African Focus The Africa Energy Bank: A Boon or Bane for Africa’s Energy Transition? by David Omata July 21, 2024 Published by David Omata Nigeria has recently won the bid to host the Africa Energy Bank (AEB). The bank’s establishment is a collaborative effort by the African Petroleum Producers Organization (APPO) and the African Export-Import Bank (Afreximbank), with the primary aim of tackling shortages in energy funding in Africa. The arrival of the Africa Energy Bank (AEB) is poised to significantly shift the African energy sector. However, the AEB’s approach raises critical questions about its impact on Africa’s energy transition goals. This Nextier’s Pan-African series analyses the AEB’s objectives of concurrently funding fossil fuels and renewable energy and its implications for the global drive to phase out fossil fuels. The energy crisis that Africa is currently experiencing is no longer news, as over 600 million people in the continent lack access to power, and over 900 million lack clean cooking options. The AEB’s initial focus on financing energy projects, including oil and gas ventures, responds to this dire situation to fill the void left by global institutions shying away from fossil fuels due to climate change concerns. This approach offers a lifeline to resource-rich African nations struggling to develop their energy infrastructure. The bank’s potential to unlock these resources and stimulate economic growth is undeniable. However, is this fossil fuel focus aligned with Africa’s long-term energy goals? Questioning the Sustainability Path The AEB’s commitment to a “balanced energy mix” seems reasonable since it intends to address Africa’s social and economic components of sustainability. However, supporting fossil fuels alongside renewables generates conflict because it may not mesh well with the environmental pillar of sustainability. While fossil fuels can provide immediate energy security, they also contribute to climate change, directly contradicting Sustainable Development Goal 7 (SDG 7) and net-zero emission targets. The AEB’s success depends on its ability to negotiate Africa’s interest in achieving energy access with the global interest in energy transition. Will it favour short-term advantages from fossil fuels, slowing the shift to greener energy sources? Or can it serve as a catalyst, investing in renewables while sustainably using fossil fuels to close the present energy gap? The Need for Transparency and Scrutiny Each African member nation is expected to donate at least $83 million to raise about $1.5 billion. The Africa Energy Fund’s (AFE) founding members, Afreximbank and APPO, are expected to provide equivalent cash. The remaining $2 billion is anticipated to be raised from outside sources, perhaps even Middle Eastern sovereign wealth funds. Based on the above funding breakdown, the AEB’s funding structure also demands scrutiny. While African nations contributing signifies ownership, reliance on potential funding from Middle Eastern sovereign wealth funds, often heavily invested in fossil fuels, could influence priorities. Transparency regarding project selection and environmental impact assessments will be crucial to ensure accountability. The Path Forward: A Delicate Balancing Act The AEB presents both opportunities and challenges. To truly benefit Africa, it must strike a delicate balance.• Can it foster investment in renewables while supporting responsible fossil fuel resource utilisation?• Can it implement stringent environmental safeguards and prioritise clean energy development in the long run?• Can it promote regional cooperation and knowledge-sharing to accelerate the adoption of innovative energy solutions? The answers to these questions will determine whether the AEB becomes a catalyst for a just and sustainable energy transition in Africa or a bar. Conclusion Establishing the Africa Energy Bank may put Africa’s energy future under critical scrutiny by global leaders. Will it keep the continent stuck on a fossil fuel-based course, or can it be a bridge to a sustainable future? How well the AEB can innovate and adapt will determine the solution. Even when declared, a “balanced mix” is insufficient. In addition to prudent, time-bound fossil fuel consumption, the bank requires a clear plan that prioritises sustainable energy development. Hence, achieving SDG 7 and climate targets requires transparent project selection processes and environmental evaluations. AuthorOmata David OmakojiTechnical Associate – Nextier Power July 21, 2024 0 comments 0 FacebookTwitterPinterestEmail
African Focus The Electricity Access Gap and its Implications for Human and Economic Wellbeing in Africa by David Omata June 15, 2024 Published by David Omata Clean and affordable electricity is central to modern human development. It provides the necessary infrastructure for health, education, and economic activities. In Africa, however, there remains a significant gap in electricity access, which has profound implications for human well-being and economic growth. This article explores the current state of electricity access in Africa, its impacts on human well-being, and the economic consequences of this gap while suggesting potential solutions to bridge this divide. Click here to download June 15, 2024 0 comments 0 FacebookTwitterPinterestEmail
