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The Plausibility Of The Nigerian Energy Transition Plan By 2030

The Plausibility of the Nigerian Energy Transition Plan by 2030
The Plausibility Of The Nigerian Energy Transition Plan By 2030

Nigeria is a country with a major impact on the achievement of UN Sustainable Development Goal 7 (SDG 7), which requires universal access to clean, affordable and accessible energy. According to the latest data put forth by ‘The Energy Progress Report, 92 million Nigerians do not have access to electricity while 175 million do not have access to clean cooking solutions. At the same time, the reality and severe impacts of climate change are currently manifested via natural disasters in the form of flooding, pollution, erosion, desertification and the associated socio-economic consequences.

The Nigerian Energy Transition Plan (ETP)

Thus, it is a priority for the nation to call for and model bold action to tackle fuel poverty and mitigate climate change. This initiative served as a backdrop to Nigeria's leadership in becoming the first African country to develop an Energy Transition Plan (ETP) in 2021. Working in partnership with Council UK's Energy Transition Plan, Sustainable Energy for All (SEforALL) and McKinsey, the Nigerian Government drafted the Energy Transition Plan to address the twin crises of energy poverty and climate change, achieving SDG 7 by 2030 and net zero by 2060 while providing energy for development, industrialization and economic growth.

The ETP which can indeed be considered to be one of the major energy innovations of the year 2022 outlines pathways for meaningful development of low-carbon energy systems in five key sectors: Energy, Cooking, Transport, Industry, and Oil & Gas, and highlights the key role natural gas has to play as a transition fuel on Nigeria's path to net zero. 

Since its inception, the ETP has been endorsed by the Nigerian Federal Executive Committee (FEC) and adopted as national policy. Also, an Energy Transition Implementation Working Group (ETWG) was established, chaired by His Excellency Vice-President Yemi Osinbajo (SAN) and made up of several key ministers, including the ministers of Environment, Energy, Finance, Works and Housing, Oil Resources and Foreign Affairs to promote the implementation of the plan. SEforALL and Global Energy Alliance for People and Planet (GEAPP) support the working group through their own secretariat, the Energy Transition Office (ETO).

According to the ETP, reaching Nigeria's net-zero emissions target will require spending $1.9 trillion by 2060, including $410 billion above typical spending for dismantling to net spend of $150 billion in generation capacity, $135 billion in transmission and distribution infrastructure, $79 billion in kitchens, $21 billion in industry, $12 billion in transportation and $12 billion oil and gas decarbonization. The additional financial needs imply that Nigeria needs to raise around $10 billion per year

This represents a significant increase over current climate and energy investments in Nigeria and even Africa as a whole. For example, annual climate finance flows in Africa total only $29.5 billion, and only 3% of 632 billion US dollars invested as climate finance in 2019/2020 went to sub-Saharan Africa. Likewise, only about 2% ($60 billion) of the $2.8 trillion invested in renewable energy between 2000 and 2020 reached Africa.

With the ETP, Nigeria seeks to advocate for improved climate and energy finance flows by signaling the magnitude of the potential impact and a clear commitment to an emissions reduction path supported by a robust decarbonization pathway, translated into near Term Commitments/Milestones.

Asides securing an initial $10 billion support package to endorse and kick-start the implementation of the ETP, a pipeline of transition related energy projects and programmes worth about $23 billion has been identified across generation, transmission, distribution, metering, gas commercialization, clean cooking, e-mobility, healthcare, education, and technical assistance.  Some of the programs featured are the Naija Solar Energy Project (which seeks to bring electricity to up to 25 million people by providing 5 million new connections based on solar energy [Solar Home Systems (SHS)]. and mini-grids)), the Clean Cooking Expansion Project (which aims to convert 30 million homes from dirty fuels such as firewood, kerosene and charcoal to cleaner fuels such as LPG) and the Nigerian Gas Commercialization Program (which aims to eliminate gas flaring
in the nation by enabling the productive use of flare gas).

While this innovation plan can be considered noble, sustainable and developmental, there are aspects to it that calls to question the possibility of achieving the results which are expected. Let’s take for instance the government aspects of the government parastatal, the Transmission Company of Nigeria (TCN), into which billions of dollars have sunk in budgetary allocations and multilateral debt of over 1.6 trillion Naira. The transmission and distribution grid is broken; Nigeria has endured over 200 grid collapses in nine years and employees of the organization tasked with managing and fixing the grid are willing to deliberately shut down the grid over an industrial dispute. The ETP has also admitted that solving the problems it hopes to tackle will cost money, over $100 billion in investments, which the government does not have, nor can it afford to borrow, as the country is already over 3 trillion Naira in deficit as at last year. It could also require a willingness to break the TCN down and concession or privatize some of its assets which will result in significant job loss- a risk that the government itself is not willing to take.

This is not to say that the goals of the ETP are thoroughly unachievable, but if the innovation is to be an overall success, then tough decisions are to be made and the country will need to attract significant international capital.


Sources:

https://www.energytransition.gov.ng/event/implementing-nigerias-energy-transition-plan/

https://trackingsdg7.esmap.org/

www.premiumtimesng.com 

 

2 Comments.

  • Samuel Adelowokan

    Samuel Adelowokan

    06 January 2023 - 11:09am

    Wow. Interesting. An LPG takeaway for the LPG stakeholders. For one the ETP plan for LPG is till 2030

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