The experts held that countries and regions across the globe should be allowed to chart their own energy transition pathways based on their development needs and access to energy.

The experts who spoke yesterday at the opening of the 16th Nigerian Association for Energy Economics, NAEE, Conference in Abuja said African countries could be expected to sacrifice their need for economic development on the altar of energy transition. 

With most African countries lagging significantly in the global energy access index, they held that subjecting countries on the continent to the same requirement was unjust.

In his keynote address, the Secretary General, African Petroleum Producers’ Organisation, APPO, Dr. Omar Ibrahim, declared that the climate change crisis facing the globe today was caused by the developed countries which should bear the responsibility of fixing it.

Dr. Ibrahim noted that it is unjust to expect African countries which contributed very little to climate change to bear the uniform cost of reducing global warming.

While appearing to question the motive behind the push by western countries to impose a uniform energy transition plan, he pointed out that “today’s climate activism is driven more by the quest for energy security by the developed countries than by concerns about the environment. A very good demonstration of this reality is the response of today’s champions of energy transition to the use of fossil fuels in the wake of the Russia-Ukraine war.

“The very people that announced an end to funding oil and gas projects especially in Africa, ostensibly because they are considered dirty fuels and dangerous to humanity, sent high powered delegations to our countries offering to fund oil and gas projects that for decades were begging for investors.

In his presentation, the Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Engr. Farouk Ahmed noted that while Africa is a continent that is greatly endowed with all energy resources, it is known to be energy poor and economically disadvantaged as a result of its lack of energy security.

“African energy mix must be developed to ensure an accelerated emplacement of a secured energy supply and access for all, where every available African energy source is sustainably employed for guaranteeing the continent’s energy needs.

“The discussion around a just and equitable energy transition is very much relatable to the African continent, considering that the continent has a negligible contribution to global CO2 emissions compared to the nations that are pressuring the continent towards a misaligned/disproportionate decarbonization energy transition programme”, he added.

Engr. Ahmed who was represented by the Executive Director, Distribution Systems, Storage and Retailing Infrastructure, Mr. Ogbugo Ukoha stressed that “the African continent must ensure that it pursues only energy evolution and transition and reform strategies that would not sacrifice its economic growth, which is required for supporting the highest continental population growth rate”.

The simultaneous arrival of the two initiatives shows that Africa may play a role in Europe’s drive for greater energy independence and a dramatic reduction in carbon emissions.

The European plan includes strategies to develop a clean (green) hydrogen network and by 2030 it aims to produce 10 million tons (MT) per year domestically and import 10 MT.

Africa could be a key supplier, especially northern countries.

“North Africa is ideally placed to help serve the growing European demand, leveraging on existing bilateral energy relations, exceptional solar irradiation conditions, existing export infrastructures (including port terminals), and new pipeline connection projects for the 2030s,” consultants Deloitte said in their 2023 Global Green Hydrogen Outlook report.

North Africa will have “12 MT of pipeline capacity availability from 2035,” the report said.

Falling costs and wide availability of renewable energy means many developing economies, such as those in the African continent, could produce clean hydrogen at one-quarter the cost of European production, according to the consultant.

By 2050, four regions worldwide will account for almost half of global hydrogen production and 90% of trade, Deloitte predicts, predicting North Africa’s export potential at 44 MT of hydrogen, or derivative equivalent, followed by North America (24MT), Australia (16MT) and the Middle East (13MT

Ideal conditions

Africa’s massive stretches of unclaimed, sunbaked land make it ideal for setting up large scale renewable projects, with more than 80% of territory in Algeria, Morocco, and South Africa available for development compared to less than 10% in Japan and South Korea, Deloitte says.

Africa is one of the world’s largest and least populated continents, making large-scale renewable energy deployment more feasible than in more densely populated regions.

Relatively low industrial development means Africa’s move toward emission-free energy generation leapfrogs some of the larger environmental missteps made by more economically developed nations. In much the same way, African telecommunications jumped land lines and went straight to mobile networks.

“For many African countries, the question is not how to reduce their carbon footprint, because the continent’s overall contribution to global GHG (greenhouse gas) emissions is already low at less than 4 per cent,” United Nations Office of the Special Adviser on Africa (OSAA) cluster lead for Energy and Climate Bitsat Yohannes wrote in a post in the UN’s ‘Africa Renewal’ magazine.

“Instead, we must examine how the continent can sustainably harness its existing resources to meet the growing demand for energy needed for economic development and to lift citizens out of poverty while following a sustainable path to a net-zero future.”

