At the just-concluded COP-27 in Egypt, the Minister of the Environment Mohammed Abdullahi made a passionate appeal to the G7 countries to include Nigeria in a climate partnership list for the co-creation of a just energy transition partnership (JETP), as the country seeks to financing to hit its net zero by 2060 target.
Speaking at the UN climate conference in Sharm el-Sheikh, Abdullahi reiterated that to meet its emissions reductions targets, Nigeria needed “significant resources” to implement its energy transition plan (ETP) unveiled last year.
The plan intends to reduce greenhouse gas (GHG) emissions from the power, cooking, oil and gas as well as transport and industry sectors, accounting for 65 per cent of the country’s total emissions.
According to its own calculations, Nigeria would need an additional total of $410billion, or around $10billion in annual spending, in order to meet the 2060 net zero target, funds the country seeks to secure at the COP-27 summit.
Most of the funds will be needed to transform the power sector, driven by costs to reach about 220GW of solar, biomass and hydro generation capacity, 90GW of storage capacity and 34GW of hydrogen systems.
At the same time, the country’s ETP puts an important transitional role on gas use in domestic sectors such as power generation, grid stabilisation for the integration of renewables and for cooking purposes. The plan predicts gas production expansion costs between 2020-2030s to reach around $4bn, when it also expects domestic demand to rise by 25pc above 2019 levels.
Domestic demand will decline after 2030 but further estimates show that export demand will remain significant until 2050, which has made the “commercialisation” of gas a priority for the government, according to its ETP.
Nigeria’s call for a G7 partnership comes after Indonesia agreed a JETP plan for $10billion with the US and Japan, to help the country bring forward its carbon reduction targets by largely phasing out its dependence on coal.
South Africa signed a similar agreement with Germany and France last year to help fund its energy transition and phase out coal-fired power generation, although the country warned this week that most of the funding is made of loans.
The call was however reinforced when the African Development Bank (AfDB) Group, voted its support in the incorporation of natural gas as a necessary component for Africa to supplement its renewable energy sources.
President of the Bank, Dr. Akinwunmi Adesina, gave the support in an interview conducted outside of the COP 27 conference in Egypt.
He contends that the provision of adequate energy requires the use of natural gas, said Dr. Adesina,“Africa must have natural gas to complement its renewable energy. Even if Africa were to triple its production of natural gas from current levels, its contribution to global emissions would only rise by 0.67 per cent.
“Natural gas is needed to balance out the electricity supply given the intermittent nature of renewables. We must recognise the special nature of Africa. Africa has the highest level of energy poverty in the world.
“My interest is how Africa uses natural gas as part of its energy mix to provide electricity for 600 million people today that don’t have access to electricity.”
The use of natural gas in Africa’s energy mix to provide electricity for the 600 million people who do not currently have access to it piques my interest.
He continued by saying that using gas to supplement renewable energy sources shouldn’t be punished in Africa.
African nations can use their natural gas resources for domestic needs as well as to supply the European Union with energy, which is in short supply as a result of the effects of the Russia-Ukraine war, which started in Q1 of 2002.
A pragmatic Path to Net Zero is the name of a whitepaper that the Africa Finance Corporation (AFC) recently published on the road map for Africa’s development. In order to support industrialisation, the white paper asserts that Africa must take advantage of its natural gas reserves, which it has in abundance.
It’s interesting that the European Commission supports this viewpoint given that it recently designated natural gas as a green energy source and an essential transition fuel on the road to decarbonisation.
The AFC whitepaper also stated that using natural gas for industrial purposes is feasible without significantly increasing global carbon emissions. African countries can increase their investments in renewable energy to complete the transition, given that industrialisation is necessary for the continent to guarantee job creation and economic growth.
Several companies with headquarters in the European Union (EU) have obtained additional liquefied natural gas (LNG) supplies through tenders and short-term LNG contracts, according to the International Energy Agency’s (IEA) natural gas market report for Q4/2022.
Along with the unprecedented LNG inflow, EU member states have begun to diversify their imports from pipeline suppliers outside of Russia. In comparison to its five-year average, the European Union set a voluntary reduction target for its gas demand between 1 August 2022 and 31 March 2023 of 15 per cent.
According to the Organization of Petroleum Exporting Countries’ (OPEC) October 2022 World Oil Outlook, natural gas will overtake coal as the second-largest fuel in the world’s energy mix by 2030.
The outlook predicts that the demand for gas will rise by 19.6 million barrels of oil equivalent per day (mboe/d) to 56.3 mboe/d in 2045, driven by demand across all industries.
According to the outlook, natural gas will eventually take the place of coal and conventional biomass as the fuel of choice, replacing them in the coming years.
Similarly, the Gas Exporting Countries Forum (GECF) secretary-general Mohamed Hamel, has canvassed for more financing to facilitate Africa’s access to its vast resources of natural gas.
He made the call at the COP-27 UN climate conference, where he further explained that the fuel is “the energy for sustainable development.”
A large part of the African continent’s population is lacking access to electricity and “clean” cooking Hamel said which could be improved by employing natural gas for power generation alongside renewables.
Around 600million people in Africa do not have actress to electricity. Hamel added that access to natural gas resources could ensure the continents’ food security, thanks to its use for fertiliser production.
African countries at COP-27 have repeatedly called for more financing, in the form of grants or concessional loans, to fund their energy transition, with some saying including Nigeria that some of it should go to helping develop gas resources.
Some countries in Africa have also said that they should be allowed to use their oil and gas resources ‘responsibly’ to develop their economies, while developed countries are pushing for stronger global emissions commitments.
Several EU member states are meeting at conference to discuss the progress and the role of a managed phase-out of oil and gas production for the energy transition. But countries and observers at COP-27 keep on pointing out at the discrepancy between the EU’s calls to speed up the energy transition, and the bloc’s dash for coal and gas, resulting from Russia’s war in Ukraine.
European Commission executive vice-president Frans Timmermans also pointed out that gas can play a transition role in Africa. He said yesterday that he was not asking African countries not to invest in fossil fuels, but pointed at the risk of ending up with stranded fossil fuel assets when developed fossil fuel resources end up not being burned.
“If you are going to invest in oil, you will probably be left with stranded assets, natural gas is a different situation especially if you combine that with infrastructure that it pre-fitted to carry other gases with other densities such as green hydrogen or green ammonia,” he added.
