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Seplat’s Energy Summit: Experts highlight benefits of energy transition

To tap into the global gospel of energy transition, Nigeria must play a big brother role for other African countries by setting realistic targets, attracting capital injection and putting appropriate policies to attract global opportunities, stakeholders and experts at the Seplat Energy Summit 2021 have said. For the experts the future of energy transition in Nigeria is positive.

In a friendly and educative discussion on Thursday in Abuja, the nation’s capital, stakeholders at the Seplat Energy Summit discussed how Nigeria can show other African countries how to play a crucial role in solving challenges and providing solutions for the transition to a future sustainable energy system in Africa.

The Special Guest of Honour for the energy summit Yemi Osinbajo, Nigeria’s Vice President who was represented by Minister of State Environment, Sharon Ikeazor said Nigeria energy transition cannot be limited to incremental steps but transformation steps.

Simbi Wabote, Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) said Nigeria’s energy transition cannot happen if Africa continues to have conversations and do nothing to achieve net zero-emission.

In Africa, energy poverty remains a significant concern with over 640 million people lacking access to electricity.

“Africa most especially Nigeria needs capital injection and behavioural changes to achieve energy transition,” Wabote said at the event with the theme “Global Trends in Energy Transition- the African Perspective.”

He noted that 90percent of the Nigerian source of electricity needs to come from renewable energy within the next 30 years.

Read also: Seplat Energy begins supply of power to Oben Cottage Hospital from gas plant

With a population of 200million projected to grow to 330m by 2040, improving access to energy is Nigeria’s transition imperative as only an estimated 57percent of its population have access to electricity, suggesting there is significant potential for growth.

The summit had in attendance ministers, governors, members of national assembly, royal fathers of Seplat Energy’s host communities, leaders of public and private institutions, investors and shareholders groups. Seplat leveraged the energy summit to unveil its new logo.

“Nigeria needs a broader set of policies that must align with energy security, which must foster a smooth energy transition across various levels of energy demands,” Ikeazor said.

She noted that gas will continue to play a critical role in Nigeria’s energy transition which will create lots of opportunities in Nigeria’s energy value chain.

“Over the next decade, every energy segment in Nigeria will be affected by this shift in energy supply and demands,” Ikeazor said.

Nigeria’s Minister of State Petroleum Resources Timipre Sylva said the ministry endorsed Seplat Energy as the flagship company that drives Nigeria’s energy transition.

“Multiple pathways to the energy transition should and must exist in order to ensure that no country is left behind in the process of achieving net-zero by 2050,” Sylva said.

He noted that it’s important to ensure massive efforts towards increasing energy efficiency and productivity by facilitating changes in consumption patterns and lifestyle choices which will expand renewable energy or power supply and directions within and across the country.

The country is blessed with abundant resources, close to major population centres, and has well-proven geology that is being tapped by a long-established industry, supported by good infrastructure and regulatory and fiscal regimes. It has Africa’s largest oil and gas reserves as well as significant potential for solar, hydro-electric and wind power.

“At NCMB we are spearheading the distribution and penetration of LPG in 10 northern states,” Wabote said.

Oscar Onyema, Group Managing Director, Nigerian Exchange Group (NGX Group) Plc noted the $400 billion which Nigeria’s power ministry said will be required over the next 30 years to power its households can come from the capital market. “Nigeria capital market cannot finance Nigeria energy transition alone, we need to innovate ways to raise deep capital financing,” Onyeama added.

He highlighted that there are a lot of opportunities in the global scene Nigeria or Africa can tap into to ease the financial burden of energy transition.

Onyema advised Nigeria and other African countries to create the right policy environments that will attract investments in renewable energy sector

Mike Sangaster, the CEO of TotalEnergies Nigeria raised concern about the capital cost of renewable energy which he claimed is much higher than the capital cost of traditional energy although the recurrent cost of renewable energy is cheaper.

“Financing is one of the major issues that needs to be addressed,” Sangaster said.

Two months ago, TotalEnergies announced a new global renewable energy investment of $60 billion, a portion of the funds will be specifically for Nigeria’s renewable sources of energy.

The French oil and gas giant concluded plans for the financing that will be allocated over a period of 10 years to accelerate the energy transition in Nigeria.

“We have looked for few renewable projects in Nigeria to invest in the last couple of years but we struggle to find a company to invest in,” Sangaster said at the event.

He noted that most of Nigeria’s renewable energy projects need power purchase agreements that are bankable.

“Africa needs more energy which must be clean and net zero fossils not zero fossils,” Sangaster said.

The International Energy Agency (IEA) notes in its Electricity Market Report 2020, says most African countries have vertically integrated utilities with little or no private participation. “This limits grid development and generation to public funds.”

Miguel Azevedo, Citigroup’s head of investment banking for the Middle East and Africa said the gospel of renewable energy will force the development and creation of a democratise system for Nigeria energy sector

“It will allow for a change in the economic and business model of Nigeria’s energy sector,” Azevedo said.

He also noted that energy transition will force the development of a new tax system among African countries which will create systems that will demand more accountability from government officials.

In a bid to fast-track renewable developments and establish an enabling environment for investment, many African countries have implemented renewable supportive policies and regulations.

Specifically, countries such as Morocco with its Law 13-09 providing a legal framework for the development of renewable energy; Egypt’s net-metering scheme to promote distributed solar; and South Africa’s Integrated Resource Plan, have established investor confidence, leading to increased developments.

Participants at the Summit heard from world renowned speakers including Daniel Yergin, the Pulitzer Prize winning author and energy commentator. Dr. Yergin who discussed his new book: ‘The New Map: Energy, Climate, and the Clash of Nations.’

The Summit participants also heard from Damilola Ogunbiyi, a leading Nigerian sustainable energy advocate, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy.

Ogunbiyi made a presentation on the theme of: ‘Balancing Sustainability Revolution with Energy Poverty Lessons from around the World.’

Experts say Nigeria’s transition priorities represent significant opportunities for Seplat Energy Plc –these prospects range from development of gas-to-power initiative, development of LPG markets to alleviate use of biomass, and development of renewable energy to serve large areas of the country not currently served by the national grid.

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