Connecting The Dots Ethical Mining and Sustainable Solutions by Doose Iortyom June 14, 2024 Published by Doose Iortyom The global shift to green economies is creating a huge demand for minerals like lithium, copper, cobalt, and manganese. These minerals are essential for batteries, solar panels, and other green tech that underpin the transition from fossil fuels to renewables. However, poorly executed mining projects in fragile regions can exacerbate conflicts, risking the transition’s success at the expense of increased suffering and strife. As such, it is crucial to examine the broader implications of the green transition for local communities and critically assess if the sacrifices demanded are ethically acceptable at regional and global levels. This episode features Jabri Ibrahim, Africa Special Programmes Lead, UN, High-Level Climate Champions. He joins us to discuss responsible mining, energy transition and everything in between. June 14, 2024 0 comments 0 FacebookTwitterPinterestEmail
African FocusPower Punch Accelerating Nigeria’s Energy Transition with CNG-Powered Vehicles by David Omata May 17, 2024 Published by David Omata President Bola Tinubu’s recent directive mandating the procurement of compressed natural gas (CNG)- powered vehicles by all government ministries, departments, and agencies is a significant step towards advancing Nigeria’s energy transition agenda. This policy brief by Nextier outlines the implications of this directive for Nigeria’s Decade of Gas initiative and the broader energy transition plan. Background Nigeria’s Decade of Gas initiative, launched in 2021 by President Muhammadu Buhari, was designed to tap the country’s substantial gas reserves to drive economic growth and development. CNG, while not entirely devoid of emissions, emits lower levels of CO2 compared to conventional fuels, positioning it as a transitional element within Nigeria’s energy transition strategy towards achieving net-zero emissions targets. Nigeria has strategically embraced the Decade of Gas initiative as a foundational phase in its journey towards sustainable energy practices. Even though Nigeria is the 9th largest country with natural gas reserves globally, its domestic gas utilization has been underwhelming, with most of the gas directed towards the export market. President Tinubu’s Directive President Tinubu’s directive aligns with the objectives of the Decade of Gas initiative by promoting the domestic use of natural gas. The President’s mandate on procuring CNG-powered vehicles will reduce Nigeria’s reliance on traditional petrol-dependent vehicles and set an example for the private sector and the general populace to follow suit. This move is expected to increase the country’s natural gas demand significantly. Implications for the Decade of Gas Initiative • Increased Domestic Gas Utilization: The mandatory procurement of CNG-powered vehicles will create a substantial new market for natural gas within Nigeria. This increased demand will incentivize further gas exploration, production, and distribution infrastructure investment. • Environmental Benefits: CNG-powered vehicles produce e lower emissions than traditional petrol-dependent cars, contributing to Nigeria’s efforts to combat air pollution and mitigate climate change. This aligns with global trends towards cleaner energy sources and sustainable development. • Economic Growth and Job Creation: The Decade of Gas initiative aims to attract foreign direct investment, generate revenue through royalties and taxes, and create more jobs. The mandatory adoption of CNG-powered vehicles contributes to achieving these goals by stimulating economic activity in the gas sector and related industries. • Energy Security and Cost Reduction: This directive will improve the country’s energy mix and reduce reliance on imported petroleum products. With this, Nigeria can enhance its energy security and mitigate the impact of volatile global oil prices. Additionally, CNG is more cost-effective than petrol, offering potential savings for the government and consumers. Policy Recommendations • Policy Implementation: Not until this recent directive from the President to encourage CNG production did the decade of gas policy receive less attention to its implementation. The presidency and the relevant regulatory agencies should follow up to ensure effective implementation and enforcement of the directive across all government agencies, with clear timelines and targets for transitioning to CNG-powered vehicles. • Infrastructure Development: The federal and sub-national governments need to Invest in expanding CNG refuelling infrastructure to support the growing fleet of CNG vehicles