Category: Energy

The push for a cleaner climate and safer environment by world leaders has remained on the front burner. At the just-concluded Nigeria International Energy Summit in Abuja, stakeholders insisted that the African Continent, which accounts for lower global carbon emission, has a significant role to play in the reinvigorated race in energy transition, MUYIWA LUCAS writes.

If the top 15 countries that account for the highest volume of carbon emissions, global, South Africa, rated as number 12 with 479 million tons of emission, is the only African country.

This African nation comes behind China, with an estimated 10.17 billion tons; United States, emitting 5.28 billion tons; India, 2.62 billion tons; Russia, 1.68 billion tons; Japan 1.11 billion tons; Iran 780 million tons; Germany 702 million tons; Indonesia- 618 million tons; South Korea- 611 million tons; Saudi Arabia- 582 smillion tons; Canada 577million tons.

Other countries in the top bracket, but coming after the African country  are Brazil, emitting 466 million tons; Mexico with 439 million tons and Australia with 411 million tons. This was as at 2019.

And as the world continues to find an acceptable level of solution to the carbon threat, stakeholders and governments, including international bodies, have introduced policies to cushion its effect or try to discourage high carbon emission.

One of such policies is the ‘polluter pays’ principle. This is the commonly- accepted practice that those who produce pollution should bear the costs of managing it to prevent damage to human health or the environment. This principle has also been used to put the costs of pollution prevention on the polluter. It is regarded as a regional custom because of the strong support it has received in most Organisation for Economic Co-operation and Development (OECD) and European Union countries.

Perhaps, owing to the shortfall or lapses in the polluter pays more principle, the focus is now on energy transition, that is, a change to the usage of cleaner energy with an almost zero emission level.

It is instructive that knowing the gravity of what is at stake, countries like China, are pursuing an aggressive reduction in carbon dioxide emissions, with a plan to achieve carbon neutrality by 2060. Noteworthy of mention is that since 2000, the U.S.’’ carbon emissions have been on a downward trend, driven by a significant reduction in coal-burning power plants.

In 2020, India announced plans to reduce its CO2 production by 30 per cent by supporting renewable energy and solar projects, among other plans.

Russia also plans to cut CO2 emissions by 30 per cent by 2030, which it aims to achieve through a combination of new, hydrogen-fuelled passenger railways, a carbon emissions trading scheme, reducing dependence on coal, and increasing natural gas use.

Japan has equally set the goal to achieve carbon neutrality by 2050 and is planning on accelerating its climate change targets. The Japanese government and the private sector are also investing in solar and wind, as well as some experimental energy sources.

It was instructive when at the just- concluded Nigeria International Energy Summit (NIES) in Abuja, a charge was placed on the African Continent to lead in the race towards energy transition.

The summit, in its sixth edition, had as its theme: “Global Perspectives for a Sustainable Energy Future.”

Vice President Yemi Osinbajo said Africa and Nigeria in particular was strategically positioned as well as her natural resources to lead in the global campaign for low carbon emissions.

For Nigeria, Osinbajo insisted that gas must remain the transition fuel.

According to him, energy stakeholders should not support the campaign that gas should be part of the fossil fuel to be defunded.

“For us, gas is crucial not because we have it in abundance but it is the only alternative for cooking,” Osinbajo said.

He warned that Africa should not be seen as a victim on the continent, but being a low emitter of carbon, it should lead the global pack for energy transition.

According to him, African countries will benefit more in the call for energy transition if they stop seeing themselves as the victims and take advantage of the huge inherent potential to build a future that it truly deserves. Africa, he noted, has the required natural resources to determine its paths towards cleaner energy.

Osinbajo also noted that Africa could not accept some of the positions being offered by some advanced countries that gas is one of the energy products to be defunded to enable a faster progress towards renewable transition.

Hence, he noted, the continent will benefit more in the search of cleaner energy and should begin to determine how the goal could be achieved, insisting that the quest for a green energy ought to begin from low emission countries, which are mostly in Africa.

“In the last few years, I have had the privilege of chairing our government’s energy transition working group and in that capacity, in working with a strong inter-ministerial team, several energy sector players, it has become clear to me that Nigeria has a crucial and strategic role in delivering the sustainable energy future that Africa and indeed the world must have in the next few years.

“But what is that future? Let me say first what it is not.

“It must not be a future where Africa remains at the bottom of the food chain in a brave new world of sustainable energy, certainly not. But we must admit that we have the largest number of individuals without access to power, the highest number of people without access to clean cooking fuel, and we need rapid industrialisation to get millions of our people out of poverty. And we must do all of this without worsening the global warming situation.

“It is our nation and continent that will drive the next stage of global economic progress. And we can do so by becoming the first truly growing civilisation by first recognising the opportunity and intentionally developing all our potential around our natural resources, including the natural gas, of course, solar and bio- fuels.

“We must in particular leverage  our renewable energy potential, work actively on green technologies, carbon removal. And we have a young and resourceful workforce that can enable that to happen very quickly. And, quite frankly, it is the energy sector working with the government that can muster the human and material resources to move the nation on this kind of ambition.

“There is no question in my mind that Africa is the place where we can sensibly and economically go ahead with green civilisation. Nowhere else has that potential. The reason that is so is because we have the lowest emissions compared to everywhere else in the world, and because, possibly, we have some of the largest natural resources that will aid that journey, we can do much more, and we can be much more effective in developing our own agenda for a green future that will benefit the world much more than starting that journey elsewhere.