Accelerated development

The push toward clean hydrogen could enable African countries to become more energy independent, and promote zero-carbon industrialization. This would create both economic growth and new jobs, as well as enabling and accelerating renewable energy deployment across the continent, a Green Hydrogen Organization (GH2) and Race to Zero study noted.

AGHA’s clean hydrogen ambition of 30 to 60 MT a year could add $66-$126 billion to the gross domestic product (GDP) of its members in 2050, equivalent to 6%-12% of the AGHA’s GDP, as well as creating 2 to 4 million new jobs, according to GH2’s ‘Africa’s Green Hydrogen Potential’ study.

Harnessing this potential could unlock competitive and decarbonized growth across the continent and beyond and unlock 1 trillion euros ($1.1 trillion) in investment, according to a joint study by the European Investment Bank (EIB), African Union, and the International Solar Alliance.

“The exciting thing with green hydrogen is as you scale up the investment it remains commercially attractive and, in the end, profitable,” one author of the EIB report says. “In the past that hasn’t happened because there hasn’t been a business case, whereas here, within the energy sector, it makes sense.”

The 2035 goal of 50 MT will arise from capturing Africa’s massive solar energy resource, which the EIB sees as 1,230 GW new solar energy generation across four hubs; Mauritania, Morocco, southern Africa, and Egypt.

The clean hydrogen industry will help decarbonize Africa’s heavy industries of steel, fertilizer, mining, and transport through the annual production of some 140 MT of clean steel and 160 MT of clean fertilizer while producing and distributing some 3,800 million cubic meters of clean, fresh water, up to 5% of domestic needs.

If such potential was realized, clean hydrogen could be produced at less than 2 euros per kilo, the EIB says, making the continent an important competitor in international energy markets.

Africa’s potential will be, arguably, as important for Europe as it is for the continent itself.

“From an economics point of view, the whole premise behind us getting involved in Africa is that they can do it at a cost that nobody else can. They can produce renewable power in quantities that we will never be able to and that makes it important for us,” another author of the EIB report says.

This project marks JinkoSolar’s participation in its first World Bank Loan project in the Central and Western Africa region and plays a crucial role in the World Bank’s “Light Up Africa” ​​initiative. Central African Republic faces a severe shortage of electric power and struggles with significant power supply challenges.

However, JinkoSolar’s high-efficiency modules provide a reliable source of clean energy, greatly improving electricity efficiency and promoting the utilization of clean energy in the region. Particularly for the capital city of Bangui, the smooth implementation of this project will alleviate the power supply pressure and provide sustainable green electricity for local industries and residents.

Jaffer Wang, GM of Sub Sahara Africa at JinkoSolar, stated, “We are proud to support the World Bank’s ‘Light Up Africa’ initiative and provide reliable clean energy solutions to the Central African Republic. Through this project, JinkoSolar demonstrates the outstanding capabilities of Chinese manufacturing in the global PV industry. This project exemplifies our commitment to empowering communities with sustainable energy and driving the global transition towards a greener future.”

After the success of its Coral Sul FLNG scheme that came on stream in late 2022, Eni plans to contract a consortium of JGC, Samsung Heavy Industries and Technip Energies to build a replica vessel to the same specifications as the first unit.

In 2015, Eni acquired its environmental license for Coral Sul. The facility shipped its first cargo in November last year. Shortly, Eni started working on plans for a second unit.

The latest facility will be developed 25 kilometers north of Coral Sul. The Coral Norte project is estimated to cost $7 billion. The facility is expected to begin liquefaction and export in 2027 if it progresses as planned.

The Coral reservoir holds 17.7 trillion cubic feet of gas and needs a multi-phase development strategy to tap the abundant gas reserves. Coral Norte is the next phase of the development plan.

Coral Norte, which will be a replica of Coral Sul, will be able to produce 3.5 million tons per year of LNG. The facility will comprise six production wells and a subsea production system, with umbilical, risers and flowlines to transport gas to the FLNG vessel.

As the world is moving toward a more sustainable and low-carbon future, Mozambique represents an excellent platform and will play a strategic role in satisfying the world’s energy requirements. The gas reserves in Mozambique will contribute to energy security in Europe.

Once operational the projects will deliver renewable energy under a 20-year PPA. These are the first REIPPPP solar developments in the fifth bidding round to reach a financial close. Scatec will own 51% of the equity in the projects, with H1 Holdings, Scatec’s local Black Economic Empowerment partner owning 46.5% and the Grootfontein Local Community Trust 2.5%.

