Hydropower tops Africa's 2024 energy growth

From the newsletter

A new report from IRENA shows that half of all new energy installations in Africa for 2024 were hydropower. Solar came in second, with over 1800 MW installed. Most of the new capacity was concentrated in just four countries: Ethiopia, Egypt, South Africa, and Tanzania, which together accounted for 65% of the 2024 installations.

• There is renewed interest in hydropower for dependable power as variable renewables grow. Cameroon and Malawi are some of the countries that have had hydropower projects secure financing in 2025.

• The solar energy market has undoubtedly matured, with grid installations in over 20 African countries. Wind projects are mainly in the north and south, where potential is high. 

More details

• Over the last decade, investment in renewable energy has overtaken fossil fuels.  Despite this global trend, Africa still relies on fossil fuels for 70% of its electricity.  However, recent progress in renewables offers a positive future. In 2024, the continent saw 4,226 MW of new renewable energy installations, a significant 1000 MW increase from 2023.

• Hydropower was a key contributor to this growth, with 2024 installations exceeding 2023 capacity by over 500 MW. Ethiopia led the way with 800 MW, largely due to the near-completion of the GERD dam. Tanzania added 705 MW, primarily from the recently finished Julius Nyerere Hydropower Station, and Uganda contributed 200 MW from the Kariba dam completed last year.

• Solar energy is emerging as the leading renewable source, with over 7,400 MW of new capacity installed in the last five years. This is than hydropower and double the capacity of wind power. Its installations are also more widespread across the continent due to the availability of solar resources throughout the region. The sector's growth has attracted significant projects, such as the 1,200 MW Abydos Phase II project in Egypt, which is currently under development.

• In terms of installed capacity in 2024, Egypt led with 704 MW, followed by South Africa at 506 MW, and Tunisia at 267 MW. Egypt also has the largest pipeline of solar projects under development, exceeding 2,300 MW, with South Africa and Tunisia maintaining the same ranking.

• Wind energy remains less developed compared to other renewable technologies. In 2024, only Egypt and Morocco added a combined generation capacity of 579 MW to their grids. However, there are more wind projects in the pipeline across North and South Africa, with some expected to become operational before the end of 2025. Unlike solar panels, wind turbines are large and difficult to transport inland due to their size. They are best suited along the coastline where there is plenty of wind and ease of transportation.

• Looking ahead to 2025, we have already seen significant investment in the renewable energy sector in the first quarter. Overall, positive economic forecasts are providing a favourable signal for energy investments. With demand expected to rise, investors are likely to allocate more capital to energy projects.

Our take

• The balanced mix of renewables in Africa indicates the sector is mature and the technology is affordable. With prices for solar projected to continue declining, it will undoubtedly become the leading technology in installed capacity in the future.

• Although solar energy is currently expanding more rapidly, hydropower's large-scale nature provides a greater overall capacity than solar panels. There is potential to explore more of these opportunities, even in small-scale projects, particularly on small rivers to support agricultural industries in rural areas.

• Wind projects have proven challenging for many African countries due to logistical difficulties. This is not expected to change soon. A few countries, especially those in North and South Africa, will continue investing in this sector.