May 25, 2024

Tackle energy poverty as you battle climate change challenges – experts tell FG

Nigeria lost $50bn in 10 years due to uncertainty over Petroleum Industry – Buhar

Solomon Ezeme


Access to energy has been a major challenge in Nigeria – experts in Nigeria and around the world are calling on the Federal Government not to be distracted by the current global pressure to meet net-zero targets.

A nation with an installed capacity to generate 12,522 megawatts (MW) of electricity being able to generate only between 3,000MW and 4,000MW from its thermal and hydropower stations – only a fourth or less than 40 % of its entire installed capacity.

This clearly points to the fact that the nation is significantly poor in terms of energy generation. It has equally affected the quantity of electricity being supplied to its over 200 million population.

According to a statement released by World Bank on February 5, 2021 “85 million Nigerians don’t have access to grid electricity.

“This represents 43% percent of the country’s population and makes Nigeria the country with the largest energy access deficit in the world.

“The lack of reliable power is a significant constraint for citizens and businesses, resulting on annual economic losses estimated at $26.2 billion (₦10.1 trillion) which is equivalent to about 2 percent of GDP”.

Only about 10 % of its households in rural communities are to the national grid. Many of these communities either rely on solar panels to generate electricity for themselves or live without power.

The World Bank 2020 Doing Business report, stated that Nigeria ranks 171 out of 190 countries in getting electricity, and that access to power is seen a major constraint for the private sector.

World Bank Country Director, Shubham Chaudhuri, said: “Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic.

“The operation will help improve the financial viability of the DisCos and increase revenues for the whole Nigerian power sector, which is critical to save scarce fiscal resources and create jobs by increasing the productivity of private and public enterprises.”

The national grid in Nigeria has continuously proven to be unable to sufficiently provide Nigerians with the needed power to live and run their businesses.

In 2020, the Transmission Company of Nigeria (TCN), reported that the national grid had failed 84 times and collapsed partially 43 times, since privatization of the power sector in 2013 by the previous administration.

With this present condition of the grid, the problem of energy poverty in Nigeria calls for a state of emergency – maybe a total reform of its entire power industry, that will unlock more opportunities to deliver power to the masses.

In a chat with Ifeoma Finnih, Oil/Gas & Infrastructure expert at FBNQuest who was also a panelist during the recent Energy Sustainability Conference organized by the Energy Institute Nigeria (EIN), EnergyDay was told that Nigeria and other African nations must not allow the push for climate change worsen the condition of energy access in their various nations.

She said that delivering power to those who are experiencing poor power access or have no access to electricity, should be more of government’s focus than attaining the climate change goals.

She said: “The challenge in the sector is that we have international banks, we have DFIs (Development Finance Institutions), we have some governments who are pulling back too.

“And they are saying ‘we no longer willing to fund fossil fuel projects and maybe some gas projects’, just to see the impact on the environment.

“I think one key point is that there are choices around the move for climate change.

“But do you really want to keep Nigerians in dark without energy at the risk of your climate target. So, Africa needs to basically determine how it wants to achieve its own climate goals.”

She advised the Government to find a possible way of developing and funding its existing power projects, including fossil fuel projects, as this is key to abating the high level of energy poverty in the country.

“Another point is, yes, people are pulling back these funds and withdrawing support. How can we now solve this problem of energy poverty ourselves?

“How can we go to the capital market and find a way to access long-term credit facilities to fund our projects, including fossil fuel projects? That’s the most important thing for now.”

During a virtual discussion (organized by PricewaterhouseCoopers, PwC) monitored by EnergyDay on Thursday, Lead, Energy and Infrastructure Strategy at PwC South Africa, James Mackay, said that government must initiate policies that will help increase investments in energy projects, to tackle energy poverty.

He said: “The cost of addressing energy poverty is much higher.

“There is a downturn in energy production, consumption and export of petroleum products from Africa due to underinvestment.

“As the fault line continue to grow between African countries and the developed economies on energy transition, the continent requires financial, technical, partnership and reform assistance from the developed economy.

“Develop nations must fulfil annual commitment of $100 billion per year must be fulfilled.”

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