Legal Informer: Energy Transition in Nigeria
At the Middle East Energy, the leading energy event in the Middle East and Africa (MEA) region, hosted at the Dubai World Trade Center from 7 – 9 March 2023, Nigeria was the subject of a dedicated panel session on the first day of the event. The Panel discussed the opportunity to merge economic development and climate action priorities. Also, Nigeria’s ability to develop its energy infrastructure and partnerships needed to solve the energy transition challenges were discussed. The event also accomplished its goal to guide the region through the energy transition, through strong discussions about the opportunities, challenges and barriers to renewable market growth and implementation.
Nigeria, like most countries of the world, has witnessed the increasing effects of climate change such as desertification in the northern part of the country, floods in the south and pollution in the coastal regions. All of these have had considerable social-economic impacts on the country and this in turn translates to the urgency with which actions must be taken to limit the impacts of climate change.
Notwithstanding the above, Nigeria is also faced with a rapidly increasing population, therefore accelerated development is required to ensure a better standard of living. It is based on these premises that Nigeria’s commitment to carbon neutrality is based. Nigeria’s Energy Transition Plan (ETP) is a plan that is set to make Nigeria meet the net zero target by the year 2060 while also meeting the country’s energy needs.
The primary reason behind energy transition is the need to address global warming, energy transition is the shift from fossil-based energy production and consumption like oil, natural gas and coal to renewable energy sources like wind, solar and hydro. It is the broad shift in technology and behaviour that is needed to replace one source of energy with another. The key drivers of the energy transition are the increasing penetration of renewable energy into the energy supply mix, the onset of electrification and improvement in energy storage. Regulation and commitment to decarbonization have been mixed, but the energy transition will continue to increase in importance as investors prioritize environmental, social and governance (ESG) factors.
To facilitate this transition, the Nigerian government has set a target to achieve 30% renewable energy penetration by 2030. The government is also implementing policies and initiatives to promote the development of renewable energy, such as the National Renewable Energy and Energy Efficiency Policy and the Nigerian Electrification Project. Several renewable energy projects are already underway in Nigeria, including the construction of large-scale solar and wind farms, and the installation of mini-grids and off-grid solutions in rural communities. These initiatives are expected to improve access to clean energy, reduce energy poverty, and create employment opportunities.
The ETP has at its core, various objectives that in the long run will benefit the general public. The ETP also has the foresight to anticipate job loss in the current energy industry and has proposed an effective way of managing the same long-term. The major objective of the plan is to effectively drive out poverty and increase economic growth, also paving way for other African countries by promoting a fair, inclusive and equitable energy transition.
The energy transition is made possible by technological growth and a determined push towards
sustainability, which aims to reduce greenhouse gas emissions through various forms of decarbonisation. Besides, renewable energy sources have proven to be a more cost-effective source of electricity. However, the Energy Transition Plan has not been without its own challenges.