African Focus The Electricity Access Gap and its Implications for Human and Economic Wellbeing in Africa by davidomata June 15, 2024 written by davidomata Clean and affordable electricity is central to modern human development. It provides the necessary infrastructure for health, education, and economic activities. In Africa, however, there remains a significant gap in electricity access, which has profound implications for human well-being and economic growth. This article explores the current state of electricity access in Africa, its impacts on human well-being, and the economic consequences of this gap while suggesting potential solutions to bridge this divide. Click here to download June 15, 2024 0 comment 0 FacebookTwitterPinterestEmail
Connecting The Dots Ethical Mining and Sustainable Solutions by doose June 14, 2024 written by doose The global shift to green economies is creating a huge demand for minerals like lithium, copper, cobalt, and manganese. These minerals are essential for batteries, solar panels, and other green tech that underpin the transition from fossil fuels to renewables. However, poorly executed mining projects in fragile regions can exacerbate conflicts, risking the transition’s success at the expense of increased suffering and strife. As such, it is crucial to examine the broader implications of the green transition for local communities and critically assess if the sacrifices demanded are ethically acceptable at regional and global levels. This episode features Jabri Ibrahim, Africa Special Programmes Lead, UN, High-Level Climate Champions. He joins us to discuss responsible mining, energy transition and everything in between. June 14, 2024 0 comment 0 FacebookTwitterPinterestEmail
African FocusPower PunchTrending Insights Accelerating Nigeria’s Energy Transition with CNG-Powered Vehicles by davidomata May 17, 2024 written by davidomata President Bola Tinubu’s recent directive mandating the procurement of compressed natural gas (CNG)- powered vehicles by all government ministries, departments, and agencies is a significant step towards advancing Nigeria’s energy transition agenda. This policy brief by Nextier outlines the implications of this directive for Nigeria’s Decade of Gas initiative and the broader energy transition plan. Background Nigeria’s Decade of Gas initiative, launched in 2021 by President Muhammadu Buhari, was designed to tap the country’s substantial gas reserves to drive economic growth and development. CNG, while not entirely devoid of emissions, emits lower levels of CO2 compared to conventional fuels, positioning it as a transitional element within Nigeria’s energy transition strategy towards achieving net-zero emissions targets. Nigeria has strategically embraced the Decade of Gas initiative as a foundational phase in its journey towards sustainable energy practices. Even though Nigeria is the 9th largest country with natural gas reserves globally, its domestic gas utilization has been underwhelming, with most of the gas directed towards the export market. President Tinubu’s Directive President Tinubu’s directive aligns with the objectives of the Decade of Gas initiative by promoting the domestic use of natural gas. The President’s mandate on procuring CNG-powered vehicles will reduce Nigeria’s reliance on traditional petrol-dependent vehicles and set an example for the private sector and the general populace to follow suit. This move is expected to increase the country’s natural gas demand significantly. Implications for the Decade of Gas Initiative • Increased Domestic Gas Utilization: The mandatory procurement of CNG-powered vehicles will create a substantial new market for natural gas within Nigeria. This increased demand will incentivize further gas exploration, production, and distribution infrastructure investment. • Environmental Benefits: CNG-powered vehicles produce e lower emissions than traditional petrol-dependent cars, contributing to Nigeria’s efforts to combat air pollution and mitigate climate change. This aligns with global trends towards cleaner energy sources and sustainable development. • Economic Growth and Job Creation: The Decade of Gas initiative aims to attract foreign direct investment, generate revenue through royalties and taxes, and create more jobs. The mandatory adoption of CNG-powered vehicles contributes to achieving these goals by stimulating economic activity in the gas sector and related industries. • Energy Security and Cost Reduction: This directive will improve the country’s energy mix and reduce reliance on imported petroleum products. With this, Nigeria can enhance its energy security and mitigate the impact of volatile global oil prices. Additionally, CNG is more cost-effective than petrol, offering potential savings for the government and consumers. Policy Recommendations • Policy Implementation: Not until this recent directive from the President to encourage CNG production did the decade of gas policy receive less attention to its implementation. The presidency and the relevant regulatory agencies should follow up to ensure effective implementation and enforcement