“We must not see Africa as the victims and we must not continue to input them as victims in this whole process of the journey towards sustainable energy future, we can in fact become the principal players,” he said.

According to the Vice President, there is a need for some clarity as to where the continent is in the transition journey and what it needs to be doing, because there are two existential prices for Africans and by extension, Nigerians.

Osinbajo further noted that gas, for Africa, is the future. “The reason gas is the future is not just because we have such huge amounts of gas reserve, it is also because it is possibly the only clean cooking option for us. And clean cooking is an important aspect of the entire clean energy agenda.

“It is crucial, we cannot, and we will not, we, in this part of the world, cannot do without it. LPG is crucial for clean cooking. Even when we talk about renewable energy, we think in terms of LPG and the other three cooking options.

“The first, of course, is global warming and its implications, the second is the lack of energy access; the energy poverty that we have which also results in millions of our people being poor. So, there is no question at all that for us in this part of the world, both must go simultaneously.

 We must think in terms of transition to cleaner fuel; renewable energy, and also access to power so that we can have access to development for our people and that’s why many of us in this room will agree that gas must remain a transition fuel.

“Our energy transition plan is bold and innovative, it calls for the ramping up of solar cells and we are going to be doing about 5.3 gigawatts per year until 2060, that is the plan, and we think that this plan is achievable. The production of over six billion litres of bio-fuels annually to green as it is the path to e-mobility and the transition of at least two million Nigerian households annually to cleaner cooking fuel such as LPG, and electricity every single year,” he added.

In similar vein, an official of the Organisation of Petroleum Exporting Countries (OPEC), Irene Etiobhio, agreed that there would be an increase in the demand for renewable energy and that it would rise significantly faster than any other source of energy.

Etiobhio, who is also a focal person of the OPEC-Africa Energy dialogue, further said at the summit that renewable energy would rise significantly faster than any other source of energy around 7.1 to 12.5 percent. She said that with the increase in transportation, there would also be a rise in the demand for electric vehicles in the world.

“By sector, aviation and transportation and biochemical will redefine all the demand going forward, while electricity generation is the only area expected to witness a decline. In fact, the share of electric vehicles should increase to about 22 percent by 2045. That means by 2045, we expect 2.5 billion vehicles on the road, and about 22 percent of those will be electric vehicles.

She further explained that in the long term, OPEC liquid supply will decline again from early 2030’s to an average of 60 to 7.5 billion barrels per day in 2045.

According to Etiobhio, OPEC conducted a study on energy scenarios recently.

“The first scenario, which is the advance technology scenario, address the need to reduce emissions that follow an alternative trajectory to the main street focus of substituting fossil fuel with renewable energy sources.

“In the second scenario, which is the laissez-faire scenario, faster economic growth and development needs in low risk countries highlights the potential in higher future energy requirements. The continued use of oil and gas will facilitate these goals,” she added.

DETERMINED to boost electricity meter usage and encouraged local content driven, the Momas Electricity Meters Manufacturing Company Ltd. (MEMMCOL), has called on the Federal Government to increase its support and encouragement to indigenous meter manufacturers, to bridge the nation’s metering gap.

Mr Kola Balogun, Chairman, MEMMCOL, made the appeal at the graduation ceremony of 10 youths on a five-week Printed Circuit Board (PCB) training course in Lagos yesterday.

Balogun said that encouraging and allowing consumers to acquire meters on their own would spring up more investment in metering industry.

According to him, the federal government must continue to encourage local companies sufficiently or allow consumers to be able to buy meters on their own.

“If they can buy meters on their own, we will be able to invest.

“This means we should be licensed and most of the enterprises that are sustainable today are licensed enterprise.

“License meter manufacturers, so that we will be able to reach more users,” he said.

He also advised the Central Bank of Nigeria (CBN) and development banks to seek ways of directly funding manufacturers, saying that it the surest path to reducing unemployment in the country.

Speaking on the training course, he said the PCB fabrication design had never been done in any of the higher institutions or skill acquisition centres in the country.

He pointed that the idea behind the training course was to reposition Nigerian youths for the global digital economy.

“We want to represent our youths, especially those in the science domain to be able to key into global Artificial Intelligence (AI) space.

Balgun said: “Nigerians are known to be users of computers and telephone, but we do not manufacture these things.

“We are using this platform to be able to train youths to design these digital technologies and the fundamental foundation of designing electronic device is the PCD.

“The PCD is where you plug all your components to do the magic,” he added.

According to him, each of the graduands is a macro business enterprise as a unit and has the capacity to design and fabricate for all the global digital industries across the globe.

“They are digital entrepreneurs and engineers and can now fabricate PCB and it is the heart of any electronic device.“Our next agenda is to write to most of the universities to send in some of their representatives,” Balogun emphasised.

He said that the company’s efforts in empowering youths and women with skill acquisition, had attracted grant from the German government to establish a skill acquisition institution.

“The grant is for establishing  institution for skill acquisition, which PCB will be part of the courses we are going to run.

“We have a database for all our students, to ensure that they comply with all the regulations in their curriculum.

“So, this will help them hold on to the discipline that is required to sustain what they have learnt.

“The setback we are having today is that most of the youths are losing their virtues and character that drives good knowledge.

“We are always preaching virtue, discipline and attitudinal change for us to be able to sustain the knowledge we are imparting on these youths,” he said.

