Capacity Building in Power Generation: North America, Europe, and Africa | Hogan Lovells

[Author: Judith Elemele]

Welcome back to Energy Buzz, your regular snapshot into the latest topics in the energy industry from Hogan Lovells. Here we explore power generation capacity building in North America, Europe, and Africa.

In the face of rapidly growing energy demands, North America, Europe, and Africa are pursuing different strategies in power generation capacity building. These strategies reflect a divergent focus on technological adoption, investment priorities, and strategic planning influenced by each region’s unique energy challenges.

Strategic Energy Investments: Understanding the Unique Drivers

North America is increasing its power generation capacity to confront significant reliability issues with its electricity grid caused by growing demand from technological developments, including artificial intelligence (AI). A prime example is ExxonMobil’s initiative to build its first commercial gas power plant dedicated to supplying electricity to an AI data centre. This is indicative of a wider trend amongst energy providers to expand their power generation portfolio in anticipation of a 16% demand increase (in North America) over the next five years.

Across the Atlantic, Europe is advancing its renewable energy capabilities, particularly in solar and wind power, to meet ambitious climate targets. For example, in 2024, Germany added 16.2GW of new solar capacity, part of a broader EU strategy to reduce reliance on fossil fuels.

In contrast, sub-Saharan Africa has to deal with fundamental issues of electricity access, combined with rapid population growth and inadequate infrastructure. To tackle these issues, the Lagos state government in Nigeria plans to increase power generation capacity by constructing gas-fired power plants with a projected capacity of up to 4,000MW. In addition, the World Bank and other entities have committed substantial resources towards rural electrification and off-grid solar projects intended to provide basic electrical services to millions of people. The aim is to reduce the state’s dependence on the national grid and improve energy availability for the growing economy and population.

Technological Divergence and Economic Implications

The strategic approaches across North America, Europe, and Africa, reflect their unique economic and environmental priorities. North America’s focus on enhancing capacity to advance industries, such as AI and digital services leverages both renewable and conventional power sources to meet rising energy demands. Meanwhile, Europe prioritises a sustainable energy system, significantly increasing investments in renewable energy sources. The strategy supports ongoing industrial and technological expansion, contributing to economic growth. Africa’s focus, on the other hand, emphasises the need for basic energy access and security through improved infrastructure. The construction of fossil fuel power plants in Nigeria addresses the immediate energy shortages, thereby supporting economic development in the country.

The three regions illustrate that power generation is not just about producing energy but is fundamental to wider economic strategies. Each strategy has its unique challenges and opportunities which shapes the economic trajectories of the regions and their impact on the global energy landscape.

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