of the directive across all government agencies, with clear timelines and targets for transitioning to CNG-powered vehicles. • Infrastructure Development: The federal and sub-national governments need to Invest in expanding CNG refuelling infrastructure to support the growing fleet of CNG vehicles nationwide while creating opportunities for private investors to invest in the project. This includes establishing refuelling stations along major transportation routes and in urban centres. • Public Awareness and Education: A comprehensive public awareness campaign to educate citizens about the benefits of CNG-powered vehicles, dispel myths or misconceptions, and encourage widespread adoption is needed. This should be done through the National Orientation Agency and involve relevant CSOs and NGOs. • Private Sector Engagement: The government should collaborate with private sector stakeholders, including vehicle manufacturers and energy companies, to incentivize the production and adoption of CNG-powered vehicles and support the development of related technologies. Our Conclusion President Tinubu’s directive to mandate the procurement of CNG-powered vehicles represents a significant opportunity to advance Nigeria’s energy transition agenda and realize the objectives of the Decade of Gas initiative. Nigeria can achieve sustainable economic growth, improve environmental quality, enhance energy security, and reduce transportation costs for its citizens if we leverage its abundant natural gas resources. Effective implementation of this policy directive, supported by strategic investments and public-private partnerships, will be critical in realizing these benefits and positioning Nigeria as a leader in the global transition to cleaner energy sources. Click here to download. May 17, 2024 0 comment 0 FacebookTwitterPinterestEmail
African Focus Analysing Wind Energy Projects in New York and Emerging Markets in Africa by davidomata May 17, 2024 written by davidomata Recent cancellations of major offshore wind projects in New York have dealt a significant blow to the industry. The failure of major offshore wind projects in New York reflects a combination of technical, commercial, and regulatory challenges that have plagued similar ventures, especially in Africa. One significant factor contributing to the cancellation of these projects was the intricate technical and commercial complexities they encountered. Changes in project plans and material modifications introduced uncertainties during negotiations, making it challenging for involved parties to reach final agreements. This mirrors experiences seen in other regions where ambitious renewable energy projects have faltered due to unforeseen technical hurdles and shifting market dynamics. Similarly, the Lake Turkana Wind Power Project in Kenya, one of the largest wind farms in Africa, faced numerous challenges during its development, including delays due to financing issues, logistical challenges in transporting turbines to the remote site, and disputes over land rights with local communities. These challenges resulted in significant delays and cost overruns, highlighting the difficulties involved in large-scale renewable energy projects in Africa. Another critical issue that led to the downfall of the New York projects was the reliance on a complicated supply chain, particularly the unavailability of critical components such as turbines. The cancellation was linked to supply chain investments by General Electric (GE), emphasizing the vulnerability of wind power projects to disruptions in the supply chain. Although numerous initiatives have been aimed at developing local capacities in Africa for designing and constructing wind turbines, these efforts have not yet fully matured, presenting challenges in reducing the continent’s reliance on imported turbines, affecting the entire supply chain. Case studies such as the “Wind Atlas for South Africa (WASA)” project, which aimed to assess wind energy potential and build local expertise in wind resource assessment, demonstrate ongoing efforts to develop local African capacities. Despite such initiatives, many countries still face challenges in achieving self-sufficiency in wind turbine manufacturing. For example, the lack of advanced technical skills and infrastructure has hindered the growth of the local wind energy industry in countries like Nigeria and Kenya. Cost considerations also played a significant role in the failure of the New York projects. The decision not to proceed was influenced by the increased costs associated with using smaller turbines, which would have required more individual turbine locations and higher installation expenses. This economic challenge has been a recurring theme in renewable energy projects worldwide, where developers often grapple with balancing the need for technological advancements with cost-effectiveness. Egypt’s Renewable Energy Feed-in Tariff (FiT) faced challenges related to regulatory uncertainties, grid integration issues, and delays in project approvals, leading to a slower-than-expected uptake of wind power projects. Also, regulatory