FG seeks initial $10b to extend energy access to 90 million Nigerians.
The Federal Government of Nigeria is seeking an initial $10 billion from international funders to kickstart an energy transition plan, which is to extend energy access to 90 million Nigerians with solar panels and a doubling of gas power generation this decade. With this plan, it aims to lift 100 million out of poverty by 2030, bring energy access to the full population, and shift to cleaner energy sources. The plan was published on a purpose-built website and launched by Vice President Yemi Osinbajo during an online event which was supported by a number of non-governmental organizations (NGOs).
This plan is supported by Sustainable Energy for All, the Rockefeller Foundation, and the Global Energy Alliance for People and Planet. It aims to provide electricity to an estimated 90 million people who lack it by the end of the decade while also putting the country on a path to achieve net zero emissions by 2060. To deliver, Nigeria is relying on gas as a transition fuel. The government expects to significantly increase gas consumption during “the decade of gas” as declared by President Muhammadu Buhari.
Gas consumption set to double in the power sector in the 2020s.
Our government estimates the price tag at $410 billion by 2060. The vice president said, “For Africa, the problem of energy poverty is as important as our climate ambition. The current lack of power hurts livelihoods and destroys the dreams of hundreds of millions of young people.” Climate and energy experts welcomed high-level political attention on the issue. Some have criticized the government’s focus on gas, while oil and gas workers have complained that they had not been consulted. Of course, Nigerians who could afford it have been relying on polluting diesel and petrol generators as backup to frequent power outages. The government plans to end this by 2050 by massively expanding solar generation capacity.
By 2060, it would replace all polluting cookstoves with electric or biogas ones and electrify 100 per cent of passenger vehicles. Gas consumption is set to double in the power sector in the 2020s. It will significantly increase in the cooking and industrial sectors before nearly phasing out by 2050. Oil and gas refining capacity will massively expand. Ovigwe Eguegu, a Nigerian policy adviser at the consultancy Development Reimagined, praised the government’s plan. “I think the energy transition agenda that the vice president is championing is rooted in the realities on the ground,” he said.
Gas power stations still rely on fossil fuel.
However, while gas power stations burn cleaner than household diesel generators, they still rely on fossil fuel, which generates greenhouse gas emissions. Carley Reynolds of Climate Analytics told Climate Home that “this is a missed opportunity for more ambitious near-term action.” It “risks Nigeria investing in stranded assets and locking into carbon-intensive infrastructure, when it should be investing in ever-cheaper renewables.” Vice President Yemi Osinbajo said he was seeking an initial $10 billion from other countries to support the plan.
This is along the lines of the package offered to help South Africa pivot away from coal. Coal is largely absent from Nigeria’s energy mix. Vice President Osinbajo departed Abuja on Wednesday, August 31, 2022, for the United States to seek global partnerships and support for Nigeria’s recently inaugurated Energy Transition Plan. Osinbajo is leading Nigeria’s Energy Transition Working Group (ETWG) on the US mission for meetings. The meetings, which starts on September 1, 2022, are to promote the plan and secure global support from the US government, the private sector, and other development partners.
Shifting to cleaner energy would create more jobs.
By 2030, the government anticipates 140,000 jobs in the oil and power sectors to be cut compared with 2020 levels. By 2050, that number would increase to 260,000 including job losses in the gas sector. But shifting to cleaner energy sources would overall create more jobs. It is estimated that 340,000 jobs will be created by 2030 and up to 840,000 by 2050. This will be largely in the power, transport and cooking sector. The general secretary of the Nigeria Union of Petroleum and Natural Gas Workers, Afolabi Olawale, told Climate Home that the union had not been properly engaged in discussions about the transition. He said, “You cannot make a plan without talking to those being impacted. We are finding it difficult to see how the plan will work.” He said the jobs that will be created involved different skills to oil work and no plan has been laid out to retrain those poised to lose their livelihoods.
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