Nigeria and the transition to a cleaner energy mix, By Haruna Momoh

Introduction

Entry to vitality has been related to industrialidation and prosperity, whereas the shortage of it has been related to endemic poverty. It is a purpose for the clear distinction between the efficiency of most African nations and their western counterparts. As well as, growing world inhabitants triggers conversations on problems with sustainability, particularly in issues of meals manufacturing, water provide, transportation and vitality. Therefore, conversations have shifted to aligning with the UN SDG purpose 7 “Guarantee entry to reasonably priced, dependable, sustainable and trendy vitality for all”, which goals, to restrict international temperature to 1.5°C levels.

In Nigeria, as we speak, many households in rural areas, nonetheless use kerosene, firewood, sawdust, and coal. These in city areas will not be innocuous, as poor electrical energy provide and lack of environment friendly public transportation system have led to the elevated use of turbines and automobiles with larger carbon emissions. Solely not too long ago, has there been discussions on the usage of compressed pure fuel (CNG) as a substitute for gasoline for our automobiles. Nevertheless, the driving force for this focus on is price and the mode of operation of those CNG automobiles within the nation raises security considerations. In the meantime, the infrastructure required for the efficient use of CNG continues to be missing in most nations.

Because the world is transitioning from excessive carbon vitality sources to “cleaner, greener” vitality sources, it will be significant that Nigeria ought to to not be left behind.

Over 80 per cent of worldwide vitality combine is from fossil fuels. The influence on the atmosphere requires a discount of carbon emissions to tolerable ranges, the world might must get rid of 80 per cent of coal deposits, 50 per cent of oil reserves and 40 per cent of fuel deposits with out extraction, in accordance with a 2015 report by the Worldwide Vitality Company (IEA). In the end, transitions to cleaner vitality sources are decided by financial system and technological developments. Nevertheless, the determinants of these fundamentals are authorities insurance policies.

As we speak, I want to discover the vitality transition in Nigeria, addressing the challenges, alternatives, dangers and the important position of insurance policies tailor-made to native nuances, particularly for the Niger Delta folks and Nigeria.

Local weather Change, International Warming, Carbon Price range, Sustainable Vitality, Vitality Transition…What Are They?

The US Nationwide Aeronautics and Area Administration (NASA) outlined local weather change as “a long-term change within the common climate patterns which have come to outline Earth’s native, regional and international climates”. It was argued that triggers for local weather change within the twentieth century have been largely resulting from human actions, particularly the utilization of fossil fuels. Carbon emissions have been related to the trapping of related gases within the environment elevating the temperature of the earth’s floor and related sea degree rise resulting from polar ice melting which will result in flooding. This rise in temperature resulting from fossil gasoline utilization by people known as international warming.

Carbon funds is an idea used to quantify how a lot carbon related gases are emitted by governments, firms and societies to grasp how a lot might should be reduce to cut back the quantity of emissions within the society. In decreasing the carbon funds as a way to scale back greenhouse fuel emissions and finally tackling sporadic local weather change, societies are shifting in the direction of sustainable and clear vitality sources, i.e., vitality sources that may meet the present and future wants of a society, with out ever operating out, and emitting much less greenhouse gases in comparison with non-renewable fossil gasoline sources. The shift from fossil fuels to renewable, sustainable and clear vitality is the crux of vitality transition.

Why does it matter?

Why ought to we care about local weather disaster in Nigeria? Afterall, Nigeria’s contribution to international carbon emissions is simply 0.33 per cent, and we’re not as industrialised because the nations accountable for contributing considerably to carbon emissions? Nicely, our Lake Chad has misplaced 90 per cent of its water quantity since 1960 – growing the danger of meals insecurity, malnutrition and different humanitarian crises for part of our inhabitants.

Yearly, Nigeria now experiences flooding with devastating penalties. In 2022, a UNICEF Report cited that about 1.5 million youngsters wanted humanitarian help resulting from devastating floods that affected 34 out of 36 states. These floods led to circumstances of waterborne illnesses. On thirteenth November 2024, Reuters reported that heavy rains and floods ruined extra that 1.5 million hectares of farmland in Nigeria. In COP29 held in Baku, Azerbaijan, a member of the Nigerian Delegation knowledgeable an viewers that greater than 40 million folks within the Niger Delta had been adversely affected by sea degree rise with big chunk of land misplaced. We are able to element extra tales of woes, however it’s evident that now we have critical climate-induced crises on our fingers.

