GRACELIN BASKARAN: Boosting Africa’s renewable energy capacity can cut reliance of US and EU on China
African countries can stop exporting their battery storage metals and can instead manufacture regionally
The US is stuck between a rock and a hard place as it grapples with China’s dominance in manufacturing renewable energy against a backdrop of vast human rights abuses stemming from the mass incarceration and forced labour practices of minority groups. This opens up an important channel of economic diplomacy for the African continent, which is well endowed with key resources for battery storage and solar panels.
Strengthening Africa’s capacity in the renewable energy supply chain can help the US and EU reduce their reliance on China and help the African Continental Free Trade Area (AfCFTA) become a central part of the clean energy transition. There are two avenues for integrating Africa into the clean energy transition and engaging in economic diplomacy.
African countries can stop exporting their battery storage metals and can instead manufacture regionally. The region is well endowed with the raw materials needed to manufacture battery storage.
In 2019 Zimbabwe and Namibia were among the top eight producers of lithium worldwide. SA is the world’s largest producer of manganese, a key battery metal. The Democratic Republic of Congo (DRC) is home to nearly 70% of the global supply of cobalt used in the lithium-ion batteries. And Mozambique, Madagascar and Tanzania are among the 10 countries with the largest graphite deposits.
But these raw resources are exported to China, which now dominates battery manufacturing with 93 “gigafactories” that manufacture lithium-ion battery cells, while the US has only four. If current trends continue, China could have 140 gigafactories by 2030, Europe will have 17 and the US 10. Tesla and Toyota are building battery gigafactories to dominate the electric vehicle battery market. Graphite is an example of the skyrocketing demand for battery metals — graphite exports from Africa to China increased by 180% year on year in 2019.
Building a regional battery storage manufacturing sector is an opportunity to materialise benefits from the AfCFTA. It would also reduce global reliance on China, which now produces 74% of the world’s lithium-ion batteries and continues to expand its manufacturing capacity despite a deep reliance on Africa for raw materials. Africa is endowed with 30% of the world’s minerals but accounts for just 3% of its GDP, which makes manufacturing renewable energy both an immense economic opportunity and an important channel to build economic diplomacy with the US and EU.
Africa could also expand its production of solar panels. Most solar panels require polysilicon, the basic raw material used in solar photovoltaic modules. China has 80% of the world’s polysilicon. Seven of the 10 largest solar panel producers are in China; some manufacture in Xinjiang, where vast human rights abuses occur. About 90% of the world’s solar panels use polysilicon.
But there is another option that Africa could build on. First Solar, a US company, uses a different technology. Instead of polysilicon it uses a thin film of cadmium telluride. Cadmium tellurium forms a compound that promotes improved electrical conductivity. Thus, a thin film can effectively absorb sunlight and convert it into electricity. It’s just one thousandth of a millimetre thick and absorbs 90% of the light that hits it.
Until a few years ago First Solar produced solar panels cheaper than polysilicon products. They require less labour, energy and time to produce and they use 98% less semiconducting material. But as polysilicon reached economies of scale it became cheaper than cadmium telluride. As countries grapple with human rights abuses and as investors become increasingly socially and environmentally conscious, it is a safe bet they might be willing to pay a premium for ethical sourcing.
Tellurium comes from large-tonnage, low-grade ores containing copper and copper gold, and is a byproduct of copper refining. The DRC, Zambia, SA and Namibia are copper hot spots that could be tapped into. Earlier this year mining giant Rio Tinto announced that it will build a $2.9m plant to recover tellurium at its Kennecott copper mine in the US, to increase production of thin-film solar panels.
So though thin-film technology now accounts for a small share of solar panel production there is substantial potential to increase this. Given the copper endowments in Sub-Saharan Africa, manufacturing thin-film technology in the region could give the world an alternative to polysilicon solar panels. Amid looming geopolitical instability, Africa’s development of renewable manufacturing can provide countries that are asking whether they should stand up to human rights abuse or procure solar panels a viable alternative.
It could also have immense economic benefits for the region. The transition from fossil fuels to clean energy will create a demand of 3-billion tonnes of minerals and metals needed to deploy solar, wind and geothermal energy by 2050. Building renewable manufacturing capacity can help move Africa onto the main stage for the clean energy transition.
• Dr Baskaran (@gracebaskaran), a development economist, is senior research fellow at the University of Cape Town’s Development Policy Research Unit.
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