nationwide while creating opportunities for private investors to invest in the project. This includes establishing refuelling stations along major transportation routes and in urban centres. • Public Awareness and Education: A comprehensive public awareness campaign to educate citizens about the benefits of CNG-powered vehicles, dispel myths or misconceptions, and encourage widespread adoption is needed. This should be done through the National Orientation Agency and involve relevant CSOs and NGOs. • Private Sector Engagement: The government should collaborate with private sector stakeholders, including vehicle manufacturers and energy companies, to incentivize the production and adoption of CNG-powered vehicles and support the development of related technologies. Our Conclusion President Tinubu’s directive to mandate the procurement of CNG-powered vehicles represents a significant opportunity to advance Nigeria’s energy transition agenda and realize the objectives of the Decade of Gas initiative. Nigeria can achieve sustainable economic growth, improve environmental quality, enhance energy security, and reduce transportation costs for its citizens if we leverage its abundant natural gas resources. Effective implementation of this policy directive, supported by strategic investments and public-private partnerships, will be critical in realizing these benefits and positioning Nigeria as a leader in the global transition to cleaner energy sources. Click here to download. May 17, 2024 0 comments 0 FacebookTwitterPinterestEmail
African Focus Analysing Wind Energy Projects in New York and Emerging Markets in Africa by David Omata May 17, 2024 Published by David Omata Recent cancellations of major offshore wind projects in New York have dealt a significant blow to the industry. The failure of major offshore wind projects in New York reflects a combination of technical, commercial, and regulatory challenges that have plagued similar ventures, especially in Africa. One significant factor contributing to the cancellation of these projects was the intricate technical and commercial complexities they encountered. Changes in project plans and material modifications introduced uncertainties during negotiations, making it challenging for involved parties to reach final agreements. This mirrors experiences seen in other regions where ambitious renewable energy projects have faltered due to unforeseen technical hurdles and shifting market dynamics. Similarly, the Lake Turkana Wind Power Project in Kenya, one of the largest wind farms in Africa, faced numerous challenges during its development, including delays due to financing issues, logistical challenges in transporting turbines to the remote site, and disputes over land rights with local communities. These challenges resulted in significant delays and cost overruns, highlighting the difficulties involved in large-scale renewable energy projects in Africa. Another critical issue that led to the downfall of the New York projects was the reliance on a complicated supply chain, particularly the unavailability of critical components such as turbines. The cancellation was linked to supply chain investments by General Electric (GE), emphasizing the vulnerability of wind power projects to disruptions in the supply chain. Although numerous initiatives have been aimed at developing local capacities in Africa for designing and constructing wind turbines, these efforts have not yet fully matured, presenting challenges in reducing the continent’s reliance on imported turbines, affecting the entire supply chain. Case studies such as the “Wind Atlas for South Africa (WASA)” project, which aimed to assess wind energy potential and build local expertise in wind resource assessment, demonstrate ongoing efforts to develop local African capacities. Despite such initiatives, many countries still face challenges in achieving self-sufficiency in wind turbine manufacturing. For example, the lack of advanced technical skills and infrastructure has hindered the growth of the local wind energy industry in countries like Nigeria and Kenya. Cost considerations also played a significant role in the failure of the New York projects. The decision not to proceed was influenced by the increased costs associated with using smaller turbines, which would have required more individual turbine locations and higher installation expenses. This economic challenge has been a recurring theme in renewable energy projects worldwide, where developers often grapple with balancing the need for technological advancements with cost-effectiveness. Egypt’s Renewable Energy Feed-in Tariff (FiT) faced challenges related to regulatory uncertainties, grid integration issues, and delays in project approvals, leading to a slower-than-expected uptake of wind power projects. Also, regulatory constraints contributed to the demise of the New York projects. Policies limiting rate increases for consumers constrained negotiations, making it difficult for developers to meet