Looking Back 2022: Nigeria’s Energy Transition Plan
Looking Forward 2023: Identify Needed Financial Support for the Energy Transition Plan
Nigeria’s Energy Transition Plan (ETP) was launched in August 2022. This plan chronicles how energy poverty and climate change will be addressed to achieve carbon neutrality by 2060. This is arguably Nigeria’s biggest and most significant climate change event this year. Given the country’s peculiar energy needs, the ETP straddles the responsibility of addressing not only climate change but also creating a roadmap to ensure optimal development for key areas of the economy that are energy dependent. Both the Energy Transition Office and the Energy Transition Implementation working group, made up of the vice president and some ministers in the country, are key stakeholders in the launch of the ETP. Other partners supporting the ETP are the Rockefeller Foundation, Sustainable Energy for All and the Global Energy Alliance for People and Planet.
The ETP aims to reduce Nigeria’s emissions from Power, Cooking, Oil and Gas, Transport, and Industry. It navigates the country’s movement from its major reliance on diesel and petrol generators, adoption of electric vehicles in the passenger car market, wider adoption of the use of Liquefied Petroleum Gas (LPG) for cooking, emissions reduction in cement and ammonia production, and panning for lower fugitive emissions and flaring.
Nigeria proposes that natural gas will be vital to the country’s journey to zero emissions. The push for natural gas is due to the urgent need to increase energy infrastructure, the substantial gas reserves in the country and the need to ensure energy security. The gas will come from Nigeria’s domestic gas reserves.
Nigeria also has plans to transition to renewable energy. It seeks to integrate large-scale renewable energy into its power grid. Examples of its renewable energy plans include: creating a grid integration strategy for utility-scale solar and increasing the overall use of renewable energy, especially solar power.
According to the ETP, the net-zero route will create 840k jobs through the power, cooking and transport sectors by 2060; and an increase in investment opportunities because of the creation and development of clean energy-related industries. In addition to this, gas will be important in the country’s transition, especially in the power and cooking industries. The plan foresees the role of gas in baseload power supply capacity, grid stabilization for the incorporation of large-scale renewable energy and filling the shortfall in clean cooking in Nigeria. Using a baseline measurement of Nigeria’s gas consumption in 2019 which stood at 2.9 trillion cubic feet (tcf), the ETP expects that the country’s consumption will increase by 25% in 2030 and decrease to about 50% of the 2019 value by 2060. The reason for the predicted decrease by 2060 is that there will be decreasing demand and transition activities to renewable energy will also be underway by then.
The ETP is laid out to achieve Nigeria’s climate target. However, financing is crucial to the actualization of the plan. Therefore, focusing on financial support towards different parts of the ETP should be underway to ensure that the required projects kick off within the required timeline. It is expected that $1.9 trillion will support the transition plan by 2060. Financing is required for power transmission and distribution infrastructure, gas expansion, purchasing emissions-free and clean cooking technologies, expanding clean power generation capacity and the use of Carbon Capture and Storage (CCS) in oil refining. Currently, there is an ongoing effort to raise an initial installment of $10 billion. The Energy Transition Implementation working group is involved in this. In relation to financing, the federal government plans to implement policy changes that target bringing in funds and investments of another $10 billion; the government is also enabling the expansion of programmes by $30 billion in the coming years. Successfully rolling out the necessary policies and programmes and raising the initial $10 billion are major highlights to anticipate in 2023.
Learn More References
- Vanguard, “Nigeria’s energy transition plan requires $1.9trn till 2060 – Osinbajo”
This Post was submitted by Climate Scorecard Nigeria Country Manager Oluwatoyin Oladapo