Also speaking, Dr Waheed Olagunju, Chairman, One Innovation Hub, said that Nigerians needed to be well educated, skillful and healthy to eradicate poverty in the country by 2030, pointing out that the training speaks to the skill acquisition aspect.

Olagunju said: “For any nation to be productive, it needs to be skillful and the skills being imparted will enable them navigate the world better.

“We are in a knowledge based economy and PCDs are the heart of electronics.

“If we are able to produce PCDs, we will be able to produce anything electronics.

“This would go a long way to helping us achieving our objective of being a smart city and a smart city will play a critical role in driving the Nigerian economy.

“This is to enable Nigeria play an active role in the international arena that is being driven by the fourth industrial revolution.”

He noted that skill acquisition is very important for Nigeria to achieve its development aspiration as a community and as a country.

One of the graduands, Mr Lawal Kolawole, commended MOMAS Group for the initiative, while also calling on other corporate bodies to emulate the initiative to digitalise the Nigerian economy.

Kolawole said: “We are thought effective basic components of PCB and the installation.

“We are exposed to so many applications and appliances to electrical installations and telecommunications systems solutions.

“We are going to impact positively on our community when we return to Offa in Kwara State especially based on what we have been taught here,” he said.

The company has trained and graduated over 1,000 youths in various specialties of the power sector from 2018 to 2022.

The plan by the Federal Government to embark on the full deregulation of the downstream sector of the petroleum industry is gathering momentum. Stakeholders in the industry and experts have thrown their weights behind the initiative, canvassing the attendant benefits, which include consumer protection, MUYIWA LUCAS reports.

Yearly, Nigeria is said to spend about N5 trillion on subsidy payments. But the reality of the economy is said to be unable to support this trend, especially in Africa. The recent removal of subsidy by Ghana has further buttressed this position.

For sometime, stakeholders in the economy have canvassed a shift in the old order of subsidy. For instance, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said there was an urgent need for the government to remove subsidy. This, he however said, has to be done with minimum shocks to the economy and the citizens.

“Unlocking revenue from petrol subsidy would be a major step towards realisation of fiscal consolidation objective of the Federal Government.This would also reduce the tendencies to impose additional burden of taxation on businesses and moderate macroeconomic headwinds,” Yusuf told The Nation.

Warning that the economy is heavily burdened and encumbered by the fuel subsidy regime, Yusuf said huge sums could be unlocked from it if appropriate reforms were implemented.

According to him, the plan by the Federal Government to discontinue petroleum subsidy, which he described as a positive development, would unlock a minimum of N6 trillion revenue into the federation account yearly.  Also, he said, there would be an end to the several years of plundering of the nation’s resources through the subsidy regime.

It was, therefore, instructive when stakeholders at a recent virtual workshop organised by the Nigerian Petroleum Downstream Industry, in collaboration with the African Refiners and Distributors Association (ARDA), with the theme “Deregulation of the Nigerian downstream sector: The day after,” outlined strategies that Nigeria could adopt for a sustainable petrol subsidy removal.

The stakeholders, especially those in the midstream and downstream sectors, urged the Federal Government to address key challenges and outline strategies for a sustainable future in the petroleum downstream sector.

In setting the tone for the workshop, the Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA), Farouk Ahmed, said the Authority shall allow free market pricing once the sector was fully deregulated. This is even as he revealed that the NMDPRA is also committed to establishing an effective post-market monitoring and evaluating system that ensures prices of petroleum products including petrol are a true reflection of the market forces. He assured that the Authority would ensure that market deregulation objectives were achieved and sustained in reasonable and affordable manner.

But the National President of the Nigerian Association of Road Transport Owners (NARTO), Alhaji Lawal Yusuf Othman, warned that the full deregulation of the downstream sector and complete removal of petrol subsidy would introduce a mix of opportunities and challenges into the operating environment.

Preparation

The NMDPRA boss stated the plan to establish market performance metrics after the full removal of the subsidy on petrol, being part of the pre-deregulation strategy that the Authority proposed to deploy to guarantee an effective post-subsidy market.

He said: “We shall identify areas of market risks such as the possibility of price increases, reduced competition, or decreased quality of service. We will be reviewing the regulatory framework to identify any gaps that may require updates to ensure the post-subsidy market remains fair to all customers and competitive to operators.’’

He emphasised that the Authority would be committed to striking the balance in a fully deregulated market regime, adding that the protection of consumers of petroleum products in the country would be a major priority.

The Executive Director, Hydrocarbon Processing Plants, Installations and Transportation Infrastructure, NMDPRA, Francis Ogaree, explained that Part IV sections 31 and 32 of the Petroleum Industry Act (PIA) 2021 empowers the Authority to enforce pricing framework and benchmark for every petroleum product.

“Section 32(y) of the PIA provides the power for the Authority to monitor the application of pricing formula in a deregulated market,” he said.

Consumer protection

For the consumers of the product, there may not be a reason to lose sleep. According to Ogaree, though the NMDPRA will not be responsible for determining the prices of petroleum products, it would be committed to the application of the pricing formula to protect the customers.

“NMDPRA will ensure that price is fair and reasonable and that companies do not engage in price gouging or other unfair pricing practices. We will also prevent companies from exploiting consumers by providing quality products and services,” he warned.

He emphasised the need for operators to comply with the regulations as the Authority will not hesitate to enforce penalties on defaulters where necessary.