financial targets and secure viable agreements. Similar regulatory hurdles have hindered renewable energy projects in regions like South Africa, where conflicting policies or stringent regulations have impeded progress towards renewable energy targets. Despite the undeniable success of the REIPPPP (Renewable Energy Independent Power Producer Procurement Program), a commonly discussed drawback has been the significant transaction costs borne by participating bidders. These costs encompass all expenses incurred from bid development to the commercial operation date. While competitive tenders for renewable energy projects are generally more intricate and thus more costly for independent power producers (IPPs) than feed-in tariff programs, the REIPPPP placed exceptionally stringent demands on bidders. The cancellation of offshore wind projects in New York has further shown the challenges of renewable energy development and the importance of addressing various challenges holistically. If we learn from past experiences and collaborate effectively, regions can overcome barriers to renewable energy deployment and accelerate the transition towards a sustainable energy future. Omata David OmakojiTechnical Associate – Nextier PowerDomata@thenextier.com May 17, 2024 0 comments 0 FacebookTwitterPinterestEmail
Connecting The Dots Financing Options for Mini-Grid Development in Africa by Kenechukwu Nnaka April 22, 2024 Published by Kenechukwu Nnaka This week, the Connecting the Dots Podcast features Olamide Niyi-Afuye, CEO of the Africa Mini-Grid Developers Association (AMDA). He joins us to discuss Financing Options for Mini-Grid Development in Africa. Sustainable mini-grids have emerged as a practical solution to the electrification challenge. However, financing mini-grids in developing countries is challenging. This conversation provides guidelines and essential recommendations for securing financing mechanisms for mini-grid developments in Africa. April 22, 2024 0 comments 0 FacebookTwitterPinterestEmail
Power Punch The Urgency for Nigeria’s Hydrogen Development Strategy by David Omata March 22, 2024 Published by David Omata Nigeria has made remarkable advancements in integrating hydrogen goals into its national energy strategies. However, these goals are contained in distinct documents in various government offices. Presently, no institution assumes exclusive responsibility for managing all aspects of the country’s green hydrogen energy agenda. Instead, multiple government bodies undertake diverse roles within the energy sector. This highlights the urgent need for Nigeria to develop a comprehensive hydrogen development strategy. The recent synthesis report from the GIZ Nigeria Energy Support Program outlined the roles and obligations of various agencies in Nigeria regarding hydrogen production. This includes entities with explicit hydrogen targets and those expected to have such mandates but currently do not. The report also indicates that the National Energy Policy (NEP), the National Energy Master Plan (NEMP), and the Energy Transition Plan (ETP) included provisions for H2 in Nigeria’s decarbonization strategy. The above situation calls for an urgent need to fill this conspicuous gap of the absence of a unified strategy specifically targeting hydrogen development. As other countries are already embarking on hydrogen strategies, Nigeria risks being left behind unless it swiftly formulates and implements its comprehensive plan for hydrogen utilization. Drawing insights from international experiences, particularly those of Australia, the European Union (EU), Germany, Saudi Arabia, Namibia, and South Africa, Nigeria can leverage the lessons and tailor a strategy that aligns with its unique context and aspirations. Learning from Global Experiences Australia, for instance, emphasizes the production and export of hydrogen while concurrently addressing domestic consumption needs. Australia aims to build cost-competitive production capabilities and stimulate global markets through phased implementation and establishment of hydrogen hubs. Similarly, the EU’s strategy prioritizes investments, research, and international cooperation, setting phased targets for hydrogen deployment while fostering demand through strategic partnerships and financial mechanisms such as the European Hydrogen Bank. Germany was focusing on its robust governance structure and targeted funding programs to support domestic and international hydrogen initiatives. They use mechanisms like the H2Global program, and Germany incentivizes investment to foster market competitiveness. Meanwhile, Saudi Arabia leverages its abundant renewable energy potential to pioneer green hydrogen production, strategically positioning itself in the global hydrogen economy. Namibia and South Africa also leverage the significance of coordinated efforts and strategic planning in realizing their hydrogen ambitions with clear goals, governance frameworks, and funding mechanisms in place. The Imperative for Nigeria’s