The Monetary Dangers for Niger Delta and Nigeria

Oil has been a mainstay of Nigeria’s financial system for a few years after it was first found in 1958, in Oloibiri, in industrial amount. We’re all dwelling witnesses to the degradation of the Niger Delta atmosphere brought on by the extraction of hydrocarbons. The foremost risk of the worldwide vitality transition to the Niger Delta and Nigeria is a depleted international change treasury to drive different sectors of the financial system, because the demand for oil assets might possible scale back within the coming years. A pointer to that is the financial influence of a stoop in oil costs on our treasury prior to now, with the uncertainty in benchmarking nationwide budgets primarily based on worldwide oil pricing. We additionally recognise that governments should determine to make vital investments into oil and fuel manufacturing within the face of uncertainty with the attendant threat of value discount or reinvest their wealth into different areas they’ve comparative benefit or analysis into environment friendly vitality use. For instance, rail is pushed by electrical energy in lots of industrialised nations and the demand for electrical automobiles remained sturdy, and most European nations intend to ban the sale of petrol and diesel-powered automobiles by 2035.

Utilizing the state of affairs of vitality transition, the easiest way to cope with it for Nigeria is to share dangers amongst many traders as we go into an unsure future, ought to there be a terminal drop in oil costs. If that is the concept, the Nigerian authorities can enhance the tempo of licensing various firms concerned with exploration and manufacturing, particularly native firms, settle litigations surrounding oil blocs allocations, incentivize indigenous producers, and arrange business-friendly rules. When sufficient revenue is generated, it may be injected into different sectors of the financial system. The important thing concern right here is velocity.

One other threat for Nigeria is being lagged behind within the dialog and implementation of methods in the direction of sustainable vitality safety. And we should all the time be aware of the truth that the query of vitality safety, is certainly a query of nationwide safety. This can be resulting from Africa contributing much less greenhouse gases in comparison with Asia, Europe and the Americas; lack of technological know-how or lack of curiosity as a result of different elementary points haven’t been tackled.

Lack of finance to deal with climate-related points is a large problem. For instance, growth of climate-resilient infrastructure is a requirement for big monetary endeavor. Aware efforts should be made in gentle of this problem. To encourage traders, we have to strengthen and streamline our regulatory framework, present consistency in authorities insurance policies, enhance our requirements, and even cultural interestedness in cleaner vitality options.

Whereas nations in Africa obtain humanitarian help from donor businesses and developed nations, these aids are merely not sufficient. Different and emergency sources of funds are wanted on this regard. This was evident from the simply concluded COP29 the place the Least Developed Nations (LDCs) bought solely $300 billion yearly, pledged by the Developed Nations, who’re the largest pollution. To assist the LDCs handle local weather change challenges, the LDCs had proposed $1.3 trillion yearly, as grants and never loans. The wealthy nations insisted that they may conform to $1.3 trillion yearly, by the 12 months 2035, about 11 years from now. Nevertheless, the pertinent query to ask is: when will the pledged paltry sum of $300 billion yearly, change into CASH. With no clear definition of what constitutes this Finance, the mantra now’s “I Pollute, You Pay”.

Alternatives

Nigeria’s present vitality combine is a mix of pure fuel fired energy stations, coal, and hydroelectricity. The present challenges of our electrical system are inadequate uncooked materials provide – particularly to our fuel stations, lack of energy technology capability, centralization of the facility grid, out of date transmission infrastructure, and frequent tools vandalism. All these result in frequent collapse of our grid and consequently nationwide energy outages.

In response to the Rural Electrification Company (REA), about 86 million Nigerians lack entry to grid electrical energy, one of many highest quantity by international requirements. Primarily based on the Nigerian Electrical energy Act 2023 that liberalizes the technology, transmission and distribution of electrical energy, it’s useful for state governments to reap the benefits of this legislation, be part of forces with the personal firms and supply vitality safety for his or her folks.