constraints contributed to the demise of the New York projects. Policies limiting rate increases for consumers constrained negotiations, making it difficult for developers to meet financial targets and secure viable agreements. Similar regulatory hurdles have hindered renewable energy projects in regions like South Africa, where conflicting policies or stringent regulations have impeded progress towards renewable energy targets. Despite the undeniable success of the REIPPPP (Renewable Energy Independent Power Producer Procurement Program), a commonly discussed drawback has been the significant transaction costs borne by participating bidders. These costs encompass all expenses incurred from bid development to the commercial operation date. While competitive tenders for renewable energy projects are generally more intricate and thus more costly for independent power producers (IPPs) than feed-in tariff programs, the REIPPPP placed exceptionally stringent demands on bidders. The cancellation of offshore wind projects in New York has further shown the challenges of renewable energy development and the importance of addressing various challenges holistically. If we learn from past experiences and collaborate effectively, regions can overcome barriers to renewable energy deployment and accelerate the transition towards a sustainable energy future. Omata David OmakojiTechnical Associate – Nextier PowerDomata@thenextier.com May 17, 2024 0 comment 0 FacebookTwitterPinterestEmail
Power Punch The Urgency for Nigeria’s Hydrogen Development Strategy by davidomata March 22, 2024 written by davidomata Nigeria has made remarkable advancements in integrating hydrogen goals into its national energy strategies. However, these goals are contained in distinct documents in various government offices. Presently, no institution assumes exclusive responsibility for managing all aspects of the country’s green hydrogen energy agenda. Instead, multiple government bodies undertake diverse roles within the energy sector. This highlights the urgent need for Nigeria to develop a comprehensive hydrogen development strategy. The recent synthesis report from the GIZ Nigeria Energy Support Program outlined the roles and obligations of various agencies in Nigeria regarding hydrogen production. This includes entities with explicit hydrogen targets and those expected to have such mandates but currently do not. The report also indicates that the National Energy Policy (NEP), the National Energy Master Plan (NEMP), and the Energy Transition Plan (ETP) included provisions for H2 in Nigeria’s decarbonization strategy. The above situation calls for an urgent need to fill this conspicuous gap of the absence of a unified strategy specifically targeting hydrogen development. As other countries are already embarking on hydrogen strategies, Nigeria risks being left behind unless it swiftly formulates and implements its comprehensive plan for hydrogen utilization. Drawing insights from international experiences, particularly those of Australia, the European Union (EU), Germany, Saudi Arabia, Namibia, and South Africa, Nigeria can leverage the lessons and tailor a strategy that aligns with its unique context and aspirations. Learning from Global Experiences Australia, for instance, emphasizes the production and export of hydrogen while concurrently addressing domestic consumption needs. Australia aims to build cost-competitive production capabilities and stimulate global markets through phased implementation and establishment of hydrogen hubs. Similarly, the EU’s strategy prioritizes investments, research, and international cooperation, setting phased targets for hydrogen deployment while fostering demand through strategic partnerships and financial mechanisms such as the European Hydrogen Bank. Germany was focusing on its robust governance structure and targeted funding programs to support domestic and international hydrogen initiatives. They use mechanisms like the H2Global program, and Germany incentivizes investment to foster market competitiveness. Meanwhile, Saudi Arabia leverages its abundant renewable energy potential to pioneer green hydrogen production, strategically positioning itself in the global hydrogen economy. Namibia and South Africa also leverage the significance of coordinated efforts and strategic planning in realizing their hydrogen ambitions with clear goals, governance frameworks, and funding mechanisms in place. The Imperative for Nigeria’s Hydrogen Strategy Against this backdrop, Nigeria’s absence of a cohesive hydrogen development strategy becomes increasingly glaring. Despite having individual policies touching on energy and sustainability, there is a pressing need for a unified approach that explicitly addresses hydrogen utilization. A comprehensive hydrogen strategy, referred to as “The Hydrogen Document,” would serve as a roadmap to harmonize existing policies, capitalize on Nigeria’s vast renewable energy potential, and position the country as a critical player in the global hydrogen market. Recommendations • Policy Harmonization: The Hydrogen Document would consolidate