Tackling the Challenges of Nigeria’s Energy Transition Plan

As countries and businesses shift from fossil-based energy production to renewable energy sources like wind, solar and hydro, Ejiofor Alike reports that the adoption of natural gas as a transition fuel by the European Union (EU) is a boost for Nigeria, which has over 209 trillion cubic feet (TCF) of gas reserves that can be harnessed to help the country’s transition to net-zero emissions by 2060

The world is feeling the effects of climate change. Due to global warming, drought, heatwaves, floods and landslides are now frequent. Pakistan is reeling under the impact of its latest flooding incident, while the UK recorded its highest temperature ever of 40.2 Centigrade earlier in July 2022. In south-east Asia, unusually heavy monsoon rains and flash flooding have devastated some countries in the region, killing dozens of people, displacing thousands from their homes and destroying key agricultural areas. In Thailand, 59 of the country’s 77 provinces have been hit by floods, affecting about 450,000 homes and more than 100,000 hectares of farmland.

Like other countries, Nigeria is not exempt from the effects of global warming, with the recent incident of flooding across several states of the country. According to the Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar-Farouq, the latest flooding in Nigeria killed over 603 people, displaced 1,302,589 people and destroyed over 108,393 hectares of farmland. In addition,  Umar-Farouq stated that the disaster left 2,407 people injured, 121,318 houses partially damaged and a further 82,053 completely destroyed, together with 108,392 hectares of farmland across Nigeria partially damaged and some 332,327 hectares completely destroyed. 

About 295 million tonnes of CO2 (Carbon dioxide) is emitted in Nigeria annually, accounting for only 0.5 per cent of the roughly 50 billion tonnes of global annual emissions. 

The need to address global warming has led countries and businesses to focus on energy transition, the shift from fossil-based energy production and consumption to renewable energy sources like wind, solar and hydro.   The transition, made possible by technological advancement and a concerted push towards sustainability, aims to reduce energy-related greenhouse gas emissions through various forms of decarbonisation. Besides, renewable energy sources have proven to be a more cost-effective source of electricity. At the same time, not all fossil-fuels are regarded equally in the transition scenario. For example, natural gas is seen as having a key role to play in the transition to Net Zero. The European Union (EU), early in 2022, endorsed natural gas as a transition fuel under its sustainable taxonomy. The EU’s adoption of natural gas as a transition fuel is a boost for Nigeria which has over 209 trillion cubic feet (TCF) of gas reserves that can be harnessed to help the country’s transition to Net Zero by 2060.

Nigeria launched its Energy Transition Plan in August 2022 to demonstrate its commitment to achieving carbon neutrality, ending energy poverty, and driving economic growth. The plan focuses on power, cooking, oil and gas, transport, and industry. Vice President Yemi Osinbajo joined other players in the energy sector to launch the plan, which showcased Nigeria’s pathway to achieving net-zero emissions by 2060.

In his remarks, Osinbajo said it was time Nigeria and other African countries took ownership of transition pathways and design climate-sensitive strategies that would address peculiar growth objectives.

He said: “There is a clear need for African nations to engage more critically and vocally in conversations on our global climate future. More importantly, we need to take ownership of our transition pathways and design climate-sensitive strategies that address our growth objectives. This is what Nigeria has sought to do with its energy transition plan. It was designed to tackle the dual crises of energy poverty and climate change, and deliver SDG Seven by 2030 and Net Zero by 2060. 

“While centering the provision of energy for development, industrialisation and economic growth, we anchored the plan on key objectives, including lifting 100 million people out of poverty in a decade, driving economic growth, bringing modern energy services to the full population and managing the expected long term job loss in the oil sector due to global decarbonisation. 

“Given these objectives, the plan recognises the role of natural gas in the short term to facilitate the establishment of this low energy capacity and address the nation’s clean cooking deficit in the form of LPG. 

“The plan envisions vibrant industries powered by low carbon technologies, streets lined with electric vehicles, and livelihoods enabled by sufficient and clean energy. “The plan can create about 340,000 jobs by 2030 and 840,000 jobs by 2060. And it presents a unique opportunity to deliver truly low carbon and rapid development model in Africa’s largest economy.”

