Diversifying the African energy system: Economic versus equitable allocation of renewable electricity and e-fuel production

Abstract

Trading of renewable energy in the form of green hydrogen and other renewable e-fuels from regions with abundant solar and wind resources is expected to play a key role in enabling the global net-zero transition. While the literature has almost exclusively focused on energy systems implications in the Global North, the types and distribution of economic benefits of trading renewable energy in the Global South are not well-understood. Here, we develop a multi-objective linear program to derive least cost pathways of gradually diversifying renewable e-fuel trade, such as hydrogen and methanol, and apply it to the case of e-fuel trade between Africa and Europe. Using a country-level Gini-coefficient approach to model the equality of per capita economic value adds, the model yields Pareto-optimal system configurations that distribute the economic benefits of decarbonization more equally in different African countries, and at the same time, diversify the source of such fuels for more robust global renewable energy trade. We find that the cost-optimal configuration concentrates e-fuel production in only a few African countries. But reducing the unequal distribution of economic value add by half increases system cost by less than 10%, and is possible at low production costs (less than 1 USD/kg for renewable methanol and less than 4 USD/kg for renewable hydrogen). Our results thus point towards cost-efficient pathways for decision makers to increase African and European renewable energy security by distributing its production across more African countries.