In similar vein, the Technical Consultant to the Executive Vice Chairman/CEO of the Federal Competition and Consumer Protection Commission (FCCPC), Mrs. Morayo Adisa, who represented Mr. Babatunde Irukera, EVC of FCCPC, in her presentation, emphasised the need for the regulator to establish quality and safety standards for petroleum products, including fuel quality standards, safety regulations for storage and transportation, and environmental regulations.

Mrs Adisa noted that global hike in product prices had raised concerns of price gouging among regulators globally, provoking both competition and consumer protection interventions. She, therefore, said price gouging by marketers during post-deregulation would be measured against what is considered reasonable and fair pricing.

“From a consumer protection standpoint, FCCPC by Section 17(s) of the Federal Competition and Consumer Protection Act (FCCPA) 2018, classifies price gouging as an unscrupulous exploitation of consumers by companies, firms, trade associations, or individuals. Concerns of price gouging could raise suspicion of cartel conduct or the abuse of a dominant position,” Adisa said.

She, therefore, admonished that the government could implement measures to regulate the prices of products and services in the downstream sector by setting maximum retail prices or implementing price stabilisation mechanisms.

While emphasising that the FCCPC is committed to price control in a deregulated market, she said protecting consumers’ interest in the downstream sector requires a collaborative effort from the government, industry stakeholders, and consumers themselves.

“Petroleum products consumers in Nigeria can have access to safe, reliable, and affordable products when we implement regulations and policies industry standards, and consumers’ education initiatives,” Adisa assured.

The Future

The National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo, who was represented by Mr. Mike Osatuyi, IPMAN’s National Operations Controller, said the marketers are in full support of the government’s plan to embark on full deregulation of the downstream sector.

He warned Nigerians to prepare to pay up to N750 per litre of petrol after the full implementation of the subsidy removal. He however added a caveat that the pump price may drop to around N500 if the government encourages the Central Bank of Nigeria (CBN) to provide forex to marketers at the official rate.

Osatuyi also urged the government to channel the savings from subsidy provisions to provide palliatives to the masses. He charged the government to be alert and sensitive to resentment from Nigerians.

In asimilar vein, the Chief Economist & Head Research, KPMG Nigeria, Dr. Yemi Kale, said deregulating the sector presents a cost-benefit analysis that, ultimately, determines what is best for the economy because the country has reached or may soon get to a stage where payment of petrol subsidy might be unaffordable.

Kale,  a former Statistician-General, Nigerian Bureau of Statistics (NBS), speaking on a national television station, Arise, earlier in the week, said: “We need to be honest with ourselves. I think we are getting to a point – if we are not there already – that the conversation will not even be about ‘if we should remove petrol subsidy or not’. It will be ‘Subsidy has to be removed because we just can’t pay for it anymore. I would prefer that before we get there, we can actually discuss this, so that the process of removing subsidy is well communicated and maybe in a well-phased approach.”

Palliatives

The workshop offered the regulator and  players across the midstream and downstream value chain the opportunity to deliberate on measures that needed to be put in place ahead of the full implementation of the Petroleum Industry Act (PIA).

For instance, stakeholders at the session called on the government to implement appropriate palliatives in form of public transportation, freight of agricultural produce, ensure transparent and effective communication, improve access to foreign exchange, trade finance, guarantee strategic stock, and provide access to crude oil for refineries ahead of the plan to embark on the total removal of petrol subsidy.

They also called on operators to institutionalise the professionalisation of the midstream and downstream petroleum sectors ahead of the take-off of full deregulation. For instance, in his presentation, the Managing Director, NRL, Huub Stokman, highlighted what needed to be in place for a successful transition while the Second Vice President-elect, NGA, Olufisayo Duduyemi, dwelt on the role of gas as a transition fuel.

A Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC), Mr. Taiwo Oyedele, charged the government and the regulator to identify potential pitfalls that could trigger resentment from citizens before, during, and after the removal of the petrol subsidy.

According to him, public sensitisation, industry engagement, and collaboration with civil society organisations are needed to aid public buy-in during the implementation of full deregulation by the government. He said in the course of implementing the policies, the government’s interpretation of its strategy must be issues-based and not confrontational.

Still, Kale admonished that the government should identify ways to compensate individuals who might be on the losing end if subsidies are eliminated to restore balance for the benefit of the country.

“Average Nigerian, whom it was originally intended to protect, would certainly bear a greater burden of its expense,” he said.

Loss

The subsidy regime, experts have maintained, accounts for the dearth of provision of critical infrastructure by the various administrations in the country. Recently, the Nigerian National Petroleum Company Limited (NNPCL) said the amount spent on fuel subsidy payment could provide 7,500km of road network at N400 million per kilometre and 37 well-equipped 120-Bed Tertiary Health Centres at N32 billion per hospital yearly.

A Senior Business Advisor to the GCEO, NNPCL, Lawal Musa, in a presentation entitled: “Petroleum Industry Act (PIA) and the Nigerian Economy,’’ at a joint National Association of Nigerian Students (NANS)/Civil Society Organisations (CSOs) sensitisation workshop on the NNPCL Operations in Abuja, last week, revealed that the Federal Government spent as much as N4.8 trillion yearly on fuel subsidy at the expense of the well-being of Nigerians.

Giving an analysis of the opportunity cost of the subsidy spending, Musa noted that deregulation could deliver 500,000 new houses and education and skill up of two million Nigerian students, among others.

 According to him, the removal of subsidy could deliver N12 trillion in four years to Nigeria while yearly Premium Motor Spirit (PMS) under recovery would escalate to N3 trillion, noting that the cost of fuel subsidy outweighed the direct benefits particularly to the masses. He further added that by deregulating the sector, it could provide additional 27,000 megawatts of electricity to Nigerians and build and equip 2,400 hospitals in 774 LGAs.