Hydrogen Strategy Against this backdrop, Nigeria’s absence of a cohesive hydrogen development strategy becomes increasingly glaring. Despite having individual policies touching on energy and sustainability, there is a pressing need for a unified approach that explicitly addresses hydrogen utilization. A comprehensive hydrogen strategy, referred to as “The Hydrogen Document,” would serve as a roadmap to harmonize existing policies, capitalize on Nigeria’s vast renewable energy potential, and position the country as a critical player in the global hydrogen market. Recommendations • Policy Harmonization: The Hydrogen Document would consolidate and align existing energy and sustainability policies incorporating hydrogen elements. This may be done by streamlining efforts and ensuring coherence across sectors. By this, Nigeria can maximize the impact of its initiatives and avoid duplication of efforts. • Stakeholder Engagement: Engaging stakeholders from government, industry, academia, and civil society is paramount. Establishing advisory councils similar to Germany’s National Hydrogen Council would ensure diverse expertise and perspectives are considered in strategy formulation and implementation. • Investment Framework: Like the EU’s European Hydrogen Bank and Germany’s H2Global program, Nigeria should establish mechanisms to incentivize investment in hydrogen projects. Public-private partnerships and innovative financing models can mobilize capital and mitigate investment risks. • Research and Innovation: A robust research and innovation ecosystem is essential for technological advancements and market competitiveness. As demonstrated by Australia and the EU, collaboration with international partners can accelerate knowledge transfer and capacity building. • Capacity Building: Developing a skilled workforce capable of driving Nigeria’s hydrogen agenda is critical. Training programs, knowledge-sharing platforms, and educational partnerships will nurture talent and foster innovation in the hydrogen sector. • International Cooperation: Engaging with global hydrogen initiatives and forging partnerships with leading hydrogen-producing nations will facilitate knowledge exchange, market access, and technology transfer. Conclusion With the existing hydrogen road map and strategies by other countries, Nigeria stands a better chance to draw inspiration from international experiences. With this, the government can chart a path towards a hydrogen-powered future. The formulation and implementation of a comprehensive hydrogen strategy, encapsulated in “The Hydrogen Document,” will harmonize existing policies and catalyze investment, innovation, and socioeconomic growth for the nation and its people. Now is the time for Nigeria to seize the opportunity and embrace the hydrogen revolution. AuthorOmata DavidTechnical Associate- Nextier Power March 22, 2024 0 comments 0 FacebookTwitterPinterestEmail
African Focus Ghana’s Energy Transition Plan: Advancing Clean Cooking Solutions by David Omata March 22, 2024 Published by David Omata In September 2023, the government of Ghana unveiled its Energy Transition Plan (ETP) to achieve zero by 2060, marking a significant stride towards sustainable development. The ETP entails a substantial capital investment, estimated at a bare minimum of USD 550 billion by 2060, representing a USD 140 billion increase compared to business-as-usual (BAU) scenarios. Over 70% of these investments are earmarked for the power and transport sectors, primarily driving a comprehensive shift towards renewable energy sources and reducing carbon emissions. This ambitious initiative is projected to catalyze new economic activities within the energy sector, potentially creating up to 400,000 net new jobs by 2060. Ghana’s ETP outlines six key decarbonization technologies under the Orderly Transition Pathway. A significant portion, approximately 40%, of the required emissions reduction is expected to be achieved through transport electrification. These technologies include electrification and renewables, which involve displacing fossil fuel consumption with electricity sourced from solar, wind, geothermal, and possibly nuclear power, complemented by energy storage solutions. Carbon capture and storage technologies will also be deployed to capture CO2 emissions from industrial processes, while low carbon hydrogen will serve as a greener alternative for industrial and transportation needs. Battery electric mobility aims to replace internal combustion engines with electric batteries across various vehicle types. The plan also emphasizes the adoption of Clean Cooking Technologies to replace traditional biomass fuels with efficient electric biomass cookers and advocates for Negative-Emission Solutions like Bioenergy with Carbon Capture and Storage (BECCS) to mitigate carbon emissions effectively. Ghana is positioned to use this orderly transition pathway to embark on a sustainable path towards a low-carbon future, fostering economic growth while mitigating