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How Nigeria can make effective energy transition

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Private and public sectors experts and top government functionaries have agreed on the need for Nigeria to implement a multi-faceted approach that responds to the global energy transition without undermining the country’s national growth and development.

Many of the world’s largest economies have adopted targets for net-zero emissions of greenhouse gases by 2050. A fundamental question for Africa is: As the pressure mounts for regions, countries, and companies to meet the Paris Agreement on eliminating carbon emissions, where does the continent stand?

While experts agreed that climate change is a global challenge that must be addressed with the support for energy transition from fossil fuels, there was no consensus on how to achieve this.

The speakers said Nigeria needs a home-grown approach that meets its national growth objectives and global agenda.

Addressing participants at the opening ceremony, Minister of State for Petroleum Resources, Chief Timipre Sylva, highlighted Africa’s energy resource problems, its socio-economic implication, and the impact of its transition on the continent.

“The continent is indeed blessed with multiple energy sources, fossil and non-fossil fuels. Despite this, about 600 million people in Africa lack access to electricity; and about 900 million people are without access to clean cooking fuels. Coupled with the above is a current drive towards the energy transition, threatening further aggravation of energy poverty in Africa,” Syla said.

He noted the need for the energy transition to enable cleaner energy, but  pointed out that oil would still retain major relevance in the world energy market for another 22 years, even as gas comes in a close second.

“OPEC’s long-term projection is that oil will remain the fuel with the largest share of the global energy mix, constituting about 28 per cent of global energy requirements by 2045. Gas is expected to be the second-largest fuel in the energy mix, constituting about 24 per cent by 2045. The implication is that more investment will continue to be required in the oil and gas industry to meet these projected demands, especially in developing countries,” Sylva said.

Sylva and others, including the former Cross River State Governor, Donald Duke; and Vice President Yemi Osinbajo said gas is the obvious way to produce cleaner energy while satisfying pent-up demand for power in a country where nearly half the population has no access to electricity.

Duke argued that it was ridiculous that Nigeria, which has the world’s ninth-largest proven gas reserves, has for decades been flaring millions of cubic feet of gas daily.

“Common sense will tell you that, if you’re able to pipe all that energy, and distribute it throughout the country and localise the generation of power, we would be an energy-surplus country,” Duke said, noting that gas could be Nigeria’s competitive advantage if well harnessed.

In an article in the journal Foreign Affairs, Osinbajo reinforced the importance of gas in Africa’s energy mix.

According to him, the energy transition must not come at the expense of affordable and reliable energy for people, cities, and industry.

Going by the trends, Nigeria’s gas ambitions are, however, likely to rub against the changing priorities of western banks and donors, which are being pressured by shareholders and governments to abandon lending to hydrocarbons projects.

Speaking on a panel session themed, “Energy transition: finance and investment in light of current realities,” Executive Vice President, Oando Clean Energy Limited (OCEL), Ademola Ogunbanjo explained that only a month ago the European Commission labelled nuclear and gas as sustainable energy, noting that as oil becomes more of an investment pariah, gas needs to remain attractive.

He outlined that OCEL, the renewable energy subsidiary of Oando Energy Resources, is positioned to support the efforts of the government to curate an indigenous approach to the energy mix that works based on Nigeria’s and the continent’s available natural resources to grow the Nigerian renewable energy space.

On funding for the renewable sector, Ogunbanjo said: “The funds from oil and gas will be a facilitator for the growth and scale of the renewable energy sector, especially for oil-dependent nations like Nigeria. That mix is going to stay for the next 50 to 100 years. What we will see, however, for our sake, the environment, and incoming generation, is that Nigeria must begin to invest more in renewables, reduce investments in coal, reduce investments in oil and scale-up gas, so that in the next two to three decades, renewables and gas will provide more of the energy that the country will supply to the world”.

Another session at the NIES focused on “Strategies for confronting the energy transition” with speakers like Dr. Ibe Kachikwu, former minister of state for Petroleum Resources, Mr. Mele Kolo Kyari, group managing director, Nigeria National Petroleum Company (NNPC), as well as several principals of major IOCs in Nigeria.

Led by Sylva, the session explored the implications of the energy transition as well as the broad strategies required to revive the industry’s fortune to chart a pathway for the future. These strategies include investments in physical infrastructure, establishing medium and long-term integrated energy planning among others, all guided by policies and regulations to boost sustainable development.

Experts agreed that, ultimately, indigenous companies must band to support the efforts by the government and those on the continent to curate a customised approach to the energy mix that works for Africa.

This, they noted, could be achieved when wealth is generated using accessible natural resources to invest in and grow the renewable energy space.

THE NATION

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