Scatec will be the EPC provider and provide O&M as well as asset management services to the power plants. Construction start is expected during the first quarter of 2024.

“South Africa is a focus market and this value accretive investment with project returns above our return hurdle, is in line with our strategy to grow profitably and build scale in Sub-Saharan Africa,” said Scatec chief executive Terje Pilskog.

“We are now looking forward to starting construction next year and achieving commercial operation in 2025, while powering approximately 100,000 households in the region,” he added.

The power plants have an estimated total project cost of $270m of which Scatec’s EPC contracts account for approximately 75%. The project will be financed by equity from the owners and $241m of non-recourse project finance debt provided by Standard Bank of South Africa as mandated lead arranger.

Huybens emphasized the significance of the NEP and Nigeria’s leadership in small grid development, stating, “This is the first national electrification project we see at work here, about $350 million is coming to a close, and we are preparing a successor project that will be $750 million”.

She also expressed her admiration for the Kilankwa project, noting that it enables faster access to electricity for more people than extending the national grid alone. Huybens praised the foresight of considering how to optimise the use of electricity generated to expand productive activities, such as the rice mill she visited.

The director highlighted the importance of access to electricity for all, stating that it is one of the most crucial goals for any country.

She emphasized that electricity is essential for communities to thrive and for various aspects of modern life, including education and the adoption of electric vehicles. Huybens reiterated the World Bank’s commitment to eradicating poverty by supporting countries in providing electricity access to their populations.

The managing director of REA, Mr. Ahmad Salihijo stated that the project currently serves approximately 300 households and businesses. He mentioned that the World Bank developed the project under the performance-based grant of NEP and expressed their focus on promoting productive use and connecting energy-efficient equipment to the mini-grid.

One of the beneficiaries, Mr. Ayuba Yabo, a rice miller, expressed his gratitude to the Federal Government and the World Bank for bringing the project to their community. Yabo highlighted how the project has reduced the cost of diesel for his business, enabling him to increase his profits.

The World Bank’s commitment to investing in the Nigeria Electrification Project demonstrates its recognition of the importance of access to electricity for sustainable development. With the additional funding, the project aims to provide electricity to more communities and accelerate economic growth and prosperity in Nigeria. (NAN)

Oil Secretary Pankaj Jain met Total Energies CEO Patrick Pouyanne last month and held discussions on resuming operations at the project in the southern African nation, which was halted in 2021 due to security concerns.

Foreign Minister S Jaishankar had also visited Mozambique in April this year as part of India’s plan to deepen trade and diplomatic ties with the African countries.

Key project for India

The project assumes importance due to logistical convenience, as Mozambique is close to India’s west coast), which has the maximum number of LNG terminals, sources said.

Besides, its geographic location positions to meet the demands of the Atlantic and Asia-Pacific markets as well as tap into the growing energy requirements of the West Asia, and India, one of the sources added.

Three Indian PSUs—ONGC Videsh (OVL), Bharat PetroResources (BPRL), and Oil India (OIL)—hold a total of 30 per cent stake in the project, which was first expected to commence operations in 2024 but has now been delayed to 2027 due to reasons such as change of ownership and security at the project site, sources said.

The project was halted in 2021 after Total Energies declared force majeure following Islamic State-linked insurgents attacking civilians in Mozambique’s northern Cabo Delgado province, where the natural gas project is coming up.

Sources said that discussions also focused on resuming operations at the offshore field development and the two LNG trains. Efforts are on to resume the project by July–August 2023. It is now expected to be fully operational by 2027.

Another issue is the escalation in investment costs. Total Energies is in discussions with the EPC contractors, and it needs to be seen whether there will be a cost escalation.

The project will restart once force majeure is lifted, which is likely to be very soon. More clarity on cost escalation matters will come in the next 2-3 months as talks progress, a source said.

A senior government official said the project was delayed due to a change of ownership from Andarko to Total. In 2019, Total Energies acquired Anadarko Petroleum’s 26.5 per cent stake in the project for $3.9 billion. Insurgent activity in the area is another key concern.

“Currently, Total has published a humanitarian report and an action plan, which have been decided by the Mozambique LNG partners based on the recommendations of this report. Now, a foundation will be created with a budget of around $200 million to be used for the socio-economic development of Cabo Delgado,” he added.

In Windhoek, where 20% of the population lacks access to power, the “Informal Settlement Renewable Electrification and Upgrading Program” would directly assist almost 200,000 people.