environmental impact. Advancing Clean Cooking Solutions Less than a year after adopting the ETP, Ghana has taken a significant step in embracing clean cooking solutions in collaboration with international partners and stakeholders to prioritize promoting clean cooking technologies. The recent authorization of the ‘Transformative Cookstove Activity in Rural Ghana’ is a testament to the country’s commitment to advancing clean cooking solutions. Through partnerships with organizations like ACT Group, Envirofit, and the KliK Foundation, Ghana aims to distribute improved cookstoves (ICS) to rural and peri-urban households, significantly reducing smoke and toxic emissions while cutting cooking fuel costs. According to the report by ACT, a leading global provider of market-based sustainability solutions, the authorization of this cookstove activity not only contributes to mitigating greenhouse gas emissions but also aligns with Ghana’s Sustainable Development Goals (SDGs). The proposed distribution of the 180,000 Improved Cookstoves (ICS) will improve the lives of 0.75 million Ghanaian citizens and create local job opportunities; the initiative addresses environmental and socio-economic challenges. Up to 10,000 deaths annually in Ghana are associated with air quality issues; the ICS technology mitigates this by decreasing smoke and toxic emissions in individual households by as much as 80%. Additionally, it trims cooking fuel costs by approximately 60%. Ghana’s readiness to achieve its energy transition plan, particularly in the clean cooking sector, is evident through several critical factors, as discussed below: • Policy Framework: Ghana has developed a comprehensive policy framework supporting clean cooking technologies through regulations, standards, and incentives; the government is promoting modern and low-carbon cooking solutions while addressing affordability and accessibility challenges. • International Cooperation: Ghana’s collaboration with international partners, including Switzerland, demonstrates its commitment to leveraging global expertise and resources to accelerate the adoption of clean cooking solutions. Bilateral agreements, such as the one signed at COP26, provide a legal framework for implementing greenhouse gas mitigation activities and ensuring environmental integrity. • Innovation and Monitoring: Ghana is embracing innovation and technology to enhance the effectiveness of its clean cooking initiatives. Digital monitoring and verification techniques, as exemplified by Envirofit’s state-of-the-art usage and performance monitoring strategy, ensure accountability and transparency in project implementation. • Community Engagement: Ghana recognizes the importance of community engagement and awareness in driving the adoption of clean cooking technologies. The government and its partners empower households to transition to cleaner and more sustainable cooking practices through targeted outreach programs, product demonstrations, and financial incentives. Conclusion Ghana has emerged as a frontrunner among its West African counterparts by taking this huge step to implement Improved Cookstoves (ICS) as part of its Energy Transition Plan to decarbonize the cooking sector. With this strategy, the nation is undoubtedly laying the groundwork for a more promising and sustainable future by meeting its citizens’ energy requirements while reducing environmental impact. AuthorOmata David OmakojiTechnical Associate – Nextier Power March 22, 2024 0 comments 0 FacebookTwitterPinterestEmail
Connecting The Dots Prospects of CNG as an Automotive Fuel In Nigeria by Doose Iortyom February 15, 2024 Published by Doose Iortyom Nigeria’s energy transition and the escalating transportation costs prompt a growing interest in using compressed Natural Gas for alternative fuelling. President Bola Ahmed Tinubu inaugurated the Presidential CNG Initiative (PCNGi) in August 2023 in response to these challenges. This initiative holds a visionary outlook, seeking to harness Nigeria’s abundant natural gas resources. In this episode, our guest is Michael Oluwagbemi, program manager/chief executive officer of the Presidential CNG Initiative. He joins the podcast to discuss the progress in adopting CNG as an alternative fuel and Nigeria’s preparedness for this transformative shift. February 15, 2024 0 comments 0 FacebookTwitterPinterestEmail
Connecting The Dots Progress Outlook: The 2024 Energy Year by Doose Iortyom February 1, 2024 Published by Doose Iortyom The Connecting the Dots Podcast Series is back! For the first episode of the year, our guest is Mr. Sadiq Wanka. He is the Special Adviser to the President of Nigeria on Power Infrastructure. This discussion will explore key sector events from the year 2023, and how these events are shaping Nigeria’s energy sector. Setting the pace for the new year, it is imperative to reflect on 2023, identify gaps, propose directives, and strategize for a successful 2024. February 1, 2024 0 comments 0 FacebookTwitterPinterestEmail