Pondering of a sustainable vitality combine requires a mixture of sources. For instance, within the Netherlands, wind, photo voltaic, and biomass contribute 18 per cent, 15 per cent, and seven per cent, respectively; with the most important contribution from fossil fuels. On my go to to Martinique in Could 2019, I noticed a big photo voltaic farm with photo voltaic panels in one of many cities. The local weather patterns of Martinique isn’t too dissimilar to Nigeria’s, particularly because of the nation’s proximity to the equator, giving Nigeria latitude as one of many nations with essentially the most publicity to daylight. Regardless of the abundance and depth of daylight, Africa hosts just one per cent of worldwide put in photo voltaic services. A technique we are able to present sustainable vitality to rural areas and even energy houses, streetlights and hospitals is arising with devoted photo voltaic farms to serve that curiosity. On Friday sixth December, 2024, the governor of Oyo State inaugurated the primary part of 11 megawatt Ibadan Hybrid Energy Plant Challenge, the primary of its variety within the state. The primary part of the challenge includes 1 megawatt solar-powered system and 4 megawatt gas-powered producing system. The governor, throughout the inauguration, had said that the state was aiming at a 500 megawatt solar energy technology challenge to fulfill home wants and promote to neighbouring nations. This initiative is extremely commendable and needs to be replicated on a better scale by different state Governors.

On Tuesday, nineteenth March, 2024, the Nigerian vice chairman, Kashim Shettima, had said that the Nigerian Sovereign Wealth Fund deliberate to construct a 20 megawatt solar energy plant, a primary step in the direction of an formidable 300 megawatt challenge. A evaluation report by ThisDay had round June, 2024, indicated that the Nigeria Sovereign Insurance coverage Authority had accomplished the event and building of a ten megawatt photo voltaic vitality challenge in Kumbotso Native Authorities Space in Kano State. The report additionally highlighted a number of ongoing photo voltaic vitality tasks, together with the 5,600 megawatt Argungu Photo voltaic Vitality Park in Kebbi State, anticipated to return on stream in 2027; the 1,000 megawatt Jigawa Photo voltaic Challenge and the 350 megawatt Lafia Photo voltaic Challenge. Many of the photo voltaic tasks are on the announcement stage. The Rural Electrification Company (REA) is on the forefront of driving photo voltaic mini-grids and photo voltaic programs to serve rural communities. The highlights are indicators of financial alternatives resident in such tasks.

By way of wind vitality, the primary wind farm in Nigeria, a ten megawatt utility-scale wind farm, was commissioned in Katsina State in 2020. As a result of stronger wind-patterns in coastal areas, wind vitality can be harnessed therefrom. Nigeria has an abundance of floor and floor water sources comprising an estimated 87 billion cubic meters of floor water assets and 215 billion cubic meters of floor water, with greater than 853 km of coastland and an annual rainfall of three,500 mm. Inland water sources just like the River Niger has made the nation a pretty supply for growing hydroelectric vitality sources within the Kainji Energy Station and Jebba Energy Station. Due to the motion of waves, tides, energetic wind patterns, wind energy will be harnessed to seize and convert the wind vitality to generate electrical energy for the coastal and adjoining areas. Wind vitality within the Niger Delta will be harnessed to provide electrical energy for the locals, particularly offshore wind farms, on a big scale. The proximity of communities the place the vitality is consumed and the supply of off-grid infrastructure will possible scale back vitality prices and supply vitality safety for coastal communities.

A number of nations are already contemplating geothermal vitality, together with a rustic like Kenya. In Nigeria, now we have sources of geothermal vitality, like Ikogosi Heat Springs in Ekiti State, and Wikki Heat Springs in Bauchi State. The Mambilla Plateau hydroelectric energy challenge is one other big alternative. Extant legal guidelines might should be checked out to encourage these approaches. The purpose to spotlight right here is that the assets can be found, and in abundance. Managing our vitality assets effectively may also help Nigeria attain local weather neutrality even quicker than some nations.

Biofuels from biomass are additionally being researched as a substitute supply of powering automobiles, engines and machines. Biomass sources like bushes, shrubs, agricultural waste, and residential waste will be transformed to vitality. Waste generated from breweries is an effective feed for pigs for these into pig farming. Lecturers in Nigeria can think about analysis into conversion of biomass to biofuels utilizing thermochemical strategies, biotechnology and biochemical conversion. Utilising biomass as vitality sources requires a roadmap and schooling of native communities on environment friendly strategies to provide biofuels. Additionally, firms can get thinking about bio-refineries and bio-engines using such fuels will be in the long run plans.

