As the global race towards achieving the United Nations carbon-free world set for 2050 intensifies, African countries have ramped up investments to tackle climate change in the continent. OPEOLUWANI AKINTAYO examines the huge investment the continent still has to make to migrate from fossil fuels
Africa’s energy transition topped the agenda at the recently held Nigeria International Energy Summit in Abuja. And the reason is simple – the continent has the youngest population in the world and it is expected to be home to nearly 2.5 billion people by 2050. 80 per cent of them will live in Sub-Saharan Africa, where less than half of the population currently have access to electricity, and just 16 per cent have access to clean cooking fuels and technologies. The continent’s energy transition is a tall order. It has been estimated to cost $100bn annually between 2020 and 2040 for Africa to transit from fossil fuels.
Although the cost is humongous, the consequences of climate change are costlier for the continent. As part of efforts to transit to clean energy, South Africa pledged to achieve with an investment plan to fast-track its transition to renewable energy.
During the COP26 summit in Glasgow, the President, Maj. Gen. Muhammadu Buhari (retd) pledged that Nigeria would cut its carbon emissions and reach net zero by 2060. He stated that gas has a crucial role to play in the country’s energy transition roadmap.
The government also promised to deliver and maintain 5 million new solar connections under a ‘solar power strategy’ as part of the country’s energy transition plans.
It also plans to distribute 10 million cylinders of Petroleum Liquefied Gas into circulation nationwide to increase access to the commodity and dissuade people from unclean energy sources for their cooking.
Some of these initiatives were tied to the Sustainable Energy for All Agenda which Nigeria, alongside 44 other African countries signed on to advance sustainable energy and increase access for all Africans.
However, while the Western countries are clamouring for Africa to accelerate the development of its massive renewable energy sources, experts say Africa must also be given time to transition and allowed to use its natural gas as a transition fuel, just like it is the case in Germany, as well as Europe. “What is acceptable for Germany and Europe must be acceptable for Africa,” they argued.
In his keynote address at the conference, the Vice President, Prof Yemi Osinbanjo, explained that Africa can be much more effective in developing its own agenda and energy mix. He explained that there were two existential crises for Africans: global warming and energy poverty, which results in millions of people being poor.
“There is no question at all for us in this part of the world that both must go simultaneously so that people can have access to power. That is why gas must remain an important transition fuel. We must think in both terms,” he said.
In a session themed ‘Building the Energy for Tomorrow’, the Chief Operating Officer of Oando Energy Resources & Executive Director, Oando PLC, Dr Ainojie Alex Irune, stressed the need for Africa to act fast and act now.
He said argued that for the first time, energy growth and demand outstripped average economic growth across the world, in a time when the energy mix was still being contented.
“Against the backdrop of our youth population, poverty index and intra-African collaboration, we need to get impatient about delivering value and development to our people. The molecule of oil in our ground must be excavated with urgency; I’m talking about oil. We must create the balance sheet that will fund the transition,” he asserted.
The Executive Chairman of the Africa Energy Chamber, NJ Ayuk, explained why the continent must leverage its immediate resources to eliminate energy poverty.
He said, “Africa is a gas continent. I wish we had discovered gas before we discovered oil. We are in Nigeria, Africa’s gas giant, and must continue working towards creating an enabling environment and incentivising participation in the gas value chain.”
He further called on the government to cut the red tape and sign all the pending gas deals that could spur the country to a sustainable energy future.
Experts also advised that although gas had been recognised as a transition fuel, the country must invest in it and leverage it for the development of its industries, kick starting the economy.
Delegates at the summit also agreed that while Africa explored its exponential gas reserves as part of its energy mix, renewables must also be tapped into, arguing that the continent was well-positioned to meet its energy needs through renewable and cleaner sources.
Prof. Osinbajo averred, “African countries have a unique abundance of untapped energy potential: the continent receives 325 days of sunlight per year, exploits less than seven per cent of its hydroelectric potential and no more than two percent of geothermal capacity. As of today, renewables represent only 20 per cent of the electricity generation mix. The reducing cost of renewable energy technologies, including storage, presents a real opportunity for Africa to move towards a clean energy pathway.”
