Global $1.7 billion hydrogen fund shows how Nigeria develop clean energy infrastructure
In a world shifting attention towards environmentally cleaner sources of fuel, the world’s largest hydrogen infrastructure solutions fund projected to hit $1.7 billion has presented a system of autarky for Nigeria to develop its clean energy infrastructure.
According to the International Energy Agency (IEA), a lack of infrastructure and inadequate funding have been identified as the biggest barriers to using green hydrogen as an enabler of the energy transition and the decarbonization of the global economy.
To solve these hurdles, French companies TotalEnergies, Air Liquide, and VINCI have announced they are joining other international companies to sponsor the creation of a $1.7 billion hydrogen infrastructure solutions fund.
The fund, which has three French companies as its lead partners, seeks to use clean hydrogen to achieve their 2050 carbon-neutral targets, as well as help fight climate change.
The aim is to help speed up the growth of the clean hydrogen market by investing in projects across the hydrogen value chain. The fund has a target of $1.7 billion with initial commitments by participating companies having reached $924.7 million.
“We believe that clean, renewable hydrogen will play a key role in the energy transition, and TotalEnergies wants to be a pioneer in its mass production,” Patrick Pouyanné, CEO of TotalEnergies, said in a statement.
For a country with proven gas deposits of 206.53 trillion cubic feet, most asset managers say the global hydrogen infrastructure fund can be an escape path for many of Nigeria’s clearer energy projects, many of which are mired in obscurity due to paucity of funds.
They say the fund initiative can provide leeway in activating Nigeria’s hydrogen prowess which will allow the country to strategically focus on its vast natural gas resources and function as a bridge between the dominant fossil fuel of today and the renewable energy of tomorrow.
“Governments need to move faster and more decisively on implementing hydrogen policy measures, particularly around demand, for the world to stand a chance of reaching mid-century net-zero emissions goals,” the International Energy Agency (IEA) said in its Global Hydrogen Review 2021.
According to IEA’s Executive Director Fatih Birol, governments need to take rapid actions to lower the barriers that are holding low-carbon hydrogen back from faster growth, which will be important if the world is to have a chance of reaching net-zero emissions by 2050.
IEA’s report sets out recommendations for stimulating the low-carbon hydrogen economy through carbon pricing, mandates and quotas, and requirements for public procurement. It also notes the need for international cooperation on standards and regulations for low-carbon hydrogen, and the support to develop global markets.
Stimulus and incentives to date had been focused on low-carbon hydrogen production, the IEA said. But more support was needed now to enable greater use in industry and transport, along with the associated infrastructure required for storage and distribution.
“Nigeria needs a national strategy either through the production of hydrogen from fossil fuels as a short-term measure or developing a hydrogen infrastructure or ultimately clean production of hydrogen from renewable energy sources,” Ademola Adegun, a Lagos-based renewable expert said.
One way or another, most experts say Nigeria must face up to a future without oil, which the country can choose through a voluntary transition from a petro-state to a more balanced and productive economy, or through dragging, kicking and screaming, into the post-oil age.
Nigeria is Africa’s largest oil producer, but its oil wealth has been a curse. Rife, corruption and environmental damage have plagued Nigeria’s oil history for decades.