable-world-energy-outlook )

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image FLOWING WATERS OF THE TUGELA RIVER IN NORTHERN DRAKENSBERG IN SOUTH AFRICA. image A SMALL HYDRO ELECTRIC ALTERNATOR MAKES ELECTRICITY FOR A SMALL AFRICAN TOWN. africa: future costs of electricity generation Figure 5.62 shows that the introduction of renewable technologies under the Energy [R]evolution scenario does not increase the costs of electricity generation in Africa compared to the Reference scenario - assuming fossil fuel prices and investment costs according to the pathways defined in Chapter 4. Because of the lower CO2 intensity of electricity generation, electricity generation costs will become economically favourable under the Energy [R]evolution scenario and by 2050 costs will be $ 9.7 cents/kWh below those in the Reference version. Under the Reference scenario, by contrast, unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $ 85 billion per year to more than $ 493 billion in 2050. Figure 5.62 shows that the Energy [R]evolution scenario not only complies with Africa’s CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are 31% lower than in the Reference scenario, including estimated costs for efficiency measures. Under the Reference version, the levels of investment in conventional power plants add up to almost 40% while approximately 60% would be invested in renewable energy and cogeneration (CHP) until 2050. Under the Energy [R]evolution 5 scenario, however, Africa would shift almost 97% of the entire investment towards renewables and cogeneration. Until 2030, the fossil fuel share of power sector investment would be focused mainly on CHP plants.The average annual investment in the power sector under the Energy [R]evolution scenario between today and 2050 would be approximately $ 62 billion. Because renewable energy has no fuel costs, however, the fuel cost savings in the Energy [R]evolution scenario reach a total of $ 2,596 billion up to 2050, or $ 65 billion per year. The total fuel cost savings therefore would cover almost 2 times the total additional investments compared to the Reference scenario.These renewable energy sources would then go on to produce electricity without any further fuel costs beyond 2050, while the costs for coal and gas will continue to be a burden on national economies. figure 5.63: africa: investment shares - reference scenario versus energy [r]evolution scenario figure 5.62: africa: total electricity supply costs and specific electricity generation costs under two scenarios Bn$/a 500 400 300 200 100 ct/kWh 18 16 14 12 10 8 6 4 2 REF 2011 - 2050 Total $ 998 billion E[R] 2011 - 2050 Total $ 2,475 billion 2% CHP 3% NUCLEAR 58% RENEWABLES 37% FOSSIL 3% FOSSIL & NUCLEAR 5% CHP 92% RENEWABLES 00 2009 2015 2020 2030 2040 SPEC. ELECTRICITY GENERATION COSTS (REF) •‘EFFICIENCY’ MEASURES •REFERENCE SCENARIO (REF) ENERGY [R]EVOLUTION (E[R]) 2050 SPEC. ELECTRICITY GENERATION COSTS (E[R]) africa: future investments in the power sector It would require $ 2,475 billion in investment for the Energy [R]evolution scenario to become reality (including investments for replacement after the economic lifetime of the plants) - approximately $ 62 billion annually or $ 37 billion more than in the Reference scenario ($ 998 billion). 121 © AUSTIN/DREAMSTIME © PG-IMAGES/DREAMSTIME key results | AFRICA - ELECTRICITY GENERATION

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