The rise of cheap renewable energy is starting to upend the bottom lines of fossil-fuel companies world over; while Nigeria National Petroleum Corporation (NNPC) has being relatively quiet with renewable energy, its counterpart Norway’s state-owned Equinor is planning to invest in a $180 million fund for battery and related technologies.
The investment is a major sign of how the world’s biggest oil companies are diversifying into low-carbon vehicle and grid tech, while also hustling to profitably harness the wind and the sun even though it remains a small part of their portfolios. Meanwhile Nigeria state-owned corporation is still struggling to shoulder the cost of old perennial problems such as subsidy, pipeline repairs and underperforming refineries.
Luqman Agboola head of energy infrastructure at Sofidam Capital said with better regulations Nigeria National Petroleum Corporation (NNPC) should be operating like Saudi Aramco or Equinor by not only meeting local demands but also expanding to other frontiers such as renewables.
“Due to weak laws and regulations the corporation still seems to be struck in past glory,” Agboola said to BusinessDay.
The advantages of renewable energy utilization cannot be overemphasized, especially to a developing country like Nigeria, where population growth is high with an increase in industrial activities which results into environmental pollution and economic difficulties from more consumption.
Nigeria, for instance, is one of the countries that largely supply crude oil in the world, but still suffers setbacks in terms of access to electricity for their daily usage in homes and industries, a problem which can be easily solve with adequate investment in renewables.
Unlike Nigeria, Norway’s development of innovative battery storage technology will aid in the spread of renewable so as energy can be stored more effectively and economically which Volta Energy Technologies, a consortium that provides venture financing to startups seeking breakthroughs in battery technology will receive the investment from Equinor.
“Volta will invest in battery technologies and in related areas such as artificial intelligence and methods to quickly charge electric vehicles,” Jeff Chamberlain, Volta Energy Technologies chief executive told fortunes.
While Norway’s Equinor boasts of similar oil production capacity Nigeria’s NNPC with an average of two million bpd same cannot be said in futuristic plans beyond oil as research by Bloomberg New Energy Finance ignored Nigeria in the list of leading countries in Africa’s renewable energy revolution.
The only renewable energy source Nigeria utilizes is hydro-power and biomass; where solar energy is minimally utilized for street lightening, mostly in the cities. The country relies also on fossil fuels, natural gas and oil, which are non-renewable – they dwindle, are expensive, and pollute the environment.
Just three weeks ago, Norwegians sovereign wealth fund which is the largest such in the world, announced that it will be divesting the oil and gas assets of the fund. The Government Pension Fund Global manages around $1 trillion in total assets. Norway’ finance minister Siv Jensen said that the step is necessary to shield the fund from the risk of declining oil prices.
The divestment decision will have no effect on the fund’s investment in Shell and BP mainly because they are in oil refining along with oil production and they also have significant renewable energy operations. The government also has not expressed any intention to divest from Equinor as it is already ramping up renewable investment.
Also, Saudi Arabia has embraced solar and other sources of renewable energy to reduce its dependence on oil and diversify its economy in recent years,, under the general reform plan being pushed by the Crown Prince of the Kingdom, Mohammad Bin Salman Al Saud.
DIPO OLADEHINDE