and align existing energy and sustainability policies incorporating hydrogen elements. This may be done by streamlining efforts and ensuring coherence across sectors. By this, Nigeria can maximize the impact of its initiatives and avoid duplication of efforts. • Stakeholder Engagement: Engaging stakeholders from government, industry, academia, and civil society is paramount. Establishing advisory councils similar to Germany’s National Hydrogen Council would ensure diverse expertise and perspectives are considered in strategy formulation and implementation. • Investment Framework: Like the EU’s European Hydrogen Bank and Germany’s H2Global program, Nigeria should establish mechanisms to incentivize investment in hydrogen projects. Public-private partnerships and innovative financing models can mobilize capital and mitigate investment risks. • Research and Innovation: A robust research and innovation ecosystem is essential for technological advancements and market competitiveness. As demonstrated by Australia and the EU, collaboration with international partners can accelerate knowledge transfer and capacity building. • Capacity Building: Developing a skilled workforce capable of driving Nigeria’s hydrogen agenda is critical. Training programs, knowledge-sharing platforms, and educational partnerships will nurture talent and foster innovation in the hydrogen sector. • International Cooperation: Engaging with global hydrogen initiatives and forging partnerships with leading hydrogen-producing nations will facilitate knowledge exchange, market access, and technology transfer. Conclusion With the existing hydrogen road map and strategies by other countries, Nigeria stands a better chance to draw inspiration from international experiences. With this, the government can chart a path towards a hydrogen-powered future. The formulation and implementation of a comprehensive hydrogen strategy, encapsulated in “The Hydrogen Document,” will harmonize existing policies and catalyze investment, innovation, and socioeconomic growth for the nation and its people. Now is the time for Nigeria to seize the opportunity and embrace the hydrogen revolution. AuthorOmata DavidTechnical Associate- Nextier Power March 22, 2024 0 comment 0 FacebookTwitterPinterestEmail
Connecting The Dots Enhancing Energy Reliability through Storage Technologies by doose February 29, 2024 written by doose The imperative for clean energy and concerns about the capacity and resilience of energy grids have heightened the interest in energy storage solutions. These technologies are pivotal in bridging the gap between intermittent renewable energy generation and consistent power supply. This episode features Julia Souder, Chief Executive Officer of Long Duration Energy Storage Council. She joins us to discuss emerging technologies in energy storage and how these technologies promote energy reliability and increase the efficiency of grids worldwide. The conversation also suggests policy recommendations for the Nigerian market. February 29, 2024 0 comment 0 FacebookTwitterPinterestEmail
African Focus Assessing the Levelized Cost of Energy for Solar PV Technology in Nigeria, Ghana and the Benin Republic by davidomata February 21, 2024 written by davidomata In the quest for sustainable energy solutions, adopting renewable energy sources like solar photovoltaic (PV) technology has gained prominence globally. In West Africa, countries such as Nigeria, Ghana and the Benin Republic are increasingly looking towards solar PV as a viable option to diversify their energy mix and address pressing energy challenges. One critical metric in evaluating the economic viability of solar PV is the Levelized Cost of Energy (LCOE), which measures the lifetime cost of electricity generation per unit of energy produced. The Levelized Cost of Energy (LCOE) is a metric used to assess the lifetime cost of electricity generation from a particular energy source or technology, such as solar photovoltaic (PV) technology. It represents the average per-unit cost of electricity generated over a power plant or system’s lifetime, considering all relevant fees and financial considerations. LCOE = CAPEX +OPEXYIELD • CAPEX, or capital expenditure, is the initial investment, including the cost of components, labour and additional costs the solar system entails.• OPEX or operating expenditures include utilization, maintenance, taxes, etc.