The North – Nigeria’s “Niger Delta” of Renewable Energy Resources

By

Abubakar Atiku Nuhu-Koko

aanuhukoko@yahoo.com

Friday, 24 August 2007

Geography and geology are not man-made but made by nature. The geography and geology of Nigeria’s Niger Delta region produced for the country large reservoirs of non-renewable hydrocarbon energy resources of oil and gas, which are spatially located in remote points in the region. Conversely, the geography of northern Nigeria is well blessed and endowed with huge proportion of Nigeria’s renewable energy resources. Good examples of these renewable resources include inland hydrology for hydropower generation, sunshine for solar power, wind for wind power and vast landmass suitable for crop production and animal husbandry that can be used as feed-stock for biofuels production. For example, practical experience has shown that given appropriate soil and climate conditions, ethanol is an environmentally sustainable and economically viable energy source that reduces greenhouse (GHG) gas emissions. These renewable energy sources are fairly spatially distributed on the landmass and the atmospheric weather and climate over northern Nigeria’s territorial and atmospheric spread.

Renewable technologies can be deployed to transform them into usable energy and power products and services; when transformed and managed properly they are capable of providing fountains of prosperity. However, when mismanaged, they are equally capable of producing mountains of misery to the society. For example, these sources of energy can be used to produce hydro electricity, solar power, wind power and biofuels. But, these resources are distant from the major southern Nigerian centres of industrial manufacturing concentrations that require the energy and power that can be produced and or generated from them. This means there will be need for networks of transmission, distribution and transportation of the power to be generated from these point sources from the region to the rest of the country.

Therefore, northern Nigeria has the potential of becoming Nigeria’s “Niger Delta” (but minus the violence) of renewable energy sources and by extension, a major source of revenue savings and catalysts for sustainable developmental transformations of Nigeria. Moreover, the development of these renewable energy resources will help rapid development of the rural economies of the region and by extension, the country as a whole. The abundant all-year-round sunshine beaming over, wind blowing across, inland waters flowing over and the vast fertile landmass of the northern plains can be transformed into great energy powerhouse on scale larger than what a nuclear power plant can produce and without all the intractable problems associated with a nuclear power generation!

The transformative processes involved in changing these renewable energy resources to useable energy products and services range from very simple to very complex and from inexpensive to very expensive investments. For example, Solar panels, Wind turbines, and Biofuels refineries are required in these transformative processes of renewable energy resources. Nevertheless, over the coming years, the challenges and interests in the prospects for developing and harnessing these vast renewable energy resources will be phenomenal. For example, there are several reasons driving the race for development of renewable resources globally.

In the advanced industrialised countries, particularly members of the Organisation for Economic Cooperation and Development (OECD) and the Group of Seven most industrially developed nations of the world (which are best knows as G7 nations), the concerns for climate change/global warming and energy security through diversity are the major drivers for interest in renewable energy sources and their development and utilisation. However, the developing and the emerging industrial economies have different reasons for embracing renewable energy resources outside the climate change/global warming considerations. The developing and emerging economies are more concerned with how to pay their energy imports bills and the concern for lack of access to all gamuts of energy sources at affordable prices.

On the global level, the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) recently released its report regarding rapidly rising greenhouse gas emissions around the world. The report, among other things, “found that about $148bn of the $432bn of projected annual investment in the energy generation sector should be channelled to renewables, nuclear energy, hydropower and systems to capture and store carbon dioxide, in order to cut emissions to the desired level. The report further found that industry must invest £36bn a year in energy efficiency by 2030 in order to achieve such a result”.[1] These investments require that both the government and the private sector to steep up their involvements in the renewables sector.

Two developing countries provide good example of “power shift” to renewable energy development worthy of emulation by Nigeria. These are:

1. Taiwan: In Taiwan, Taipower – a major state-owned utility company has mapped out a number of renewable energy programmes and projects. For example, it has planned for power plants based on renewable fuels totalling 3,386 MW installed capacity to be built over the next 10 years.[2] Also, Independent Power Producers are expected to construct 2,587MW, or 70 per cent, of the 3,462MW of planned renewable energy-based electricity generating capacity built from 2005 to 2017.[3] Furthermore, Taipower is planning to construct the remaining 878MW of renewable-based capacity, representing about 30 per cent of the new renewable generating capacity, most being wind power and photovoltaic schemes. Other renewable energy deployment under consideration by the Taiwanese government include such as biofuels, biodiesel, and recycling of waste. Taiwan also has a target of attaining 20 per cent of total electricity generation from renewables by 2020.[4]

2. Brazil is the world’s largest sugar producer and exporter, with an output of almost 300mn tonnes of sugar from 15mn acres of land (less than 0.6 per cent of its landmass[5]). Depending on the level of oil price, about half of this is converted into ethanol, of which 15 per cent is exported, while some 100,000 tonnes of sugar are exported.[6] The ethanol is used to power 40 per cent of Brazil’s passenger vehicles.[7] Brazil and the US together produce about 70 per cent of total world ethanol production (13,489bn gallons in 2006) in roughly equal proportions. While Brazil’s ethanol is sourced from sugarcane, that of the US is sourced predominantly from corn.

