By Modupe Gbadeyanka
A global management consulting firm, Boston Consulting Group (BCG), has advised policymakers and marketers in Nigeria and other parts of the world to make fuel affordable to the people for an effective energy transition.
In its new report entitled An Inflection Point for the Energy Transition, the agency stressed that people must have access to affordable fuel while executing their country’s energy transition plan, especially during this period of economic upheaval and geopolitical uncertainty.
For decades, companies and policymakers have struggled to balance the three goals of ensuring a secure and reliable energy supply, at an affordable cost, with minimal environmental impact. But the redoubling of global ambition on climate change at COP26, followed by Russia’s invasion of Ukraine, makes the challenge even greater, as the prices of energy and other commodities surge across the globe.
“Our commitment to Nigeria’s critical energy transition goals should be unwavering in the face of macroeconomic realities. Urgent actions needed to stay on the course include proper management of gas as an energy transition fuel, prevention of fuel scarcity, introducing energy-efficiency measures and implementing plans aimed at reducing dependency on fossil fuel,” said Oluseun Solanke-Ebhojie, Partner and Associate Director, BCG Nigeria.
BCG stated that some regions could experience a backlash against climate action if end users’ expectations and costs are not managed carefully.
According to BCG, policymakers will continue to rewrite the rules of the game over the next 12 months, and the effect of these policies may endure for decades. Energy security policies can have far-reaching effects. Often, they create constituencies with an incentive to retain or even expand the policies further.
It further said higher costs are forcing governments to make tougher trade-offs between affordability and decarbonization, a situation that often favours fossil fuels in the very near term. In several countries, it is now cheaper to replace natural gas with coal, which has approximately 40% more carbon emissions and contains particulate matter that worsens air quality.
“Investments in other new technologies need to grow substantially if we are to meet environmental and energy security goals. Businesses and households should be deliberate in ensuring energy efficiency.
“The $100 billion funding pledged under COP21 to help developing economies during the energy transition should be tapped to manage the rising costs of fuel. Businesses must also be responsive and flexible in the face of changing regulations,” Solanke-Ebhojie added.
However, it was stated that efforts could be made to reduce the consumption of energy through more-efficient use is often referred to as the “first fuel,” because this approach can reduce use the most and be implemented relatively quickly. It also has a positive cost and climate implications. To that end, the IEA has put out a ten-point plan to reduce oil demand by 2.7 mmb/d within four months, largely by changing consumers’ behaviour.