Nonetheless on biofuels, a quickly growing Nigerian inhabitants means extra waste can be generated. Managing waste in Nigeria has been a historic problem in city and rural areas. Generated natural waste is often left to decay or buried in landfills. In areas near such landfills, well being issues arising from effluents have been reported in addition to the infiltration of pollution in groundwater provide. An space of energy is environment friendly waste administration methods and recycling practices to reuse a number of the waste as manure or different merchandise to cut back the amount of waste deposited in landfills and subsequent carbon emissions.

A important problem within the growing world is endemic poverty and lack of financial alternatives for the inhabitants. Research have proven that tasks related to renewable vitality are projected to create extra jobs than fossil gasoline vitality sources. These are within the space of fabrication, gross sales, set up and upkeep of renewable vitality units. Additionally, an space of funding is within the growth of renewable vitality infrastructure like off-grid infrastructure to evacuate vitality from supply and bypass ageing infrastructure. This can be extra relevant in rural areas.

The time to full vitality transition is unsure. Till fossil gasoline sources are utterly changed by clear, renewable and sustainable vitality sources, the usage of fossil fuels as an vitality supply will possible not finish abruptly. Regardless of the rise in cleaner vitality sources, they’ll hardly sustain with international vitality demand, which suggests fossil fuels will proceed to bridge the vitality provide hole. At worst, a fossil vitality supply that burns extra effectively and emits much less greenhouse gases might function a bridge within the vitality transition interval. It’s worthy of word that fossil fuels pursuits worldwide are very highly effective, because of the big quantity of assets of their arsenal.

This brings us to the problem of fuel assets. A report by Gulf Occasions on third of November 2024 posited that Qatar’s LNG manufacturing will rise by 35% in 2027, as extra calls for from Europe are anticipated. This is able to elevate per capital revenue of the Gulf nation in extra of $80,000. Following the Russian-Ukraine Conflict, fuel costs surged in 2022, and within the first quarter of 2024, Qatar declared a funds surplus of about USD$550million, with oil and fuel contributing considerably to the nation’s earnings. Given Nigeria’s fuel reserves, the nation can do higher in growing the tonnage of fuel manufacturing to spice up our international change earnings. This is able to drastically improve the financial outlook for the Niger Delta and Nigeria.

To deal with coastal erosion within the Niger Delta, sturdy coastal defence programs are wanted. We have now quite a bit to be taught from different nations who’ve such infrastructure, just like the Netherlands which have related infrastructure. There are numerous sources of worldwide funding that may be assessed to deal with a few of these challenges.

One might even see it as an inner contradiction that an advocacy for clear vitality calls for large investments in growing our plentiful fuel assets and infrastructures. The reality concerning the matter is that Nigeria is certainly a fuel nation, with a confirmed fuel reserves of about 210tcf and a paltry 40b barrels of oil reserves.

A important useful resource in demand worldwide and helpful for the way forward for sustainable vitality is lithium. Lithium is utilized in rechargeable batteries for cellphones, laptops, solar energy batteries, and electrical automobiles. That is aside from the opposite medical makes use of. It’s enticing resulting from its price and storage capability over lengthy intervals of time when in comparison with standard vitality storage programs. Experiences challenge that lithium demand will rise from 720,000 metric tonnes in 2022 to three.2 million metric tonnes by 2030. Lithium is at present being mined in Nasarawa, Kogi, Cross Rivers, and Ekiti States, with extra prospects in Oyo and Kwara States in Nigeria.

The Nigerian present coverage for lithium mining is that no firm shall be allowed to export uncooked lithium besides lithium processing and refining crops are arrange in Nigeria in the direction of worth addition. Whereas international firms are surging for lithium mining in Nigeria, you will need to present incentives for native firms to take part, and for banks to plough their earnings as investable capital into such mining actions. To keep away from being on the mercy of others, with the growing demand for lithium particularly by China, Nigeria can reap financial advantages by tapping into the lithium worth chain. Different minerals in Nigeria present in industrial portions which can be key within the vitality transition dialogue embody copper (present in Bauchi, Gombe, Kano Kogi, Nasarawa, Niger Oyo, Plateau, and Zamfara States, and FCT Abuja), nickel (present in Kaduna, Kano and Plateau States). Nigeria can be stated to host one of many highest reserves of cobalt within the African continent.

