Progress to net zero emissions will be delayed to use LPG as a bridge fuel
FIVE FOCUS AREAS
Nigeria’s energy transition plan (ETP) focuses on five sectors responsible for 65% of the nations emissions total
INTERNATIONAL FUNDING
International development banks will be required to help fund Nigeria’s $1.9 trillion transition
KEY QUOTE
In Nigeria, you have so many other issues to look into, not just in energy or climate change but in other areas that also need finance and capacity competing for interest
At the COP26 United Nations Climate Change Conference in Glasgow in 2021, Nigeria pledged to achieve net zero emissions by 2060. President Muhammadu Buhari signed the nation’s Climate Change Act, approved by the National Assembly in October 2021, into law barely a week after the conference. A year later, to further strengthen the country’s apparent commitment to achieving net zero, Nigeria launched its energy transition plan (ETP) in the build-up to the COP27 talks held in Egypt in November 2022. It forms a major pillar in the country’s efforts to reduce emissions, address climate change and build a more sustainable economy. The plan aims to transform the nation’s energy sector from overwhelmingly fossil and biofuel-based to zero-carbon by 2060. The International Renewable Energy Agency (Irena) believes around 60% of Nigeria’s energy demand can be met using renewables by 2050. McKinsey, a US-based market consultancy, supported the Nigerian government in developing the plan, bringing modern energy services to the population and manage the long-term job loss in the nation’s vital oil sector resulting from global decarbonisation. Nigeria wants to position itself as a leader in the African energy transition by promoting a fair, inclusive and equitable decarbonisation pathway in Africa by streamlining existing and new government-related initiatives despite also including gas as a “transitionary fuel”.
ROADBLOCKS AHEAD
Nigeria faces a number of hurdles in the transition to a decarbonised economy but the ETP is a start
KEY SECTORS
The ETP sets a timeline and framework for reducing emissions across five key sectors: industry, power, transport, oil and gas, and cooking. These major sectors are cumulatively responsible for 65% of Nigeria’s greenhouse gas emissions estimated at approximately 275 metric tonnes of CO2-equivalent. Nigeria’s power sector accounts for 27% of this total—primarily from diesel generators. Under its ETP, the government aims to achieve universal access to electricity by replacing these diesel generators with 6.3 gigawatts (GW) of off-grid and 42 GW of grid-connected new capacity by 2030—but this will include so-called “baseload” such as gas generation. Elsewhere, the cooking sector in Nigeria is a significant source of carbon emissions, responsible for 22% of the total, due to the high use of firewood. Around 175 million households lack access to clean cooking energy and the government plans to support a shift to liquified petroleum gas (LPG), which will help somewhat reduce total emissions. The oil and gas sector accounts for 11% at current production levels. Nigeria’s plan highlights a range of decarbonisation activities to achieve a 100% reduction in gas flaring and a 95% reduction of fugitive emissions using carbon capture and storage (CCS) to reduce overall emissions from the sector. Around 16% of the emissions are generated from the industry sector by producing cement, ammonia and industrial heat. Nigeria’s decarbonisation strategy promotes the use of calcined clay instead of clinker and bioenergy with CCS in cement production and substituting green and blue hydrogen for grey hydrogen to produce ammonia. The transport sector is responsible for the final 24% of that emission total. The ETP suggests lowering transportation emissions and achieving 10% biofuel blends by 2030 and 100% electric vehicles by 2060.
MULTIFACETED APPROACH
Despite the goals being set by the ETP, work remains on how to move from targets on paper to reality on the ground. Olumide Fatoki, a renewable energy expert, says it is vital for Nigeria to continue diversifying its energy mix and introduce more innovative renewable energy solutions. However, he believes achieving significant progress in renewable energy adoption requires a simultaneous effort on the regulatory and investment front. “There is a need to address regulatory barriers that hinder the deployment of [renewable energy] technologies, as well as the provision of incentives and financial support to encourage the private sector to invest in renewable energy. There is also a need for robust capacity development programmes. [Support] should also be given to the training and upskilling of personnel involved in [renewables] projects,” says Fatoki. “A collaborative effort is needed to involve the government, the private sector and industry experts to address these issues,” he adds.