 “Nigeria is the largest producer of crude oil in Africa, possessing 28 per cent of Africa’s reserve, with petroleum contributing significantly to the country’s economy. The benefits derived have over the years been eroded due to the amount paid on subsidy, a regime has been fueling the vicious circle of poverty in the country,’’ Musa said.

 Explaining further, he explained that petrol was sold at the lowest price in Nigeria among most West African countries in spite of the product costing an average of $2.7 per litre globally.

Conclusion

The Chairman of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Olumide Adeosun, who facilitated the workshop, stated that the workshop was aimed at addressing key challenges and outlining strategies to ensure a sustainable future for the petroleum downstream sector.

 The workshop provided data-driven insights into the sector’s growth potential, as stakeholders emphasised the need for continuous industry engagement, collaboration, and public sensitisation to aid public buy-in on new policies by the government.

 The importance of connecting to regional markets, positioning Nigeria as the regional refining hub, and fostering relationships with international service providers, including rating agencies, finance and governance institutions, and aligning with the goals of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP), was a major focus harped on by stakeholders at the workshop.

 Stakeholders at the workshop agreed that there is the need to ensure that the Nigerian Petroleum downstream Industry remains a strong, competitive force while transitioning to a more sustainable future- one driven by market forces and not government subsidy.

Twenty five residents of Alimosho Federal Constituency have benefitted from a business skill programme on electricity power management and opportunities in the value chain. The programme was put together by the Electricity Commission of Nigeria (ECN), a private construction firm and the lawmaker representing the constituency at the House of Representatives.

The programme, intended to expose the public to business / entrepreneurship window  in the solar power management value chain, according to the ECN, serves as an empowerment scheme for the community and consolidate windows for earning revenue from solar energy installation, management and allied activities.

Speaking at the event, Director- General of ECN, Professor  Eli Jidere Bala said the intervention became necessary because there is a yearning gap to fill in the solar power generation, installation and management value chain.

In similar vein, Head, Renewable Energy, ECN, Bayo Ibraheem, an engineer, explained that by empowering the community on solar power generation, management and entrepreneurship, aligns with the objective of his firm in the area of planning, management and use of alternate and grid power management in the country. He urged the participants to take good advantage of the opportunity because of emerging markets to create wealth in the solar power value chain.

With the vast population of Lagos and its energy needs, he said equipping residents with the appropriate skills in the management of solar power installation and management strikes the right chord.

Facilitator of the programme and  House of Representatives Member – Elect , Alimosho Federal Constituency, Hon.Olufemi  Bamidele Adebanjo said the programme was put together to deepen engagement and assistance to his constituents.

Represented by his Senior Legislative Aide, Samson Saka, he said any economic intervention to better the lives of the people in creating wealth will be pursued.

He said: “This training is intended to transform their lives. This is beyond connecting wires, it is beyond connecting solar panels, but another opportunity to diversify into energy audit, its utilisation and how it could earn money. Besides, it will equip them to advise their clients on how to cut down on the cost of energy for both private and corporate entities.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has launched a six-priority Midstream and Downstream Petroleum Regulations in Abuja.

The new regulations are: Midstream and Downstream Petroleum Operations Regulations, 2023; Assignment or Transfer of License and Permit Regulations, 2023; Petroleum Measurement Regulations, 2023; Gas Pricing and Domestic Demand Regulations, 2023; Petroleum (Transport and Shipment) Regulations, 2023 as well as Natural Gas Pipelines Tariff Regulations, 2023.

At the unveiling of the regulations tagged “launching of midstream and downstream petroleum regulations”, the NMDPRA’s Chief Executive, Farouk Ahmed, noted that the regulations will no doubt aid the Authority in controlling processes, setting standards and monitoring operations in the technical and commercial aspects of the midstream and downstream petroleum sector in the country as well as provide internally generated revenue for the Authority.

He stressed that the Petroleum Industry Act (PIA) 2021 is the key legislative instrument that governs the business of petroleum operations and sets the rules for all activities in the Petroleum sector.

The Act, Ahmed noted, emplaced a framework for the development of the relevant regulations that will support sustainable growth and investment across the oil and gas value chain in Nigeria, accordingly, the NMDPRA in consultation with relevant stakeholders, has developed the regulations.

Breaking down the regulations, Ahmed said Midstream and Downstream Petroleum Operations Regulations, 2023 will regulate the operations of the companies in the Nigerian Midstream and Downstream Petroleum sector; provide procedures for the grant of licences, permits, authorizations and payment of fees; and  provide sanctions and penalties for Non- Compliance while the Assignment or Transfer of License and Permit Regulations, 2023 is to establish Procedure for Assignment or transfer of license or permit by licensee or permit holder; prescribe fees for such assignments or transfer and provide sanctions or administrative penalties for failure to comply with the regulations.

Gas Pricing and Domestic Demand Regulations, 2023 is to regulate the prices of marketable natural gas of the strategic sectors under the Act, identify the unregulated markets and make provisions for such markets.

The signing of a Bill empowering states in the country to generate, transmit and distribute electricity along the national grid line in the country may be the needed tonic to actualise the much needed stable power supply. MUYIWA LUCAS reports.

The euphoria that greeted the signing of a constitutional amendment allowing states in the country to license, generate, transmit, and distribute electricity by President Muhammadu Buhari, has remained loud.

