• Sunday, February 25, 2024
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Nigeria hopes to tap into $1trn wind energy boom

Global wind energy market to hit 100GW for first time in 2023

After years of dabbling, major international oil companies are finally planning the kind of large-scale investments that would make offshore wind a serious business opening up opportunities for Nigeria’s vast untapped wind potential.

Offshore wind is expected to be a pillar of the energy transition and attract almost $1 trillion over the next decade, with offshore wind capacity jumping tenfold by 2030, from 34 GW in 2020 to 330 GW by 2030, WoodMac said in a report earlier this year.

To take advantage of these opportunities, Shell, BP, Equinor, and TotalEnergies are all betting on developing offshore wind in Europe, the U.S., and Asia and say the sector is a priority area of growth for them.

The majors are looking to boost offshore wind development not only to provide electricity to households but also to electrify offshore oil and gas platforms and produce green hydrogen.

For example, Equinor is studying possible options for building a floating 1-GW offshore wind farm in the Troll area, with the potential start-up in 2027, which could provide much of the electricity needed to run the offshore fields Troll and Oseberg through an onshore connection point.

Read also: Nigeria needs investments, technical innovations to achieve decarbonisation goal- Orji

At the same time, Shell has just announced it will start building Europe’s largest renewable hydrogen plant in the port of Rotterdam.

“Our new cash margin metric – operating cash flow per gigajoule equivalent (GJe) – goes beyond traditional comparisons. And it reveals that offshore wind comes up trumps,” Akif Chaudhry, Principal Analyst, Corporate Research at WoodMac, wrote in an analysis.

Equinor wants to be a global offshore wind energy major and have an installed net capacity of 12-16 GW by 2030, two-thirds of which will be within offshore wind. TotalEnergies has 6GW of offshore wind projects under development and construction, of which 2GW are planned to go into production by 2025.

Overall, Europe’s Big Oil is well positioned to take advantage of the growing offshore wind industry, analysts say.

“After years of managing volatility in oil and gas, the Majors are equipped to get the balance between risk and return right. And they are flush with deep pockets of cash to take advantage of the huge upcoming opportunities,” WoodMac’s Chaudhry said.

In Nigeria, there are great prospects for wind energy utilization from offshore areas like Lagos through Ondo, Delta, Rivers, Bayelsa and Akwa Ibom States to the mountainous terrains of the middle belt and northern fringes which have demonstrated high potential for great wind energy harvest.

Despite the huge potential, wind energy development in Nigerian is still at an infant stage while the few wind energy technologies found in the country are mainly windmills which are used for irrigation water pumping in some rural communities in the northern regions.

There is an opportunity for Nigeria. Rystad Energy estimates that total expenditure in wind energy will hit $810 billion within a decade.