In all, Nigeria not solely has assets for growing sustainable vitality sources, but additionally has minerals helpful for the vitality transition recreation. It is very important gather country-wide knowledge to have an understanding of mineral reserves in order that exploratory actions will not be left within the fingers of international entities alone, whereas the nation to profit essentially the most, lacks the technical know-how on prospects and exploratory strategies.

Suggestions

It’s time for us to maneuver from concepts to actions. Deliberate insurance policies should be put in place to advertise the event and adoption of renewable and sustainable vitality sources for cities and cities which can be nonetheless removed from the vitality combine.

Grid enlargement can be an space for energetic investments. Vitality produced and never correctly evacuated to end-users find yourself as wasted investments. Environment friendly Transmission infrastructure is subsequently important within the vitality combine.

Whereas the method to local weather neutrality is ongoing, nations can maximise their present potentials. For instance, a Bloomberg report on Thursday twenty first November 2024 highlighted that Kuwait proposed to spend over $33 billion to ramp up oil manufacturing capability, inserting a wager on elevated demand for many years to return. I’d suggest that Nigeria vitality chiefs put investments in place or articulate sturdy insurance policies to draw traders to sweat most of our fallow belongings within the Niger Delta, reinvest the generated funds in different sectors of the financial system, like expertise growth in constructing sustainable cities and cities.

Gasoline has been stated to be an enabler of the vitality transition, as a result of it burns extra effectively and reduces emission of greenhouse gases. Nigeria has about 210tcf of confirmed fuel reserves, making the world a pretty vitality useful resource base within the vitality transition recreation. Unproven fuel reserves in Nigeria are in extra of 600tcf, making Nigeria a profitable fuel province. Harnessing our fuel reserves each in fuel powered stations and the export market can viably help us throughout the vitality transition part.

Incorporation of sustainable vitality programs in our faculty curriculum to reinforce the skill-set of the youthful and bulging inhabitants. This manner, our youth inhabitants will be ready to change into renewable vitality entrepreneurs, for instance, within the space of design and fabrication of renewable vitality devices, manufacturing of feed-stock for biofuels, set up and upkeep of photo voltaic panels, and so forth.

A possible problem and a difficulty now we have seen repeatedly within the Niger Delta is coastal flooding. This may occasionally hamper the event and utilisation of vitality assets. Thus, local weather infrastructure tasks, like dikes and levees, are urgently wanted. This after all would require huge investments which will be sourced from overseas.

Nigeria already confirmed the potential for innovation with the emergence of technology-driven companies in addition to analysis into the usage of photo voltaic vitality. This factors to the usefulness that investments in analysis into renewable vitality applied sciences will foster regional cooperation and growth. Within the Niger Delta and countrywide, now we have the assets, now we have the folks; we want the investments to rework the folks into highly-skilled innovators and to rework the assets in the direction of a sustainable vitality future for our folks. As we’re considering of 2025 and past, what proportion of our nationwide funds is devoted to local weather change motion and vitality transition?

Authorities must work with worldwide organisations to have entry to funding in addition to create incentives for traders to faucet into our huge renewable and clear vitality assets.

Conclusions

On this contribution, I’ve introduced a perspective on the vitality transition query with consideration to our fledging growing atmosphere. I’ve highlighted the challenges, threats and alternatives for Nigeria. The abundance of renewable vitality assets within the nation can’t be overemphasised; particularly the proximity to the equator for photovoltaic expertise, a greater than 853-kilometre shoreline for marine vitality, entry to scorching water underground sources for geothermal vitality growth, biomass and biogas. We have now recommended suggestions that may assist information authorities insurance policies each in taking deliberate motion, creating vitality safety and empowering the inhabitants.

Renewable vitality finance can be a important concern. Whereas growing nations can not go cap-in-hand all the time to depend on developed nations to finance renewable vitality tasks, now we have made a case for utilizing a transitionary useful resource resident in Nigeria to get the capital wanted for the event of renewable vitality useful resource in the direction of a sustainable and sturdy vitality and financial future.

Haruna Momoh is the previous managing director of Petroleum Merchandise Advertising and marketing Firm Restricted (PPMC Ltd).