The situation in Nigeria is however, different. For example, the government and the private sector in Nigeria fail to take advantage of the enormous abundance of energy resources endowment available within Nigeria’s borders for developmental purposes and external revenue generation. Therefore, we have a paradoxical situation where we have scarcity/poverty of energy products and services in the midst of abundant energy resources; both renewable and non-renewable mix. This should not continue.

Incentives for Renewable Energy Resources Development

Developed countries of the world are now putting emphasis on shifting to alternative sources of fuels and power as a means of reducing their dependency on imported oil and gas and mitigating climate change/global warming. For example, in the US, President Bush and the US Congress are considering greater use of ethanol and mandates for the use of alternative, cleaner fuels over time. Moreover, there were also demands for reducing subsidies given to oil companies by the US executive branch, including the repeal of income-tax relief, and for increased regulatory control of oil and gas drilling.

Thus, subsidies have become major policy instruments oiling the shift to renewable energy development and consumption in most of the advanced industrial economies. These incentives range from direct financial subsidies and guarantees to non-financial supports and guarantees. For example, one major policy driver in favour of the renewables is the European Union’s target of generating 20 per cent of its energy from renewable sources by 2020.[8] The Danish company Vestas Wind System[9] for example, is reckon to be the world’s biggest maker of wind turbines by having 28 per cent share of the global market for wind turbines in 2006. The firm was able to raise its profits by threefold in second quarter of 2007 and would be spending €400m expanding its production capacity this year all as a result of the renewable energy sources provision of the EU.[10]

In most of the countries that have incorporated and mainstreamed renewable energy sources in their energy mix, the governments of those countries made provisions for adequate public intervention arrangements in order to promote the development and utilisation of renewable energy products and services. Here are some examples of these renewable energy packages of incentives:

United Kingdom (UK): At the local authority level, one of the few genuine drivers of renewable energy technologies is the local authority policy that is called “Merton rule,” which is named after the London borough that established it in 2003. Basically what the “Merton rule” requires is that, any new building must reduce its carbon emission by 10 per cent through the use of renewables. At the national level however, the UK government is encouraging energy companies to use a wide range of technologies for new power generation, including renewables such as wind and biomass, “clean coal” stations, which capture and their carbon dioxide emissions, and nuclear power.[11]

Moreover, there is a national concern that since 2004 the UK has been a net importer of gas and by 2020 it could be importing 80 per cent of its needs. Therefore, the UK government energy policy has a Renewables Obligation (RO) legislation in its statutes that stipulates that, by 2010, 10.4 per cent of total sales of electricity must be from renewable sources, rising to 15.4 per cent by 2015.[12] The UK government therefore tweaked its £500m ($1billion) annual subsidy for renewable energy.

The European Union (EU): Member states of the EU are required to generate one-fifth of their power from renewables by 2020.[13] This will only require a mere 15 per cent of European arable land, which equates to about 9 per cent of farmlands in Europe.[14] In Germany, the government makes its intention to tweak subsidies for renewable energy, which is in the region of US$5.5 billion a year.[15] Germany already generates 13 per cent of its electricity from renewables sources.[16]

United States of America (USA): The House of Representatives approved a new legislation (Renewable Energy Standard – RES) which require all publicly traded utility power companies to generate 15 per cent of their power from clean sources, such as wind-mills and solar panels, by 2020. The RES comes with an approved $16bn tax plan that shifts the government’s focus away from oil and gas to alternative energy such as wind, solar and biomass production at the expense of traditional sources.[17] For example, according to the US Department of energy, America could meet its entire energy needs by covering 1.6 per cent of its land area with solar cells. Therefore, solar will have a very large role to play in the alternative energy mix of most countries in the next coming decade. In January 2007, the US government mandated the use of 35bn gallons of ethanol in the national fuel mix by 2017.[18] The US government provide generous subsidies to ensure that biofuels are profitable.[19]

Nigeria: although Nigeria’s existing energy policy document made copious references to renewable energy resources development, it is deficient in making provision for how the sector can be mainstreamed and be made attractive to local and foreign private investors. For example, in all the advanced industrial countries that have embraced and integrated renewables in their energy supply and consumption mix, adequate incentives have been built in their respective energy policies. Some of the incentives and or government support to private investors in these countries have been mentioned above.

