Home commentary IMPACT OF THE GLOBAL ENERGY TRANSITION ON THE NIGERIAN POWER SECTOR; AN...

IMPACT OF THE GLOBAL ENERGY TRANSITION ON THE NIGERIAN POWER SECTOR; AN ANALYSIS b Ismail Khadijat Moromoke

Abstract

The world’s transition to environment friendly energy sources is received with mixed feelings particularly in developing economies, such as Nigeria. Not because they do not recognize the importance of a green world rather, some of the countries lack the technologies that will aid the conversion of the renewable energy resources into power generation and supply while a large number of others depends heavily on oil and gas as their source of revenue. It is against this backdrop that Nigeria as a developing country needs to appreciate the new transition and move towards the same so as to ensure a zero carbon-free world while at the same time considering the peculiarities of its territory.

Introduction

Energy is as important as food and shelter to the lives of mankind on earth. It is used for domestic purposes and industrial activities. It can be derived from renewable and non-renewable energy resources. Renewable energy is derived from natural processes that can be replenished constantly such as solar, wind, ocean, hydropower, biomass, geothermal resources, biofuels and hydrogen. [1] On the other hand, non-renewable energy is lost once it is exhausted.  As much as the global energy transition to renewable energy will improve power generation and accessibility of power supply in Nigeria, it may as well spells doom on the country’s economy if realistic and strategic plans are not taken.

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This is because Nigeria’s economic fortunes are tied to the boom-and-bust cycle of the oil market which the world is now moving away from. It is now pertinent to look into the history of the world energy transformation, the new global energy transition and how it is being adopted by a number of countries, the state of the Nigerian power sector and ways through which the transition will help in improving Nigerian power supply in particular and Nigeria as a country.

Energy around the Globe: The Historical Linkage

Right from the stone age, energy has been an essential resource for human survival. Biomass, which is energy derived from plants and also forms a source of renewable energy today, had been in use in form of wood and timber since primitive human beings began to use energy. The only default in those days was that the energy was obtained in crude way mainly due to the very low level of technology that was available then. With technological advances in coal mining, coal which had higher energy density, was widely used.[2]

The progress of human civilization accelerated the development of coal industry, and coal accounted for the largest share in the primary energy mix in the 1780’s surpassing wood for the first time and this was the first global transition from wood to coal.

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In 1886, Daimler invented the internal combustion engine, stimulating a great increase in the demand for oil and gas as efficient resources and accordingly, the share of oil and gas in primary energy mix grew rapidly more than 50% in 1905. [3] Oil and gas replaced coal as the largest energy in the world recording the second global energy transition-from coal to oil and gas. [4] Following the transition from wood to coal then to oil and gas, the future will see the third major transition from oil and gas to new energy,[5] which is already happening now.

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Transition to Environment-friendly Energy: The Global Inclination

The global energy transition that the world is experiencing today, in a simple term, is the move of energy production and consumption from sources that emit greenhouse gases to other sources that are environment friendly. [6] This is because greenhouse gases that are emitted from the burning of fossil fuels absorb infrared radiation from the sun and prevent it from leaving the atmosphere by reradiating it on the earth surface leading to rise in temperatures. [7]

To make the situation worse, in 2002, the World Health Organization (WHO) estimated that exposure to indoor pollution from the use of fuels for cooking and space heating causes as many as 1.6 million deaths annually throughout the world, which are primarily women and young children. All these and many other reasons such as the non-renewable nature of oil and gas, led to the global inclination towards renewable energy.