The Urban and Municipal Development Fund supports national socioeconomic development and poverty reduction by assisting governments with investments in sustainable urban development for more climate-resilient, resilient, livable, and productive cities.

The emergence of informal settlements, which are marked by non-electrified areas and undeveloped economic activity and significantly impair people’s quality of life, is one effect of Windhoek’s fast and unchecked urbanization.

With the creation of the document outlining the project’s three primary components’ feasibility and tendering, it is anticipated that it will begin this year:

• The installation of 60 MW Solar PV and related batteries
• The development of an overall structural plan for the rehabilitation of the informal settlements, involving a participatory process to identify and prioritize investment opportunities unlocked by electrification, e.g., water, roads and mobility, green areas, market opportunities
• Institutional support to the Municipal Council of Windhoek. This will involve reviewing existing rules and regulations and legal support to accelerate its green plans and electrification goals.

It is anticipated that the availability of electricity services will have a significant socioeconomic impact, supporting the growth of small and medium-sized businesses as well as household activities, as seen in nearby electrified communities. Additionally, the use of solar energy will lessen the GHG emissions produced by burning kerosene and firewood, lessen deforestation, and improve air quality.

Mike Salawou, the director of the Infrastructure and Urban Development Department, stated “the project is strongly aligned with the African Development Bank’s top five priorities, in particular, to Light up and Power Africa, Improve the quality of Life for the people, and Industrialize the continent.”

Negotiations for the agreement are due to formally conclude at a ceremony in Nairobi attended by President William Ruto, his Trade Minister Moses Kuria, and EU Trade Commissioner Valdis Dombrovskis.

Once entered into force, the Economic Partnership Agreement (EPA) will give Kenya tariff-free access to the EU, its biggest market where it sends roughly one-fifth of all its exports.

These are mainly agricultural products such as the country’s famous tea and coffee, and 70% of its flowers.

Kenya will gradually open its markets but exclude a range of sensitive products, said Dombrovskis, who said it was a “momentous day” for the two countries.

“This puts us firmly on a path towards a privileged relationship, based on trust, rules and mutual opportunity,” he told reporters on Sunday, ahead of the formal announcement.

Demand for carbon offsets, generated through projects such as tree planting or using cleaner cooking fuel, is expected to grow as companies seek to use the credits to help meet net-zero emissions goals.

Some 16 Saudi firms, including Aramco and Saudi Electricity Company, paid 23.50 Saudi riyals ($6.27) per metric tonne of carbon credits, auction organiser Regional Voluntary Carbon Market Company (RVCMC) said.

The company, which will launch a full-time exchange in Riyadh in the first six months of next year, was founded by the Saudi Public Investment Fund and Saudi Tawadul Group.

The credits auctioned were certified and come from projects that avoid emissions by using sustainable technologies or removing carbon from the atmosphere, RVCMC said.

Saudi Airlines also took part, RVCMC CEO Riham ElGizy told Reuters, since the certification of the credits covers offsets for airline emissions.

RVCMC, which held its first auction of 1.4 million tonnes of carbon credits in Riyadh last October, said it chose Kenya to highlight the need for investments in climate projects.

Although the East African nation is a small polluter, contributing less than 1% of annual global emissions, it has been hit hard by climate change in recent years, with devastating droughts killing crops, wildlife and livestock.

“We are here to walk the talk,” ElGizy said.

Companies see the voluntary carbon market as essential in helping them to meet environmental targets because they allow investment in projects that lock away climate-warming emissions that they are unable to cut from their own operations.

As more companies target net-zero emissions by 2050, demand for offsets is set to grow, although concerns around the quality of some projects have deterred some, prompting calls from climate campaigners, industry and other potential buyers for tougher rules.

Worth around $2 billion in 2021, according to Ecosystem Marketplace, the annual global market for voluntary carbon credits could hit $50 billion by 2030, consultants at McKinsey have estimated.

Criticisms of the carbon offset market have included a lack of transparency and a limited supply of credits, as well as questions over the quality of projects.

ElGizy rejected the criticisms, saying RVCMC works with two separate, independent teams of experts to vet projects that contribute credits for sale.

“If there are any red flags, we immediately exclude this from the auction,” she said.

Some 70% of the credits at Wednesday’s auction were generated by projects in Africa, RVCMC said.

“This includes the supply of improved clean cookstoves to communities in Kenya and Rwanda and renewable energy projects in Egypt and South Africa,” it said.

($1 = 3.7475 riyals)