With the support of the SEforALL, the Nigerian Government designed the plan to tackle the dual crises of energy poverty and climate change and deliver SDG7 by 2030 and net zero by 2060, while also providing energy for development, industrialization, and economic growth. The ETP details pathways for Contact online >>
With the support of the SEforALL, the Nigerian Government designed the plan to tackle the dual crises of energy poverty and climate change and deliver SDG7 by 2030 and net zero by 2060, while also providing energy for development, industrialization, and economic growth. The ETP details pathways for significant low-carbon development of energy systems across 5 key sectors: Power, Cooking, Transport, Industry, and Oil and Gas.
Since its unveiling, the ETP has been approved by Nigeria''s Federal Executive Council (FEC) and adopted as national policy. There is an Energy Transition Implementation Working Group at the Presidency in Nigeria. SEforALL and the Global Energy Alliance for People and Planet (GEAPP) support the working group through a dedicated secretariat, the Energy Transition Office (ETO).
According to the International Energy Agency, over 140 million people do not have access to energy in Nigeria, about 71% of the country's population. When we talk about energy access, we refer to people's ability to access modern energy services, including electricity, clean cooking facilities, and modern fuels. Energy inaccessibility has significant negative impacts on health, education, and economic development.
Nigeria is the largest economy in Africa, with vast natural resources, including oil and gas, and it''s one of the largest oil producers in the world. As the country''s economy continues to grow rapidly, so does its demand for energy. The Government of Nigeria has set a goal to achieve universal energy access by 2030 and is implementing various policies and initiatives to increase access to clean and affordable energy for its citizens.
However, the energy sector faces several challenges, including insufficient power generation, inadequate infrastructure, and a high level of energy poverty. Significant effort is being made to diversify energy sources, improve the country''s energy infrastructure and address challenges by investing in renewable energy and energy-efficient sources and growing private sector investments.
Nigeria''s energy source is mainly derived from petroleum reserves, natural gas, hydroelectricity and solar. The country remains a top producer of crude oil and natural gas in Africa. Some 45% of Nigeria''s population is actively connected to the energy grid and much of that is concentrated in urban areas. Power sector reforms have identified the need for expansion to rural areas, including through decentralized renewable energy and an increase in energy efficiency, especially in rural areas.
This week in Abuja, the World Economic Forum together with the Renewable Energy & Energy Efficiency Associations (REEEA-A) conducted a Mobilizing Investment for Clean Energy Emerging Economies Initiative Deep Dive roundtable, which brought over 70 stakeholders from the public and private sectors together to discuss the strategic role that renewable energy is playing promoting energy security and just energy transitions in Nigeria, and underscore the need to accelerate investments into this sector.
Four concrete solutions that are catalytic in accelerating financing into Nigeria''s priority clean energy sectors were highlighted in the launch of the paper Mobilizing Investment for Clean Energy Community.
In developing this report, the working group carried out a country context risk analysis that shows Nigeria''s biggest risks in scaling the sector are complications with currency convertibility, financing structures, the availability and affordability of technology supply and technical know-how in the renewable energy sectors. These risks negatively affect the growth of the sector. As such, developing financial and technical assistance solutions are key to stimulating the sector''s growth.
According to the Rural Electrification Agency, scaling rural electrification through distributed solar generation, mini-grids, and off-grid technology alternatives has the potential to generate $9.2 billion in annual market investments for solar mini-grids. This can also save Nigerian households and companies $4.4 billion annually. However, certain barriers persist in the broader adoption of solar generation.
We cannot tell people to adopt renewable energy without educating on the social, economic, and environmental benefits. Africa needs a mind shift and this cannot happen without multistakeholder collaboration. There are major opportunities in green energy, but government must derisk these opportunities to attract investments.
Nigeria is the largest consumer of oil-fired backup generators in Africa, with over 80% of power generation coming from gas reserves. Natural gas thus remains the primary source of power in future short-term plans, despite the shift to other renewable sources. The recent attractiveness of natural gas lies in the low-carbon features that make it relatively "clean" and less expensive in comparison to oil and coal.
Using natural gas as a transitionary fuel with a viable pathway to greener future solutions has potential to foster some $18.3 billion in gross value added to the local economy. This potential, coupled with the global difficulties the gas sector is facing, can create exponential growth in the nation''s domestic value chain. In addition to exporting natural gas to the global market, supporting domestic markets through investments in gas production and local distribution infrastructure is critical to achieving Nigeria''s energy transition goals.
The global renewable energy sector is massive and growing at a fast pace. Africa must do what it takes to leverage these opportunities and close the energy gap to avoid falling into deeper poverty.
Africa possesses substantial natural gas, hydro and solar resources, with the ability to generate significant electric power from existing plants. Despite this capacity, lack of transmission and distribution infrastructure hinders the growth of large and small-scale businesses and has created a mass of unserved households that do not have access to the national grid.
With the Nigerian government implementing several energy policies and programmes over the last decade, the next couple of decades present a unique opportunity for foreign capital providers to enter a market that is abundant in energy resources, has a capable workforce, and which according to the 2022 Nigeria Energy Transition Plan, is enabled by government to foster $1.9 trillion in energy investments by 2060. This acceleration requires in-depth policy coordination and harmonization to streamline existing and new government-related energy transition legislation.
In Nigeria, the Power Sector Reform Bill instated in 2022 enables states, private organizations and individuals to participate in the electricity generation and transmission and distribution sectors. The reform bill was formed to regulate power generation, transmission, and distribution tariffs, supporting the energy access through strengthening large-scale generation capacity and transmission and distribution networks.
The Fostering Effective Energy Transition 2024 report showed that after a decade of progress, the global energy transition has plateaued amid the global energy crisis and geopolitical volatilities.
The World Economic Forum''s Centre for Energy and Materials is driving the transition to a "fit for 2050" energy system. It is a cross-industry platform building new coalitions and delivering insights required for a sustainable, secure and just energy future.
Moreover, Nigeria''s inflation rate increased by 16 per cent in 2022, resulting in low capital availability and restricting the access of developers to financing. The availability to finance capital costs for clean energy investments in dollars is limited and currency fluctuations pose a risk to foreign investors and project developers.
As Nigeria strives to transform its energy sector, the country recognizes the critical need for technical capacity building through accelerator programmes for solar entrepreneurs and developers. Many large and small-scale clean energy projects rely on foreign expertise for technical assistance and financing advice.
Current training is provided by public offices such as the Rural Electrification Agency (REA) and Renewable Energy Association of Nigeria (REAN), and technical assistance is provided by Development Finance Institutions (DFIs) and foundations intermittently. It is key to build this capacity internally and ensure the development of local know-how over the long term.
The solutions highlighted as a result of the Deep Dive address the financing barriers in Nigeria''s clean energy priority areas, and help accelerate the investments needed to support Nigeria''s energy goals.
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