The world has witnessed a very high level of global growth over the last century and this has mostly been driven by fossil fuels. Over this period of time, there has been wanton exploration to feed increasing energy demands to fuel continued growth as global organizations seek to generate mega profits for investors and Governments. As would be expected, we’re now at a point where global warming is not only a distant buzz phrase but a phenomena whose effects are being felt to different extents in different areas.
As the voices against depletion of natural resources and greenhouse gas emissions get louder, PwC’s Africa Oil and Gas Review 2020 anticipates that the global transition to renewable energy will accelerate rapidly throughout the coming decade, causing exponential disruption as well as opportunities in Africa and beyond.
The decade of the 2020s will be recorded in history as a pivotal period for the planet, the global economy and the energy and power landscape. As we approach the end of 2020, and review the estimated pandemic-induced damage, The Oil and Gas Review reports significant delays affecting investment and projects, an estimated decrease in oil production of 19% for the top five African producers for 2020 and a depressed market outlook in general. In addition to COVID-19 induced market disruptions, African countries, many of which are very reliant on oil and gas revenues, have had to divert fiscal resources to supporting healthcare and welfare responses to the pandemic.
In the 2019 Africa Oil and Gas review, many of the industry trend lines were heading towards positive territory for the first time in several years. COVID-19 has reversed most of these gains as the global economy experienced the biggest oil demand slump in history, at nearly 40 times worse than the global financial crisis of 2007-2008.The pandemic has accelerated the global energy transition with many countries using renewable energy projects to anchor economic stimulus packages and drive economic diversification. With global oil demand now estimated to never again exceed 2019 demand levels, the global energy markets have truly reached a tipping point – with significant implications for Africa’s oil and gas industry.
“Over the past decade, we have witnessed a phenomenal global transition towards cleaner energy sources which are environmentally friendly. In Kenya, this is evidenced by increased investments from both public and private sector players in renewable energy projects”
Isaac Otolo- PWC
Kenya has proven to be an attractive destination for investment in renewable energy projects. However, it’s very important for investors and other stakeholders to understand the regulatory landscape in order to set up and manage successful renewable energy operations in Kenya. These considerations include the legal and regulatory framework governing these projects, the role and function of the regulator, and clearances for operation of renewable energy entities in Kenya as well as certain tax considerations.