In announcing the signing, the Presidential media spokesperson, Tolu Ogunlesi, via a tweet last week, read: “Another landmark change: By virtue of the presidential assent, Nigerian states  can now generate, transmit and distribute electricity in areas covered by the national grid. (This) wasn’t allowed pre-amendment. This is genuine, realistic restructuring — through the constitution.” With this development, states across the country can now generate, transmit, and distribute electricity in areas covered by the national grid; and for related matters.

Hailing the development, the Governor of Lagos State, Babajide Sanwo-Olu, noted that granting states more autonomy in key areas like electricity would enable the state to regulate electricity generation, transmission and distribution, and also create the Lagos Electricity Market, leading to increased access to electricity, investments and job opportunities.

“The new bills will promote efficiency, leading to better service delivery. We’ve been preparing for this by launching an electricity policy, publishing our off-grid strategy, presenting our Integrated Resource Plan and drafting a law to establish the Lagos Electricity Market,” the governor said.

Indeed, energy reforms play an essential role in technological change as they aim to contribute to an open market: costs reduction, competitiveness, and technology development. This is why stakeholders in the sector have hailed the development, especially for what it portends for the economy.

For instance, they are of the opinion that this will stimulate economic growth as it will create better involvement of the informal sector, particularly the growth of cottage industry which is a key sector for bigger industries in the provision of needed support services.

Besides, it is expected that the liberalisation will lead to better value delivery particularly in the areas of power pricing, power market, electricity accessibility, innovation, and competitiveness. This is aside building a positive means like opening-up of the market, deployment of better infrastructure, technology and price changes, including reducing the consumers’ electricity cost,

Keying into the development, Sanwo-Olu signaled the intent of the state government. “We’re committed to achieving 1GW of solar energy in Lagos by 2030 and have engaged with the World Bank for suitable funding. With the creation of the Lagos Electricity Market, we’ll fulfill our potential as Africa’s model mega city. The devolution of powers in this regard is a significant move for promoting local economic growth and development. It will open up investment opportunities. I’m excited about the next few years as Lagos takes more responsibility for our growth and the fulfillment of our potential.”

An operator in the power sector, Kayode Odebiyi, noted that when the electricity industry drifts from being a monopoly, entities operating in the sector could become more motivated to protect their markets. He said that liberalisation of the sector will berth more Independent Power Plants (IPP), which he said accounts for over 40 percent of energy production in most developed countries.  He said, these plants produce high-efficiency levels

“This liberaliation will result in several benefits to the economy because it will successfully deliver low electricity tariffs and increased private investments,” Odebiyi  said, adding that  if well pursued, it will play a key role in solving the social and economic challenges in the country.

Over time, Nigerians have complained over the constant increase in electricity tariff by the Distribution companies. Under the Multi-Year Tariff Order (MYTO) structure, tariff has been on the increase, with operators trying to get the “right pricing” for the commodity in spite of poor service delivery.

While it is agreed that price is not stable in a deregulated environment, meaning there may be times whereby there could be a significant drop in electricity price in the market, but is hardly so given the seeming “monopoly” being enjoyed by the present operators.

Recall that over two decades ago, the Lagos State Government initiated an IPP expected to provide additional 270 megawatts of electricity to Lagos. However, the project was to come under attack by the then management of the National Electric Power Authority (NEPA) by whose consent the project could take off. Fearing that its monopoly as ensured by the constitution would be broken, the now defunct NEPA described the project as “illegal and against the interest of Nigerians in some respects,” notwithstanding its earlier promises to cooperate to ensure the successful take-off of the project.

In 2014, the state moved to execute an Embedded Power Project (EPP), expected to impact massively on power supply. The idea of the power project was to generate electricity 24 hours daily for the state towards improving its economy.  The EPP was to benefit instantly areas like Ikeja, Ajah and Lekki while it would be extended to other parts of the state over time. Although the target was to generate about 3,000MW, but with an initial 1,000MW as start up.

“One thing is clear, the present power supply arrangement in the country, in spite of the privatisation of the sector, cannot take us anywhere. Many people who had thought the privatisation would bring about improved power supply are disappointed at the way things have turned out. It was either those who bought the distribution companies in particular did not do their due diligence well, or they just thought they would continue to exploit Nigerians through dubious electricity bills that they could not explain how they came about, just like their precursors; the National Electric Power Authority (NEPA) and the Power Holding Company of Nigeria (PHCN),” Odebiyi said.”

The Nigeria LNG Ltd. (NLNG) says it has joined the Oil and Gas Methane Partnership (OGMP 2.0), a partnership coordinated by the United Nations Environment Programme (UNEP) to reduce methane emissions. The company also said that the partnership would improve the accuracy and transparency of methane emissions reporting.

The  General Manager, External Relations and Sustainable Development, NLNG, Andy Odeh, said in a statement, yesterday, in Lagos. He said that the move was a further step in NLNG’s commitment to decarbonisation.

Odeh quoted the NLNG Managing Director and Chief Executive Officer, Dr Philip Mshelbila, saying that the company had signed an MoU with UNEP in the last quarter of 2022, adding that the signing demonstrated the company’s commitment to reduce methane emissions from its operations as part of its decarbonisation journey.

He said the company was proudly committing to annual reporting and phased reduction of its methane emissions and decarbonisation which would secure a future for the company and its stakeholders through a cleaner and greener energy mix that will include gas.