To ensure countries around the globe are trending the path to a greener world, the Paris Agreement was made in December 12, 2015 and about 196 countries, including Nigeria, have signed the treaty. In a bid to see to the enforcement of the agreement, The Russia Federation, for instance, which owns one of the largest fossil fuel resources is accelerating to the deployment of solar and wind through auctions to create benefits for employment, science, technology, and energy security for isolated population. [8] Also, Denmark currently generates 30% of its energy from wind turbines, reducing its fossil fuels consumption from 95% in the 1970’s to 65% in the recent years. [9]

As an emerging economy, Turkey is also exploring ways to increase solar and wind share with the urgent need to reduce its energy imports. [10] Kenya rate of access to electricity is ranked highest in East Africa due to the Kenya government planned, determined and shown committed efforts in attracting investments predominantly from renewable energy technologies.[11]

All in all, Power generation is also one of the major purpose of utilization of renewable energy to the extent that in 2014, the total installed capacity of wind power was 51.477 GW and that of solar energy was 177 GW with Europe, Asia-Pacific and North America as the major producing regions of the new energy.[12]

The State of Nigerian Power Sector

It is important to note that electricity was first generated in Nigeria when two generating sets were installed to serve the colony of Lagos. In 1951, the government of Nigeria, through an Act of Parliament, established the Electricity Commission of Nigeria (ECN) to regulate the power supply systems in Nigeria. Subsequently, the Niger Dam Authority (NDA) was established and in 1972, the ECN and NDA were merged to form the Nigeria Electric Power Authority (NEPA). In 2005, after the enactment of the Electric Power Sector Reform Act, NEPA was unbundled into eighteen companies consisting of six  generation companies, eleven distribution companies for the whole thirty-six states of the federation and one transmission company which is owned solely by the government after the privatization of the sector in 2013.[13]

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Moving further, whether due to the privatization of the sector or other immediate factors, the power sector, if not dead, is certainly in a comma.[14] The power sector in Nigeria is seen by many analysts as the key constraint on economic development.[15] While assessing the ease of getting electricity in Nigeria, the World Bank ranked Nigeria 187 of 189 countries.[16] This is so appalling! As at 2011, the power generation capacity in Nigeria is estimated to be around 6,000 Megawatts (MW) with average working capacity of 2,000 MW to provide electricity for over 150 million people but in Finland, the current MW is estimated to be around 36,000 MW providing electricity for 5.5 million people. Imagine!

According to African Development Bank in 2011, the instability of electricity supply is far the most binding constraint to ease of doing business in Nigeria. The lack of reliable power has stifled economic activity and private investment and job creation, which is ultimately what is needed to lift 100 million Nigerians out of poverty.[17] Poor power supply deters foreign investors and it also increases the cost of doing business as factory owners seek alternative means of power by resulting to the use of generators which depends heavily on fossil fuels to operate and the world is advocating against the excessive use of fossil fuels. Nigerians are now at crossroads.

Nigerian Power Sector and the Global Energy Transition: Any Missing Link?

Renewable energy is of such a nature that it is evenly distributed around the globe. This means that no country can monopolize the solar energy nor can any country claim the sole proprietary rights over the wind energy. Renewable energy is for all and every country can exploit the renewables for its power generation.

The first step to proper transition is to align Nigeria’s international obligations with its domestic policies and legislations- the distance between words and actions must be bridged and the institutional capacity to implement raised.[18] This implies that Nigeria cannot just dump fossil fuels in the waste bin to move towards the direction of global energy transition because doing this without deliberate and consistent policies to sustain the power sector, will, without doubt, affect the  economy negatively! Energy transition in Nigeria must be a gradual process if excellent results are to be expected!

Renewable energy has been perceived as a key to economic development and a renewable energy study in 2008, provided that employment from renewable energy technologies was about 2.3 million jobs worldwide, which also has improved health, education, and the environment. [19] Once there is stability and accessibility in power supply through renewables in the country, it will enhance localization of industries and improve the standard of living of Nigerians by encouraging industries and companies to invest in Nigeria.

All that is needed in Nigeria is for the power sector of the country to exploit the solar energy that is much more in abundance in the North and the wind energy in the south to ensure stability in power supply and distribution. It is only when power generation is stable in Nigeria that the distribution companies will be looked into by making them thirty-six (36) in number so that they will facilitate effective distribution of power supplyin all the thirty-six states of the federation.