In an earlier guest article entitled “The Hypocrisy of Rich Countries’ Climate Policies” published in Savannah Energy’s 2021 Annual Report, Osinbajo had, however, enjoined rich countries to support Africa and not treat the continent with double standards in the effort to reduce global warming through renewable energy adoption.

He noted: “Reaching our development and climate ambitions, however, will require far more external support and the same policy flexibility that rich nations claim for themselves in the energy transition. We cannot achieve our goals otherwise. Despite the tremendous energy gaps, global policies are increasingly constraining Africa’s energy technology choices. Rich countries, especially in Europe, have repeatedly called for African states to use only renewable power sources. This is partly because of a naive belief in leapfrogging; the assumption that, like skipping landlines for mobile phones, Africa can ‘leap’ to new energy technologies. 

“The renewables-only mantra is also driven by unjustified fears of the continent’s future emissions. Yet under no plausible scenario is Africa a threat to global climate targets. Such demands extend even to cooking, where some funders will not support any gas projects, although they bring immediate and substantial benefits. Most Africans still use charcoal or wood for cooking, leading to deforestation, early death from indoor air pollution and avoidable carbon emissions. Instead of viewing Africa’s emergence as a threat to be blocked, the continent should be seen as a tremendous opportunity. 

“The challenge for the continent is to transition to net-zero emissions while at the same time building sustainable power systems to drive development and economic opportunity. The EU’s recent decision to label natural gas and nuclear power as green investments recognises a critical truth – different countries will follow different paths in the energy transition. If this is true for Europe, it’s even more true for diverse African nations,” Osinbajo explained.

 Osinbajo also called for patience with African countries to meet the climate targets.

“Europe says it needs a decade more of gas investment to meet its 2050 climate targets. With our greater challenges, Africa should have at least two more decades to meet our climate targets. The world cannot tackle collective challenges if poor nations are treated as second class, or their aspirations are ignored. After enduring colonialism, decades of unfair economic practices and COVID-19 vaccine apartheid, we cannot accept regressive climate policy as another injustice. “Tackling the dual crises of poverty and climate change can only succeed if all countries play their fair part and all of humanity is lifted up together,” Osinbajo added.

While Nigeria has unfolded its energy transition plan to take advantage of its benefits, including ending energy poverty, economic growth through industrialisation and employment opportunities, there are some challenges which threaten the ambitious plan.

One of the greatest challenges is the considerable cost of transiting from the current carbon energy sources. At the launch of Nigeria’s energy transition plan, the government said it needed $410 billion to reach Net Zero by 2060, but where will it get the money? Without adequate funding of the energy transition plan, the objectives may not be realised neither will the deadline be achieved.

 Another major issue is access to electricity, with the country notorious for blackouts and power grid collapses. The World Bank disclosed in its Doing Business 2020 report that Nigeria ranks 175 out of 266 countries globally in terms of access to electricity as a percentage of the population, with an estimated 45 per cent, or 85 million people, without access to grid electricity. The uninspiring data places Nigeria as the country with the biggest energy deficit globally. The Net Zero plan will be a mirage unless the government achieves access to energy for every Nigerian.

Poor public awareness about energy transition is another challenge. Nigerians need to know what energy transition is, how it impacts them and the benefits therein. Recently, America’s most populous state and the centre of United States’ car culture, California, announced a ban on selling new petrol-powered vehicles starting in 2035. Nigeria currently has a similar initiative in adopting Compressed Natural Gas (CNG)-enabled vehicles, but it needs to be stepped up so that people can know how internal combustion engine (ICE) vehicles and diesel generators increase the amount of carbon in the atmosphere. 

Following the end of COP27 in Sharm El Sheikh, Egypt, where the Nigerian Government reiterated its commitment to Net Zero by 2060, on the basis of a detailed energy transition plan, the government must work assiduously for its full implementation. Exploring bilateral support offers a window to get international funding which the government needs for the capital-intensive transition. Therefore, the announcement by the UK government at COP27 that it will provide a £95 million fund to support climate-resilient agriculture, or CRA, in Nigeria is a big win for the government. The government needs more of such support.