• Yield or energy production is the amount of energy the system harvests during its use. Analysts and investors can calculate the LCOE of solar PV technology by considering these factors and applying appropriate financial modelling techniques. The LCOE provides valuable insights into the economic viability and competitiveness of solar PV projects in various countries; it can also be used to compare energy generation costs with conventional energy sources such as fossil fuels and nuclear power. It helps policymakers, investors, and energy stakeholders make informed decisions regarding energy investments, project financing, and renewable energy deployment strategies. Various factors, including importation and production tax, solar irradiation levels, installation costs, financing mechanisms, policy frameworks, and local market conditions, influence the LCOE of solar PV technology in West African countries. Solar PV’s LCOE Assessment Nigeria, the largest economy in West Africa, possesses abundant solar resources, particularly in the northern regions. However, the high upfront costs of solar PV have hindered the widespread adoption it ought to. Despite these challenges, Nigeria’s LCOE for solar PV in Nigeria has been steadily declining due to technological advancements, economies of scale, and decreasing installation costs. The average LCOE in the Northern region is 0.395 $/kWh, whereas in the Southern part it is 0.453 $/kWh. This is unsurprising, given that the Northern part receives more solar irradiation than the South. With the most recent developments and supportive initiatives like the Bank of Industry’s six billion naira solar energy fund, Nigeria has the potential to significantly reduce its reliance on fossil fuels and harness its solar potential for sustainable energy development. Ghana, similarly, boasts favourable solar irradiation levels, especially in the northern regions. The Ghanaian government has implemented various initiatives to promote solar PV deployment, including net metering policies and feed-in tariffs. Currently, the LCOE for utility-scale solar PV technology in Ghana ranges from a minimum of about $0.04/kWh to a maximum of $0.15/kWh. It is yet to be entirely ascertained if the net metering and feed-in-tariffs have contributed to a declining trend in the LCOE of solar PV to make it more competitive than conventional energy sources. Also, challenges such as grid instability and limited access to financing options persist, necessitating further investment and policy support to unlock the full potential of solar energy in Ghana. Solar PV presents a compelling solution to energy access challenges in smaller economies like the Benin Republic, particularly in rural areas with limited grid connectivity. The country is growing interest in off-grid solar solutions, driven by declining costs of installations and innovative financing models such as pay-as-you-go systems. The LCOE for Benin Republic varies from 0.110 USD/kWh to 0.128 USD/kWh, with an average value of 0.120 USD/kWh. Conclusion and Recommendations Despite the progress in reducing the LCOE of solar PV across West Africa, several barriers remain to the general adoption of the technology. These include limited access to financing, inadequate infrastructure, regulatory uncertainties, and the intermittent nature of solar energy. Addressing these challenges will require coordinated efforts from governments, development partners, and the private sector to drive investment, enhance technical capacity, and create an enabling environment for solar PV deployment. The levelized energy cost for solar PV technology in Nigeria, Ghana and the Benin Republic reflects a promising trajectory towards affordable and sustainable electricity generation. Suppose these countries leverage their abundant solar resources and implement more supportive policies and investments; in that case, they can accelerate the transition towards a renewable energy future, improve energy access, and foster economic development. February 21, 2024 0 comment 0 FacebookTwitterPinterestEmail
Connecting The Dots Prospects of CNG as an Automotive Fuel In Nigeria by doose February 15, 2024 written by doose Nigeria’s energy transition and the escalating transportation costs prompt a growing interest in using compressed Natural Gas for alternative fuelling. President Bola Ahmed Tinubu inaugurated the Presidential CNG Initiative (PCNGi) in August 2023 in response to these challenges. This initiative holds a visionary outlook, seeking to harness Nigeria’s abundant natural gas resources. In this episode, our guest is Michael Oluwagbemi, program manager/chief executive officer of the Presidential CNG Initiative. He joins the podcast to discuss the progress in adopting CNG as an alternative fuel and Nigeria’s preparedness for this transformative shift. February 15, 2024 0 comment 0 FacebookTwitterPinterestEmail
Connecting The Dots Progress Outlook: The 2024 Energy Year by doose February 1, 2024 written by doose The Connecting the Dots Podcast Series is back! For the first episode of the year, our guest is Mr. Sadiq Wanka. He is the Special Adviser to the President of Nigeria on Power Infrastructure. This discussion will explore key sector events from the year 2023, and how these events are shaping Nigeria’s energy sector. Setting the pace for the new year, it is imperative to reflect on 2023, identify gaps, propose directives, and strategize for a successful 2024. February 1, 2024 0 comment 0 FacebookTwitterPinterestEmail