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In China, despite the socio-economic infrastructural challenges, poor power infrastructure to support the technological sophistication required for the energy transition and lack of supportive market structure, China was able to account for more than half of the global PV capacity in addition of 9467W in 2017.[20] If China could, Nigeria can!

Conclusion and Recommendations

Providing access to modern energy, improving the sustainability of energy supply and reducing the effect of energy systems on climate change are the three important global energy governance which Nigeria should adopt as its work plan towards an effective energy transition regime. If developed countries can do more to support emerging countries such as Nigeria with sophisticated technologies, it will go a long way in assisting the countries on their path to a greener future as no nation can do it alone.

Also, if Nigeria can learn from China on how it was able to succumbed the numerous challenges that are similar to the current situations of things in Nigeria, it will guide Nigeria on the best strategies it can adopt that will suit the country thereby improving its power generation capacity and accessibility of power supply for its citizenry. With all these recommendations put in place, the effectiveness and sustainability of the Nigerian power sector is achievable making the sector relevant in boosting the national economy.

Ismail Khadijat Moromoke, a 300 level Common and Islamic law student of University of Ilorin, can be reachable via email: moromokekhadijat@gmail.com and on mobile: 07014015871


[1] ‘Sources of Energy’https://vikaspedia.in/energy/energy-basics/sources-of-energy accessed 4 March 2022

[2] Caineng Zou, et al, ‘Energy Revolution: From a Fossil Energy Era to a New Energy Era’ https://www.sciencedirect.com/science/article/pii/S2352854016300109 accessed 4 March 2022

[3] Ibid

[4] Ibid

[5] Ibid

[6] Daniel Alaigba, op.cit.

[7] Ibid

[8] Dolf Gielen and Ricardo Gonini, ‘The Role of Renewable Energy in the Global Energy Transformation’ vol.24, 2019 https://www.sciencedirect.com/science/article/pii/S2211467X19300082 accessed 4 March 2022

[9] Daniel Alaigba, op.cit

[10] Dolf Gielen and Ricardo Gonini, op.cit.

[11] Ibid

[12] Caineng Zou et al, op.cit.

[13] Aelex‘The Nigerian Power Sector Guide’ Proshare(31 December 2020) https://www.proshareng.com/news/Power%20&%20Energy/The-Nigerian-Power-Sector-Guide/54982  accessed 3 March 2022

[14] Ediri Ejoh, ‘FIVE YEARS AFTER PRIVATIZATION: Power Sector loses N90 billion; Receives N2.9 ten; Needs N2.4 trn’ Vanguard (Nigeria, 15 September 2018) https://www.vanguardngr.com/2018/09/five-years-after-privatization-power-sector-loses-n90-billion-receives-n2-9trn-needs-n2-4trn/amp/ accessed 5 March 2022

[15] NESP, ‘The Nigerian Energy Sector’ 2nd Ed., 2015, pg.24

[16] Ibid

[17] Who we are, ‘Nigeria to Keep the Light on and Power its Economy’ The World Bank (23 June 2020) https://www.worldbank.org/en/news/press-release/2020/06/23/nigeria-to-keep-the-lights-on-and-power-its-economy  accessed 4 March 2022

[18] Chatham House, ‘Nigeria’s Recovery Means Rethinking Economic Diversification’ https://www.chathamhouse.org/2020/08/nigerias-recovery-means-rethinking-economic-diversification?gclid=CjwKCAiAsYyRBhACEiwAkJFKovFwLJ9JDXAKLs83gAlTUUseY-cMIWuBxv7IDewOzX1NssXNkVEriRoC4VUQAvD_BwE  accessed 5 March 2022

[19] Phebe A.O & Samuel A.S., ‘A Review of Renewable Energy Sources, Sustainability Issues and Climate Change Mitigation’ vol.3 , Issue 1 ,2016

[20] Dolf Gielen and Ricardo Gonini, op.cit.

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