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Nigeria Energy Transition Plan: The Role of Energy Efficiency in Achieving a Carbon-neutral economy by 2060

Sustainable energy transition

By Moses Nasamu

The World Economic Forum recently published its 2022 Energy Transition Index, which came to a conclusion that global energy transition has made steady progress in recent years. Globally, energy transition is regarded as critical to both climate change mitigation efforts and providing secure and affordable energy for all.

Despite this progress, global warming alarms are becoming increasingly loud, and the globe is also confronting an energy crisis, with concerns about energy security, affordability and availability. It is estimated that well over 700 million people across the globe continue to lack access to basic energy requirements as a result.

The situation is particularly dire in countries such as Nigeria, where an estimated 86 million Nigerians lack access to grid electricity, according to a World Bank Energy Report issued in February 2021. This represents 43% of the country’s population, making Nigeria the country with the world’s biggest energy access deficiency.

There has been a lot of discussion in recent weeks regarding the Nigeria Energy Transition Plan, which was unveiled by Nigeria’s Vice President, Professor Yemi Osinbajo, in August 2022. Many energy analysts believe that if adequately funded, the plan may place Nigeria on a path to net-zero emissions by 2060.

Nigeria’s Finance Minister, Zainab Ahmed, has stated that the government will require $1.9 trillion in spending to establish a carbon-neutral economy by 2060.

The government forecasts a net expenditure of around $150 billion on expanding generating capacity and $135 billion on improving transmission and distribution infrastructure.

About 43% of the country’s population lack access to grid electricity, making Nigeria the country with the world’s biggest energy access deficiency.

Energy efficiency

As has been the case for the past 23 years since Nigeria regained democratic sovereignty, successive governments continue to place strong emphasis on expanding power generation, transmission, distribution, and trading capacities while other essential components of the energy value chain such as energy efficiency have been neglected.

Energy efficiency, while not often as visible as supply-side interventions, is a vital component of the transition to a clean and sustainable energy system, and the impact of energy efficiency initiatives can go well beyond energy savings.

While the Nigerian government seeks an initial $100 billion funding for its ambitious energy transition plan, the country’s population continues to grow at an alarming rate of 3.2% annually. Similarly, urbanization is rising, which increases energy demand.

Therefore, any short to medium-term solutions to the energy availability crisis currently plaguing Nigeria should include a strategy that encourages consumers to use less energy.

As a result, energy efficiency should be considered cardinal to Nigeria’s energy transition strategy if it is to achieve its objectives.

The preparedness of Nigerian government stakeholders to commit to improving energy efficiency might be a significant contributor to future economic growth and social development.

Energy demand minimized as a result of efficiency gains can result in lower energy expenditure, greater energy security, and therefore less financing for new energy supply infrastructure.

Energy efficiency has various advantages for emerging economies such as Nigeria. By default, energy that is not used owing to efficiency is carbon-free and energy efficiency helps promote clean energy transition.

Similarly, smart and efficient electricity usage enabled by consumer behavioural and cultural adjustments accelerates power sector decarbonisation and the integration of renewable energy sources into the energy mix.

Power demand

According to the Association of Nigerian Electricity Distributors (ANED), Nigerians spend around N12 trillion per year on self-power generation, largely using fossil fuels to generate approximately 40,000 MW of off-grid electricity. Because of the heterogeneous nature of self-generation and consumption, a considerable percentage of this electricity is wasted.

…smart and efficient electricity usage enabled by consumer behavioural and cultural adjustments accelerates power sector decarbonisation and the integration of renewable energy sources into the energy mix.

The Nigerian government should commit to supporting energy efficiency initiatives through legislation, consumer education, and strategic funding in order to realize its ambitious energy transition aspirations. To ensure the efficacy of energy efficiency programs and initiatives, the government should be prepared to enhance institutional capacity in order to execute, enforce, and evaluate them.

The government should also actively promote collaboration among the larger ecosystem of energy stakeholders, including regulators, operators, policymakers, financiers, academics, consumers and non-governmental organizations. The challenge at hand necessitates widespread stakeholder consensus, and the government should act as an enabler.

Finally, the Nigerian government should seek to create an attractive investment environment for private capital, both domestic and international, to finance energy transition initiatives. Government should also establish strong, binding policy and legal frameworks that can withstand political interference.

The current energy access crisis provides an excellent opportunity for Nigeria to accelerate the advancement of energy efficiency locally and boost its resilience to future energy challenges.

Only by working together will it be feasible to accelerate our common energy transition journey towards 2060 and accomplish the unwavering progress that Nigerians desire and deserve. The hour for action has arrived. The call has been sounded.

. Nasamu is an Electrical Engineer, and Certified Management Consultant, who practices in Lagos.

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