By Adedapo Adesanya
As world leaders converge on Sharm El-Sheikh, Egypt, to discuss climate change in what is regarded as the Conference of Parties 27 (COP 27) summit, one of the critical points that the Nigerian government has hammered on is the energy transition plan. What exactly is this plan, and how will the country attain it?
Understanding the Problem
In Nigeria, desertification in the north, floods in the centre, pollution and erosion on the coast, and the associated socio-economic consequences all allude to the reality and grave impacts of climate change. This is worsened by the country’s rising population as it is expected to lead to the highest rise in population growth by 2050. On the back of this, it is necessary to ensure improved living conditions for millions of Nigerians, and the next couple of decades present a unique opportunity to merge these two priorities; economic development and climate action.
What has the Nigerian Government Done?
At COP26 held in Glasgow, Scotland, President Muhammadu Buhari announced Nigeria’s commitment to carbon neutrality by 2060. His administration has not stopped here; the Climate Change Act 2021 was passed, and Nigeria’s Energy Transition Plan (ETP) was unveiled.
Also, the ETP has been fully approved by the federal government, and an Energy Transition Implementation working group (ETWG) chaired by Vice President Yemi Osinbajo, comprising of several key ministers and supported by an Energy Transition Office (ETO) was established.
Why Energy Transition?
Africa accounts for less than 3 per cent of the world’s energy-related carbon dioxide (CO2) emissions. It has the lowest emissions per capita of any region. In addition, there are still over 580 million people on the continent without reliable energy, and the demand for electricity is expected to continue to increase as populations rise, industrialization ambitions grow, and urbanization continues to fuel the need for more electricity.
Nigeria, the largest economy in Sub-Saharan Africa, is endowed with huge oil, gas, hydro, wind, and solar resources, but constraints in the power sector impact growth and industrialization. With some measures that include tapping into these, Nigeria targets being carbon neutral by 2060.
Key Insights
Nigeria’s net-zero pathway will result in significant net job creation, with up to 340,000 jobs created by 2030 and up to 840,000 jobs created by 2060, driven mainly by the Power, Cooking and Transport sectors.
Nigeria’s energy transition creates significant investment opportunities such as the establishment and expansion of industries related to solar energy, hydrogen, and electric vehicles.
Nigeria is Targeting Net Zero 2060 through Five Sectors
The Nigeria ETP sets out a timeline and framework for the attainment of emissions reduction across 5 key sectors: Power, Cooking, Oil and Gas, Transport and Industry. Within the scope of the ETP, about 65 per cent of Nigeria’s emissions are affected.
In terms of power, Nigeria is seeking to transition away from diesel or power generators and look at the gas- and renewables-backed electrification to take up the bulk of current generation capacity. This will be reflected in sectors such as buildings, industry m, and transportation.
In transportation, Nigeria is seeking to decrease emissions by 97 per cent by encouraging the uptake of electric vehicles, while for cooking, Nigeria is aiming for speedy replacement of traditional firewood, kerosene, charcoal by Liquified Petroleum Gas, electric cookstove, and biogas in rural homes.
For Oil and Gas, it is seeking to decrease emissions by reducing flaring and fugitive emissions while supporting decarbonisation while in the industry, the country is driving decarbonisation efforts in cement and ammonia production as well as a 100 per cent shift to zero-emission fuels for heating.
Cost Implication
The additional cost of the energy transition above usual spending translates to ~$10 billion annually over the coming decades. To kickstart the implementation of the ETP, Nigeria seeks to raise an initial $10 billion support package at COP27.
However, the nation has even greater room for investment. A $23 billion investment opportunity has been identified based on current in-country programmes and projects that are directly related to the just energy transition.