KNOWN UNKNOWNS
Fatoki believes achieving carbon neutrality by 2060 is an audacious target that will require a concerted effort. He describes the goals within the ETP as laudable objectives that deserve support from stakeholders—a general direction is helpful for investors—but progress on the details must be made quickly to achieve it. To examine the situation comprehensively, there is a need to establish a better understanding of the situation on the ground to achieve the desired results, Fatoki adds. “Data accuracy and validation is another critical aspect to consider in successfully implementing the ETP. Many of the utilised data in this space is hypothetical and numerous assumptions are made, leading to data quality issues. Addressing this challenge is vital to achieving net zero by 2060,” Fatoki says. There is also the threat of changing political landscape that may dent the country’s energy transition ambitions. “Political risk and delayed implementation due to changes in government pose a significant risk to the plan. While the ETP promises enormous benefits, subsequent governments may prioritise different agendas, leading to a deviation from the plan,” Fatoki adds.
TRANSPORT TARGETS
Nigeria’s ETP aims for 100% electric vehicles by 2060
AMBITIOUS BUT ACHIEVABLE
For Chigozie Nweke-Eze of Integrated Africa Power (IAP), a consultancy, achieving neutrality by 2060 is feasible, but he agrees the country needs to make strategic plans soon in order to hit the target. He says the biggest challenge for Nigeria is likely to be finance and infrastructure development barriers since the plan is anchored on using gas as a transition fuel and resources are finite. There are also other social issues the government is being pressured to solve. “In Nigeria, you have so many other issues to look into, not just in energy or climate change but in other areas that also need finance and capacity competing for interest,” he says. Tengi George-Ikoli from the Natural Resource Government Institute (NRGI), a non-profit organisation, also says the plan is ambitious but achievable if the right policies, investments and international support are provided. George-Ikoli applauds the efforts taken by the government to increase renewable energy use by establishing the Nigeria Electrification Project, renewables policies and the Rural Electrification Agency (REA) which is responsible for energising universities, hospitals and general uptake of renewables across the country. But, the country is still reliant on fossil fuels, investment in new oil projects that will lock in the fossil fuels for decades to come, and a lack of sufficient finance are challenges that will hinder Nigeria’s carbon neutrality aims.
OPPOSING GOALS
Nigeria’s Vice President Yemi Osinbajo said the nation’s energy transition would cost $1.9 trillion up to 2060 to achieve its net zero targets, highlighting the fact that it will entail significant public investment. Nigeria will require investment from overseas, as a result. IAP’s Nweke-Eze says the role of international lenders will be vital to help fund the transition. “The African Development Bank (AFDB) has relaxed its strictness about renewables. The bank’s president made it clear that its approach to energy transition can be flexible because of the peculiarities of African countries,” he says. “The energy transition is important, but the mode, the strategies and the pace should consider the important peculiarities of the countries involved,” Nweke-Eze adds. These “peculiarities” are the contradictory goals of decarbonising its energy system and the need to bring citizens out of fuel poverty and grow the economy—in this case, meaning the use of cheap gas. “We know that there should be energy transition and strategic moves, at the same time we have to face the reality of energy poverty and need for industrialisation,” Nweke-Eze says. “For the energy transition to happen in Nigeria, there has to be industrialisation and tackling energy poverty which poses a threat to achieving sustainable energy for all,” he adds. Fatoki says the huge financial requirements for the plan raise doubts about whether neutrality by 2060 is attainable. He says the government must do much more work to help mobilise the necessary funding. “The success of the ETP also depends on overcoming delays in procurement processes and manufacturing large equipment for deploying various innovations. While some initiatives, such as the Nigerian Energy Support Programme (NESP), are ongoing, we are still far from reaching the required capacity level. Addressing this shortfall will require significant investments of time and resources,” he adds.
DECADE OF GAS
NRGI’s George-Ikoli, meanwhile, notes that Nigeria needs to be realistic and practical about how it intends to transition to renewables, given the level of new capacity that will be required from. She also suggests that the country’s government needs to strategically use its resources in the medium-term—in other words, gas, as stated in the ETP—and provide visibility in the role of gas as part of the country’s energy mix. “Most importantly, [there needs to be] clear and consistent policies, especially disclosing the details of its ‘Decade of Gas’ policy, to understand how and to what extent Nigeria intends to address the infrastructure gaps,” George-Ikoli says. In March 2021, President Buhari announced that the following ten years would be Nigeria’s “Decade of gas” in response to the global demand to move away from oil and to instead maximise its natural gas resources. “We need to understand how the government seeks to encourage and incentivise private sector participation, strengthen the framework for the third party access to gas infrastructure and strengthen the institutional capacity to regulate and oversee gas infrastructure development,” George-Ikoli adds.
TEXT Samuel Ajala IMAGES Joshua Oluwagbemiga, Unsplash & Ibrahim Muhammad, Unsplash