African Focus OPEC Exits: The Delicate Dance of National vs Global Priorities in the Era of Fossil Fuel Phase-Down. by davidomata January 16, 2024 written by davidomata The decisions by Angola and Ecuador to exit OPEC and that of the United Arab Emirates (UAE) to encourage other OPEC members to increase their production have potential implications for the global effort to phase down fossil fuels, as proposed in COP28. Angola’s decision to leave OPEC is primarily driven by its reluctance to accept further production cuts. This move may complicate OPEC’s efforts to collectively reduce oil production to stabilize prices and address concerns related to oversupply. Angola’s emphasis on avoiding production decline and respecting contracts reflects a focus on national economic interests. This approach may challenge the broader global commitment to reduce fossil fuel production and consumption in line with COP28 goals. With Angola no longer bound by OPEC production quotas, there’s a possibility that the country could increase its oil production, contributing to a higher global oil supply and potentially undermining efforts to transition away from fossil fuels. The UAE’s indication to increase oil production aligns with its historical role as a significant energy supplier. If the UAE successfully persuades other OPEC members to follow suit, it could increase global oil supply, which may counter the COP28 objective of phasing down fossil fuels aside from the OPEC regulations on cutting down production to regulate oil prices. The UAE’s emphasis on stability in oil markets suggests prioritizing economic considerations. This stance may challenge the transition towards renewable energy sources if it leads to prolonged dependence on fossil fuels. Ecuador left OPEC in January 2020, citing economic reasons and a need to increase oil production to address its financial challenges. The country faced economic difficulties, and the decision to exit OPEC was part of its strategy to boost oil revenues. This departure emphasized some member countries’ internal economic pressures, influencing their organisational stance. Among all the countries that exited OPEC, it’s only the exit of Qatar from OPEC in 2019 to focus on gas that aligns with the climate goals of transitioning towards cleaner energy sources; the rest gave economic reasons. OPEC’s historical exits and suspensions indicate challenges in achieving a unified approach to global climate goals. Differences in national priorities and economic interests continue to shape the decisions of member countries. Countries’ decisions to leave OPEC offer valuable insights into the challenges and dynamics that may be relevant to the global energy transition plan and the goal of achieving net-zero emissions by 2060. When nations come to a crossroads where emission reduction initiatives overlap with economic prosperity considerations, the precedent set by OPEC exits suggests a predilection toward prioritizing economic prosperity. Key Lessons and Recommendations National Interests vs. Global Commitments: Countries prioritize national economic concerns when making decisions about their energy strategies. Economic considerations, such as the need for revenue and energy security, can sometimes take precedence over global commitments. In the context of the global push for net-zero emissions, countries may prioritize their immediate economic interests, especially if they rely heavily on fossil fuel industries either as a net importer or exporter. Striking a balance between national economic concerns and global environmental goals will be a significant challenge.Economic Pressures and Transition ChallengesEconomic challenges, such as financial pressures and the need for increased revenue, were key factors in some OPEC exits. These economic pressures can influence a country’s energy strategy. Countries pursuing net-zero emissions must address economic challenges associated with the energy transition. Economic incentives, supporting affected industries, and ensuring a just transition for countries reliant on fossil fuels are essential to a successful global energy transition plan. Shifts in Energy DynamicsThe exits from OPEC also reflected broader shifts in global energy dynamics, with countries like Qatar focusing on emerging energy sources like natural gas. As the world works toward net-zero emissions, acknowledging and adapting to changing energy dynamics is crucial. Embracing new technologies, fostering innovation, and leveraging emerging energy sources are vital to a successful transition plan. Unity and Collaboration Challenges OPEC faced challenges maintaining unity and cohesion among member countries with divergent priorities. Internal divisions can hinder the effectiveness of collective efforts. Global efforts toward net-zero emissions require international collaboration. Balancing the interests of different nations and fostering cooperation will be essential to overcome challenges and achieve the shared goal. ConclusionThe experiences of countries leaving OPEC highlight the complexities involved in aligning national interests with global goals. As the world strives for a net-zero future, addressing economic concerns, fostering innovation, and promoting international cooperation will be critical to overcoming the challenges of phasing down fossil fuels and achieving the 2060 net-zero emission target. January 16, 2024 0 comment 0 FacebookTwitterPinterestEmail