Introduction
In October 2020, the Federal Government of Nigeria received a presentation and proposal from the Minister of Finance, Budget and National Planning on the breakdown and highlights of the 2021 budget. A significant portion of funding allocated to the Federal Ministry of Power will support rural electrification programmes, off-grid and on-grid renewable energy projects, distribution and transmission projects, maintenance projects to manage the existing systems, amongst other projects outlined in the budget proposal. This allocation highlights Nigeria’s commitment to achieving uninterrupted electricity. As the Nigerian Electricity Regulatory Commission (NERC) states on its website, “constant and reliable power supply is critical to the growth of the Nigerian economy.” However, one aspect of the electricity industry Nigeria is yet to explore fully and incorporate into its sustainable goals is the energy management (or energy efficiency) Industry. Although power generation receives more attention in the electricity industry, energy management still holds distinctive leverage to support the power sector. It will play a vital role in helping Nigeria to achieve reliable and affordable electricity supply to all consumers.
The synergy between Energy Management and Power Generation
Power generation focuses on generating electrical energy, which will eventually be transmitted and distributed across the country to provide power. Whereas, energy management is defined as the process of optimising the peak energy demand and energy consumption in a building. From the definition, energy management focuses on reducing and optimising energy usage for residential, commercial and industrial buildings. It involves analysing the current energy usage and determining ways to enhance the operational effectiveness of the building. Energy management incorporates a holistic management approach which allows for proper maintenance of buildings throughout its lifespan.
Energy Efficiency Benefits
In terms of lifecycle costs, the operating expenses for a building far outweigh the initial design and construction expenses. The magnitude of operating costs sheds light on the importance of managing the building efficiently to reduce lifetime expenses and increase the building’s longevity. A major advantage of energy management is the reduced building energy consumption which reduces the utility costs paid monthly, thereby releasing some utility expenditure for future investments. Implementing energy-efficient strategies decreases the peak demand and energy consumption in buildings which reduces the grid maintenance and frees up the grid to reroute power into areas of need. Performing energy management on a global scale could potentially avoid the need for developing new power plants due to overall efficiency improvements by the electrical customer. The government plays a critical role in driving the implementation of energy management strategies by creating policies and programmes that support energy management and efficiency improvements across the diverse business sectors in Nigeria.
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Energy Efficient Policy and Programmes
Growing the energy management industry will have numerous advantages. It will help Nigeria in achieving power and sustainable goals; however, this cannot be achieved without the government providing enabling policies and programmes to increase its growth. Funding for such programmes are typically embedded as part of the government budget at the initial phase and can be transitioned into a ratepayer-funded programme as the programme matures. According to the US Department of Energy, the information below represents examples of different types of energy efficiency policy and programmes:
Financial Incentive Programmes
Financial incentive programmes are initiatives operated by electrical distribution companies (DisCos) or administrators hired by DisCos, to minimise energy usage while operating equipment or producing a good/service. For consumers, these programmes provide an educational opportunity to learn more about energy efficiency while reducing utility costs. Outside of lowering capital cost burdens, creating state and local financial incentives that help building owners to execute energy efficiency projects effectively will be a visible marker for government impact.
Commissioning and Retro-Commissioning Programmes
Commissioning programmes involve ensuring that all equipment in a new building is functioning and operating in an energy-efficient manner. Energy efficiency can be incorporated in the design, construction and operation building phases. Retro-Commissioning involves analysing existing building energy usage and equipment to identify opportunities for implementing low-cost energy-saving measures. For retro-commissioning measures that are capital intensive, funding could be obtained from a financial incentive programme.
Energy Efficient Building Codes
Energy Efficient Building Code defines a minimum standard required for buildings to be designed efficiently. This code is incorporated in all stages of a building design to minimise energy usage and reduce utility costs, and ultimately incorporate a policy that propels a country towards a sustainable and efficient economy. Nigeria has taken a step in this direction by launching a Building Energy Efficiency Code (BEEC) and an Energy Efficiency Building Guideline Handbook in 2017 to show Nigeria’s commitment to the Paris Agreement. The Nigerian BEEC estimates the potential to save up to 40 percent of current energy usage in buildings, utilising the standard created, and is viewed as a game-changer for the building construction industry.
Energy Benchmarking
Benchmarking programmes are viewed as a policy tool that compares the building energy usage of similar facilities to identify opportunities for energy efficiency upgrades. Facilities that visually see the performance of similar structures which are operating more efficiently than theirs will serve as motivation to make efficiency improvements.
Energy Efficient Equipment Standards
This programme focuses on establishing policies that dictate minimum efficiency standards for equipment. Establishing policies that require products developed or imported to meet minimum energy efficiency standards will slowly translate the mindset of Nigerians to always consider energy efficiency in all business conducted. An added benefit to such a programme would be providing financial incentives to local manufacturers and suppliers to develop equipment that meets Nigeria’s energy standards. The result is an opportunity for Nigeria to create a database of local energy-efficient equipment and manufacturers. This database will allow local electrical consumers to have a wide array of energy-efficient equipment to select while contemplating energy efficiency upgrades for buildings, which will reduce reliance on external imports for such products.
Conclusion
Energy Management can be viewed as the least expensive energy source due to focus on reducing existing capacity; compared to building more capacity. By including energy reduction to our existing power goals, citizens are actively involved in making Nigeria energy efficient with visual markers of implementing energy reduction strategies. The Nigerian government has taken a step in this direction by creating an energy efficiency policy (BEEC). However, it can do more to ensure its electrical customers experience the benefits of energy reduction. What programme can the Nigerian government implement to engage its citizens in incorporating energy conservation measures? The answer lies with the financial incentive programme for energy management, and the next issue will dive deeper into this programme and its benefits.