According to him, the NLNG was already implementing a comprehensive programme  for reporting and reducing its methane emissions, utilising the latest industry technologies to track its progress and performance.

Mshelbila said further that NLNG’s decarbonisation journey would strengthen customers’ and stakeholders’ trust in the company’s ability to take responsibility for the environment in which it operates and its ability to remain competitive globally.

“The OGMP is recognised globally as the most significant voluntary initiative for companies in the oil and gas industry to systematically reduce their methane emissions and demonstrate the reduction in a credible manner to all stakeholders,” Mshelbila said.

In a message to welcome NLNG, the group stated that it was excited about NLNG’s membership as Nigeria is a significant producer of natural gas and one of the biggest contributors to Africa’s LNG production.

“OGMP 2.0 covers 55 per cent of Africa’s oil and gas production. 75 per cent of all methane emissions from oil and gas companies in the continent can be mitigated. “45 per cent of them at no net cost. To meet that target, we invite other companies in the sector to follow the steps of NLNG and join OGMP 2.0.,” the group said.

The call was made during the Clean Energy Session #CES2023 hosted by Black Voice Media in collaboration with Africa Nxt Conference.

Guided by the theme: “Bridging the energy gap in Unserved and Under-served communities in Nigeria’’, the session featured conversations on clean energy as crucial in the drive to provide alternative energy. Moderated by Collins Teke, Broadcast media veteran and Founder of Black Voice Media, it also initiated more awareness about clean energy solutions while tackling energy poverty and climate change.

In her remark, Caroline Eboumbou, Chief Executive Officer, Energy Investment company -All On, said that the current energy supply gap in Nigeria is at least 180,000 MW, with the country barely generating 5000MW.

Due to this supply gap, 49% of Nigerians have no access to power supply, creating hindrances to opportunities from renewable energy. She called for collaboration among stakeholders to improve energy distribution. Addressing the misconceptions about Solar energy, Damilola Asaleye, Vice President, Renewable Energy Association of Nigeria (REAN) and co-founder Ashdam Solar, stated that Renewable energy should be embraced more because it is cheaper compared to other energy sources thereby providing more chances for an efficient energy supply.

Chukwuebuka Obimma Founder, D’SUON Energy stated that energy poverty cannot be solved without addressing the needs of rural communities because they remain a vital component of industrialisation while Charles Ubong Akpan, COO of Salpha Energy noted that convincing Nigerians to switch to solar Energy has been a major challenge for energy solutions companies hence there is a need for more sensitization. Panelists agreed on the need for more decentralization of renewable energy solutions and advocacy at the grassroots to aid the drive to end energy poverty in Nigeria.

On the potential outcome of the session, Collins Teke, Founder of Black Voice Media said: ‘‘The discourse is meant to enhance a shift in vulnerable communities and improve livelihood.

‘’The transition of energy renewables has the potential to improve Africa’s growth hence the need for individuals and institutions to stay committed to achieving the Social Development Goal of providing access to affordable and sustainable energy.

‘’With efficiency between the public and private sector, alternative energy will become more accessible creating a means for job creation, clean fuel reducing poverty while being a potential for national development ’’.

Stakeholders at the just-concluded African Refiners & Distribution Association (ARDA) conference canvass for concerted investment in African Downstream, clean fuels, energy poverty eradication. MUYIWA LUCAS writes.

Critical stakeholders in the African energy have resolved to mobilise for greater investment in the continent’s energy sector. Arising from the 2023 edition of the African Refiners & Distribution Association (ARDA) conference– which ended yesterday in Cape Town, South Africa, the participants called for increased investments to accelerate Africa’s deployment of downstream infrastructure, including pipelines, storage facilities and refineries, to enable the continent to address energy poverty and achieve energy independence and sustainability.

To this end, the African Finance Corporation (AFC), revealed that it has deployed about $800 million towards supporting Africa’s refinery sector with an additional $210 million in its near-term pipeline. Cumulatively, the AFC and the African Export Import Bank (Afreximbank) are investing about $16 billion in oil and gas projects across Africa.

The Global Head, Client Relations, Afreximbank, Rene Awembeng, said the company’s oil and gas portfolio exceeds $15 billion with a healthy pipeline across the entire continent. He noted that the continent is in a critical situation where demand for energy continues to rise on the backdrop of surging population.

At the conference, stakeholders also called for retention of funds within the continent to finance the over $190 billion yearly energy investment need of the continent. About $15 billion of the funds is being invested by Afreximbank while AFC already invested over $800 million with additional over $200 million expected to be finalised.

With the continent relying mainly on importation of petroleum products at a time when foreign exchange demand is hovering at $100 billion yearly and required energy investment annually stands at $190 billion, Awembeng said large infrastructure development, including, refineries that would meet demand on the continent must be prioritised and supported. He added that the creation of Africa Energy Bank remained sacrosanct to fund fossil fuel and Africa energy transition agenda.

Regretting that Africa remained an importer of all refined products, he said: “Africa has not invested in its refineries or refining capacity. We’ve not invested in our storage facilities. We’ve not invested in our pipelines sufficiently to meet the demand. So with the COVID crisis, and now the Ukraine crisis we are now in a very difficult position.

“A lot of the international banks and some of the banks that were financing oil and gas transactions have retreated from Africa for a number of reasons; leaving the burden on African financial institutions and some of the development financiers like the African Export Import Bank to look into the problem.