He argued that if anything was going to be done regarding a green energy future, it should start from a low emission base, which is in Africa.
“We have the natural resources to do so. If we focus on our strengths today, we can move quickly. We can build the energy for tomorrow first by recognising the opportunity early and developing all the potential around our natural resources, including natural gas, solar, and biofuels. We must, in particular, leverage our renewable energy potential,” he said.
Dr Irune argued that Africa lacked skill, which was why only two per cent of the total funds available for renewable projects come to the continent.
“We are approximately 30 per cent of the world’s population. Again, another person is defining our future. We have everything it takes to build the energy for tomorrow. We have the oil to create the balance sheet. We have the gas for the transition; we have renewable energy, the sun and all the other renewable sources to compete in that renewable space and develop bankable projects.
“Most importantly, renewable energy is interesting. We have to figure out how to capture and save renewable energy and that requires precious metals, which we also have. So, if you look at the energy value chain, we should not ask for anything from the rest of the world but just be impatient in developing what we have,” he explained.
According to the New Energy Director at Seplat Energy, Effiong Okon, who represented the Chief Executive Officer, Roger Brown, Africa needs access to energy as a five-fold increase in investment is required to reach United Nations Sustainable Development Goals 7 by 2030.
He explained that by 2030, 50 per cent of the global population without access to electricity will be concentrated in seven countries, of which Nigeria is inclusive.
He claimed that for the continent to achieve its energy and climate goals, it must more than double its energy investment this decade, adding that the goal of universal access to modern energy called for an investment of $25bn per year.
He said: “With a future population of more than 2.5 billion, Africa represents a huge investment opportunity across the entire energy sector; and Seplat Energy will continue to develop Nigeria’s gas resources to accelerate the replacement of diesel and biomass and support economic growth through the supply of reliable, low-cost energy.”
Okon explained that about 43 per cent of Africa’s population lack access to electricity, most of them in sub-Saharan Africa with about 970 million Africans without access to clean cooking sources.
He further stated that the continent’s share of global oil and gas production had declined from 2010 figures while energy demand continued to rise.
In the International Energy Agency’s Sustainable Africa Scenario, Africa’s electricity demand increases by 75 per cent by 2030. Renewables, mainly solar PV, account for most new capacity additions due to ever declining costs driven by rapid global uptake.
International Energy Agency estimates that the prospects for oil and gas production would depend on the pace of the global energy transition. However, the outlook for natural gas remains resilient compared to oil increasing in the near term to 2030.
Africa has the world’s lowest levels of per capita use of modern energy and with projected population and income growth, demand for energy is expected to expand by a third between 2020 and 2030.
Calls for partnerships
The Federal Government called for private-public sector partnerships on rapid industrialisation as the country races towards reaching zero emission by 2060.
Osinbajo at Nigeria International Energy Summit said the effect of partnership between the government and private sector in putting structures in place for speedy economic development cannot be overemphasised. “Nigeria needs rapid industrialisation to lift our people out of energy poverty, which results in real poverty as the country prepares for the energy transition.
He argued that Nigeria and Africa were crucial to delivering sustainable energy of the future, urging stakeholders in the oil and gas sector to form alliances with the government to deliver gas, and other cleaner energy sources to the world.
“Nigeria must think in the line of energy transition and end poverty. Gas is the energy of the future and the only clean energy that we have. We can’t do without gas and other clean energy,” he said.
According to the Vice President, Africa should not be seen as the victim in the global drive towards transition energy, adding that the continent will continue to push towards growing its natural resources, which include gas, solar, biofuels and other cleaner energy sources.
He listed critical cleaner energy projects already being embarked upon by the government, including the already signed $50m carbon market initiative.
He urged the private sector to have its energy transition plan and to align it with that of the Federal Government.
The government, in a bid to deepen gas exploration and utilisation in the country, declared 2020 and beyond as a decade of gas.
In line with its gas pursuit, the National Gas Expansion Programme initiative was developed and has since garnered the support of some industry stakeholders, including a few international energy firms.