Proposed National Council on Energy/Power

In order to promote investment in harnessing and use of renewable energy resources and investment in renewable resources technologies in our national energy mix, a number of public policy issues need to be addressed by the proposed National Council on Energy/Power. These are as follows:

1. Produce new policy packages for the energy and power sectors that take into consideration both non-renewable and renewable energy sources. The policy packages should also have the following timescales: short, medium and long term components;

2. The new policy packages should be matched with strategic master plans/paths that also reflect the following national needs: self-sufficiency, quality of service, security of supply, economic efficiency/conservation, accessibility and fair pricing among others. These plans should also be anchored on the following timescales: short, medium and long terms;

3. Each of these timescales (i.e. short, medium and long term) should identify potential policy measures/incentives for inclusion in the policy packages and paths for the achieving the nation’s energy and power needs;

4. Set targets for achieving the needs identified and the extent to which each of the policy measures might contribute to the types of policy targets (e.g. energy/power self sufficiency, accessibility, fair prices, conservation/economic efficiency, regional industrial development, food security, poverty alleviation, environmental protection/climate change mitigation, biodiversity, land rights etc) within each of the three timescales;

5. Policy orientation of each measure (i.e. market-oriented policies, regulated-oriented policies, lifestyle-oriented policies etc);

6. Sectoral governance – institutional/organisational,  management and regulatory arrangements;

7. Implementation, monitoring and evaluation strategies;

8. Survey and mapping of suitable locations for providing solar panels/farms, wind turbines farms, micro-hydro power stations and biofuels feed stock farms, etc

9. Institutional and human resources capacities building and

10. Availability of short, medium and long term funds from both the public and private sectors (local and foreign) respectively and in partnership.

All of the above cannot be put in place effectively unless the existing problems associated with the following issues are tackled:

1. Availability of accurate, reliable and timely data and information on all facets of energy and power demand and supply: production, generation, transmission, distribution, market structure etc;

2. Availability of these data and information in forms that are: easily accessible in print and electronic formats and in textual and graphical (maps, tables, charts etc) forms.

At the moment, energy and power data and information in Nigeria are scanty, incomplete and unreliable. These situations need to be changed. For example, the existing Energy Commission of Nigeria (ECN) should be made to host a National energy and power Data Centre, while the Petroleum Technology Development Fund (PTDF) can be restructured and changed into a Trust Fund to provide multi-sector (i.e., energy, power, solid minerals and telecoms) institutional and human resources capacity building, research and development funding for these sectors. The new agency being proposed here, can act as the focus of Nigeria’s funding for institutional and capacity building and research and development for these vital sectors of the national economy. Bringing together a common pool of government and industry funds, the proposed agency will aim to establish Nigeria’s institutional and human resources capacities for rapid and sustainable development of these vital sectors of the national economy.

The UK government has something similar to what is being proposed here. It is establishing an Energy Technologies Institute (ETI), which aim is to use public and private funds to establish Britain “as a world leader in non-nuclear, clean energy development, and bridging the gap between research and the market place.”[20] The British government has pledged £500m over a minimum of 10-year lifetime to the ETI, to match private-sector partners.[21] Similarly, the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) has found that investment of between $36bn and $45bn a year would be needed on research and development into new technologies for the development of renewable energy systems.[22] Therefore, the proposed National Council on Energy/Power should give consideration to this proposition regarding restructuring of the existing PTDF and the ECN in order to play significant roles in the Presidential emergency on energy and power sectors initiative when it takes off.

In conclusion, the national energy/power council being proposed by President Yar Adua should be guided by the fact that the spatial structure of production and consumption of energy and power in Nigeria is influenced by a large number of factors whose interrelationships are very intricate and more often than not, very difficult to understand. Therefore, there is the need for a deep and comprehensive “Power Shift” and rethinking toward renewable energy and power resources development, production and consumption policies. This should be anchored on security of supply and prosperity issues among others. Furthermore, the geopolitics of energy and power resources development, production and consumption should take the issues outlined above into consideration at all times. The northern Nigerian landscape and atmospheric space over it provide the golden opportunity for Nigeria to leap-frog development of a comprehensive and integrated national energy and power policies and master plans that will place Nigeria among the 20 most developed countries of the world by the year 2020. However, for this to come to fruition, President Yar Adua’s Economic Management Team (EMT) should equally produce a dynamic Economic Stimulus Package to make the process holistic and sustainable.