“The challenge now is  that we  have significant capacity to meet the demand of $190 billion every year to finance oil and gas requirements in Africa. Do we have capacity on the continent to support the $15 billion of rehabilitation of refining capacity required in North Africa, West Africa and East Africa; I don’t think we are.

“So we are going into a crisis where if you look at also what is happening with food security in terms of fertilisers and grain, we have to import plus the high costs of importation of refined products. We are in a very challenging situation as a continent to be able to finance oil and gas,” Awembeng said.

In an opening statement, ARDA President, Marième Ndoye Decraene, emphasised the role improved collaboration between African downstream players and ARDA members plays in facilitating the full exploitation of Africa’s hydrocarbon resources to achieve a just and inclusive energy transition.

According to Decraene, with energy demand set to grow across the continent by 45 percent through 2050, “Our objective is to ensure Africa’s growing demand is met with cleaner fossil fuels. We must combine our efforts to develop a strong and effective platform to ensure the energy mix and environment are prioritised. We need to create a strong regulatory framework, ensure the transfer of technology, innovation and skills to maximise the downstream industry. Financing remains a problem and we need to make sure there is available funding and that projects are bankable while accelerating renewables penetration. Our aim is to make use of platforms such as ARDA Week to strengthen our current energy capabilities and come up with solutions on how Africa can address global factors hindering the industry.”

ARDA’s Executive Secretary, Anibor Kragha, called on Africa’s downstream players can play to ensure the continent balances achieving energy security and environmental sustainability.

“Energy security is the short term need we have. We are not the biggest polluter in the world, hence we are focusing on uninterrupted, secure and affordable supply of energy and not what other global parties and markets are focusing on which is decarbonisation. Storage and distribution needs should be a focus, however reducing emissions from the fuels industry should also be prioritised. By 2030, we need cleaner transport, clean cooking and power solutions.”

The Group CEO of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari who was represented by the Executive VP Downstream for NNPC Limited, Yemi Adetunji, reiterated the role Nigeria’s gas resources will play in ending energy poverty across the West African country.

“Nigeria is a gas nation. There is a need to ensure a more gradual approach to the energy transition. Nigeria will require gas to transition fairly. Africa should focus on resources which are accessible and affordable while enhancing operational efficiency and giving players competitive edge. The NNPC is committed to the country’s energy sector strategy which includes the optimal development of all resources. The gas sector creates investment opportunities for the country to be able to invest in new energies including electric vehicles and solar. A just transition for Africa will require huge investments; hence Nigeria and Africa will need global partners to harness existing resources. We will continue to assess cleaner energy for the benefit of Nigeria while we will build new refineries and distribution networks to ensure energy reliability today and tomorrow,” he said.

Similarly, the Executive Director, Sahara Group, Wale Ajibade, said with 43 per cent of Africa’s total population living without access to electricity, rural to urban migration increasing and energy demand spiking, investments in energy will need to double to $195 billion per annum if the continent is to achieve its energy security targets.

Ajibade, in his presentation at the conference, insisted that in order to meet rising demand, the supply of refined products within the continent needs to be optimised. He noted that the projected growth trends in Africa indicate an increase in energy demand over the next few decades, with demand expected to be driven by industrialisation and urbanisation and is expected to coincide with the global energy transition.

He also said the rise in demand is projected to accelerate Africa’s deployment of downstream infrastructure to enable the continent’s energy independent and sustainability while serving to address energy poverty.

According to Ajibade, Africa faces five challenges across the downstream sector and lamented over-reliance on product importation, supply chain issues, oil theft and vandalism, fuel subsidy, and the energy transition.

He added that there are clear solutions to these challenges, which include, “investing in the construction of new refineries and the modernisation and expansion of existing infrastructure; the creation of enabling environments for investment in infrastructure; leveraging technology to address pipeline theft and vandalism – such as drones and the internet of things –; regulating fuel subsidies; and pushing for gas to be used more predominantly including liquefied natural gas (LNG), liquefied petroleum gas (LPG) and compressed natural gas for power, energy and transportation while adapting existing refineries to the changing landscape.”

Giving an insight into the viable solutions for the future of Africa’s energy sector, and drawing attention to natural gas while identifying the role solar, wind and hydro will also play, Ajibade stated that with about 13 per ecent of global natural gas reserves based in Africa, the continent is expected to embrace gas in the coming years.

He explained that while fossil fuels will continue to remain the major source of Africa’s energy demand, particularly through oil, it is expected that there will be a major shift towards a cleaner and more sustainable energy mix through the use of gas.

“In this scenario, natural gas will begin to play the role of bridging between more polluting fossil fuels and zero-carbon technologies, such as wind and solar. With factors such as a growing population, increased urbanisation and economic expansion, as well as growth across the industry, commerce, manufacturing and agricultural sectors, Africa is projected to rely more and more on gas.

“However, challenges associated with a lack of investment, limited infrastructure, foreign exchange issues and limited knowledge on gas technologies continue to hinder resource maximisation in some gas-rich countries such as Nigeria – which has put in place its Decade of Gas initiative to monetise resources,” he said.

Ajibade said over the past two decades, global investment in renewable energy has grown rapidly, stressing that the continent Africa receives less than three percent of this investment. Therefore, to attract more investment and create enabling environments, a series of financial options that can be implemented included blended finance, green bonds, risk mitigation instruments, innovation and carbon markets.

According to him, the creation of carbon markets in Africa could help countries develop mitigation projects while receiving climate-related investment, and with 24 countries already conveying an interest in this area, opportunities for trading carbon credit across several exchanges is in sight.