#PowerNigeria: The Role of Government in the Energy Mix

0
91

The 2017 World Environment Day has been celebrated recently with the theme: “Connecting people to Nature”. The United Nations has been able to reiterate the need for a joint effort towards building a sustainable environment. Whilst still raising awareness and action for the protection of the planet, we cannot but draw attention to the persistent energy deficiency in Africa.

An estimated 1.2 billion people – 16% of the global population – do not have access to electricity according to World Economic Outlook 2016, 15 million fewer than reported in the previous year. Many more suffer from supply that is of poor quality and mostly inconsistent. More than 95% of these people are found in Sub-Saharan African countries and Asia, and they are predominantly in rural areas (around 80% of the world total).

On the flip side, European and American continents hardly ever experience power outages. Most of these nations are able to provide adequate energy for their citizens because an average industrialised country has an energy mix. The Nigerian Minister of Power, Works, and Housing in January 2017 revealed that the United Kingdom and the United States of America have at least 25% coal, 30% gas, 20% nuclear, and 20% renewable energy sources, which all make up their energy mix; no wonder these world powers have been able to adequately cater for their energy needs. In the case of Nigeria, there has been strong dependency on gas, to the neglect of other energy sources. Global Legal Insight in the fifth edition of Energy 2017 report that as of July 2016, 85% of total installed power generation capacity in Nigeria was gas-fired (thermal) and 15% hydro-generated. Total generation output was therefore 2,567 MWh/hour; a capacity grossly insufficient to meet the energy needs of its over 187 million inhabitants.

The Federal Ministry of Power, Works, and Housing recently disclosed a proposed energy mix for Nigeria expected to impactful; one which focuses more on maximising all potential energy sources, especially with concentration on renewable energy. With the proposed mix; envisaged to ensure that energy from coal, gas, solar, wind, and hydro will be generated specifically from their most natural zones (for instance, solar from sunlight prolific belts), the country is expected to meet its energy needs. In spite of these ambitious projections, it is important to note that developing energy trajectories is usually complex.

Achieving sufficient and sustainable energy supply requires the participatory effort of several actors. It is however a widely known fact that government plays a very important role in any energy agenda.

Set the tone: Achieving energy sufficiency requires strategic and targeted government policy, regulation, and huge investment. It is the responsibility of the government to set the tone for sustainable and efficient energy across the country. The first step towards leading the way in the energy mix is putting in place clear and implementable policy frameworks and reforms that would guarantee a robust energy base for the country. Unless an energy mix document is released, circulated and widely promoted amongst all stakeholder communities, it would be difficult for other sectors to key into the energy diversification agenda. Moreover, although several energy policy plans and frameworks have been introduced for the development of the energy sector, some have not been approved whilst very few have yielded positive results. For instance, the Renewable Energy Mater Plan (REMP) which articulates the roadmap for integrating renewables in buildings, electricity grids and for off-grid electrical systems is expected to position Nigeria for clean and sufficient energy. The National Renewable Energy and Energy Efficiency Policy (NREEEP) is expected to outline measures for the promotion of renewable energy and energy efficiency. The Rural Electrification Strategy and Implementation Plan (RESIP) is envisioned to provide sufficient electricity to rural dwellers. All these plans, together with the ERSP Act contain ideas that can transform the Nigerian energy sector.  Nevertheless, multiple and overlapping policies/documents only weaken implementation and hamper focus. There is a need for a harmonized/unified and overarching energy plan/policy to drive the proposed Nigerian energy mix – one that can only be designed or supervised by the government.

Besides using effective policies and regulations, energy sufficiency can be achieved through adequate and consistent investments. A shift to renewable energy for instance still remains expensive however; investments in renewable energy technology can fast track the move in Nigeria as it has for many other countries. However, due to the risk profile, capital cost and longer-term horizon of renewable investments, the private sector shies away from it. Yet, present energy shortage will persist unless investments are made in technological development, which can only be led by the government.

Unfortunately, Nigeria has invested little or nothing in research and development in the renewable energy sector as done in many developed countries. One of the reasons China has become a front liner in the energy sector amongst emerging countries is due to its huge investments in research and development of renewable technologies and likewise Brazil. Through partnerships with universities, Brazil has made a great success of its biotechnological industry. Moreover, several other developed countries have continued to maintain energy generation levels by using fossil fuel in a cleaner way; this is due to huge investments in research and development. Nigeria has the human capacity to research and develop its energy mix if only these potentials are utilised and maximised.

Fuel the mood: We earlier noted the reluctance of the private sector to invest in the energy sector especially the renewable energy sector. Nonetheless, the responsibility of promoting active private sector participation lies with the creation of a conducive environment to attract investors. Subsidies and grants can be granted to potential investors using the Swiss model for successful wind energy schemes and building renewable technology for rural electrification of off-grid areas in the Asia-Pacific region. Provision of capital and loans can also be made available to potential investors as was explored in Germany at the beginning of PV installations. Moreover, offering tax exemptions, and fiscal incentives is another strategy as successfully implemented in Denmark via environmental tax exemptions, for biomass expansions and for Greece’s solar thermal water heating systems. Netherlands also provides industries with accelerated depreciation of investment in equipment if they invest in renewable and energy efficiency projects. Furthermore, removal of entry barriers for small investors and simplified licensing procurement processes will also fuel private investors’ interests for investment in sustainable energy. These are just a few of the strategies the Nigerian government and policy makers can employ to in developing the energy mix.

Listen to the buzz: Whilst the Nigerian government has committed to developing its energy mix especially with commitment to the adoption and implementation of the elements of the Paris Climate Agreement and the Sustainable Development Goals, awareness on energy development strategy has been low. The effective engagement with stakeholders is now recognised as a vital part of any successful project. In the last one year, incidences of oil and gas infrastructure vandalisation have continued to constrain gas supply, and caused a sharp decline in power supply. Such occurrences may be replicated with the new energy mix unless the government incorporates stakeholders’ opinions from inception and continues periodic engagement to make a success of the energy sector.

Finally, adequate grassroots awareness about the energy mix is also of high importance. Awareness on the pros of clean energy, protection of energy infrastructure, and opportunities offered by renewable energiy is a way to generate public support, build confidence and widespread acceptance of renewable energy technology, and initiate activities. Providing information to the general public can help mobilise financial resources needed to promote renewable energy projects as well as get the support of the non-governmental sector.

A joint action of the government, the private sector, and the people is the only way to attain sustainable and sufficient energy in Nigeria.

*References are available on: www.sustainableconvos.com

References:

https://guardian.ng/interview/we-have-developed-the-right-energy-mix-for-nigeria-says-fashola/

http://pubs.sciepub.com/rse/4/1/2/

https://www.pressreader.com/nigeria/thisday/20170606/282114931543539

http://theconversation.com/nigeria-needs-investment-to-increase-its-renewable-energy-output-53117

https://iclg.com/practice-areas/oil-and-gas-regulation/oil-and-gas-regulation-2017/nigeria

https://www.globallegalinsights.com/practice-areas/energy/global-legal-insights—energy-5th-ed./nigeria

Leave a Reply