Avoiding the energy deficit catastrophe; need for a policy overhaul

By Akachukwu Okafor 13/06/2017

electricity-market-2

On many occasions, I have faced the need to comprehensively define energy policy or climate policy for people whose interests are aroused by the news stories/articles on energy, climate change, environment etc that come up daily. In a bid to offer a simple definition (but my professors will usually pause before saying, “this is complex and complicated”) to my listener energy and climate policy is a policy that helps to sustainably meet global energy needs while keeping global temperature below 2°C – exactly at 1.5°C – as global populations continue to increase.

In reality doing what this definition says is the biggest challenge that the world faces today. This comprises of solving energy access, energy efficiency, energy resource utilisation and environmental sustainability issues, making the necessary socio-technical transitions that the introduction and use of appropriate climate mitigation and climate adaptation measures will throw up. More importantly it is about having the political leadership to make the right policies, committed to obligations that help ensure that these policies translate to effective actions on the ground. These policies define and determine how the exponentially growing energy demands of the world growing population are met. In 2015, the United Nations published the World Population Prospects, which revealed that the world population will reach 8.5 billion in 2030 and 9.7 billion in 2050. Half of the global population is expected to be concentrated in nine countries namely India, Nigeria, Pakistan, Congo DR, Ethiopia, Tanzania, United States of America, Indonesia and Uganda. Seven of these countries except Pakistan are developing countries among the top ten countries in the world, and have the highest electricity access deficit according to the World Bank Regulatory Indicators for Sustainable Energy (RISE) report 2016.

The RISE report which is a global scorecard that compares the existence of strong policy and regulatory framework for sustainable energy across the world placed India, Pakistan, Uganda, Tanzania, Ethiopia, Congo DR and Nigeria ranked 75, 55, 53, 48, 30, 27 and 13 respectively on the position table. These countries except Nigeria scored higher than 33 on the overall score which means that significant opportunities exist from which to strengthen the policy framework for countries that score between 34-66 and it shows the existence of strong policy to support sustainable energy with countries that scored between 67-100. Twenty seven indicators and 80 sub indicators were used for the study across three energy categories: energy access, energy efficiency and renewable energy. For energy access, the indicators were the existence and monitoring of an officially approved electrification plan, scope of officially approved electrification plan, framework for grid electrification, framework for minigrids, framework for stand-alone systems, utility transparency and monitoring, utility creditworthiness, establishing a new household grid connection, permitting a new minigrids for energy access. For energy efficiency, the indicators were existence of national energy efficiency planning and energy efficiency entities, incentives from electricity rate structures, information provided to electricity consumers, and energy labelling systems. Other indicators included building energy codes, carbon pricing and monitoring, minimum energy performance standards, mandates & incentives: large consumers, mandates & incentives: public sector, mandates & incentives: utilities and financing mechanisms for energy efficiency. For the renewable energy category, the indicators were legal framework for renewable energy, planning for renewable energy expansion, incentives & regulatory support for renewable energy attributes of financial and regulatory incentives, network connection and access, counterparty risk, carbon pricing and monitoring.

The best ways to answer some of these questions lie within the solutions and suggestions that were made in “universal energy access, a new research agenda”, published by Initiative for Policy Research and Analysis According to the publication (2016), there is a need for a shift in how energy projects and research outcomes are perceived in development circles. Projects should be viewed as a process of learning and improving process and product innovation that will benefit other projects than viewing projects just in terms of numbers i.e. target beneficiaries reached. In essence project and research objectives need to be broadened and analyzed using a multi-criteria approach. Most importantly new project and research approaches must be inclusive and open to the participation of non-experts and energy users. Also, new energy access projects and research efforts for poor rural and urban populations must seek to be more people/user centred, and open to the agency and participation of community groups, networks and local knowledge experts in the grassroots technologies, social behaviour, psychology, culture and traditions that are important enablers of technology adoption and diffusion. To ensure that achieving the universal sustainable energy is not just a wish, care must be taken by the global community to ensure that these countries – India, Nigeria, Ethiopia, Tanzania, Congo DR, Uganda start today to do the right thing to ensure that no one is not left behind on energy access targets by 2030 and beyond.

 

This piece was first published by Initiative for Policy Research and Analysis (InPRA)

Okafor Akachukwu the Editor, Energy and Environment, Initiative for Policy Research and Analysis (InPRA),  a 2017 Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

 

Lessons for Nigeria from Kenya’s Solar Ecosystem

By Okafor Akachukwu 30/05/2017

Kenya Solar

Kenya’s renewable energy market and ecosystem particularly for solar energy (off grid solar PV and solar home systems) is unarguably the most successful in sub-Saharan Africa and the world. It has one of the largest per capita markets in the world – its level of product development, penetration and growth, consumer base, use of innovative solutions especially smart metering and mobile payment systems, and efficient customer service has remained a subject of learning in the sector, particularly for other African countries.

In a previous article, I highlighted Nigeria’s poor energy policy environment compared to the other 110 countries that were studied for the Regulatory Indicators for Sustainable Energy (RISE) report. What I did not highlight is that Kenya is the only sub-Saharan African country that scored tops for all three categories – energy access, energy efficiency and renewable energy. The other countries in the developing world that scored highly in the three categories were India and Sri Lanka. Compared to Nigeria’s overall score of 22, 11 and 29 for energy access, energy efficiency and renewable energy respectively, Kenya’s scores are 82, 48 and 63 respectively. Easily observed is the fact that Kenya’s phenomenal solar market development is reflective of a good and enabling sustainable energy policy environment. What this means is that the huge success of Kenya’s solar market is a result of deliberate government and development sector policy interventions that align and connect with other market interventions and activities.

This corroborates the findings of a research team at Sussex Energy Group (Science Policy Research Unit at the University of Sussex, United Kingdom) which provided a clearer understanding of what has contributed to Kenya’s success. They argue that hardware financing – financial investments in the demand and supply sides of solar technologies – and private sector entrepreneurship focusing on investing venture capital in entrepreneurs to drive and grow the market at the micro economic level, are not the only contributors to the Kenyan success as many have long believed. Rather the success was as a result of policy interventions that understood the need for a systemic approach in nurturing innovation and technological change through policy. This systemic approach leads to interventions in a wide range of areas that is generally regarded as creating an enabling environment.

The question is how can policy interventions help create the enabling environment that is required for the kind of success that Kenya has achieved? The authors argue that the overall goal of policy must be to build functioning socio-technical innovation systems that add to other efforts for the transfer, development and diffusion of sustainable energy technologies that meet the needs of all groups of consumers. Goals of policies and interventions must intentionally (1) build networks of diverse stakeholders; (2) foster and share learning; (3) promote the development of shared visions; and (4) support diverse experimentation. Two examples of how these can be achieved are the creation of sustainable energy access relevant innovation-system builders (SEA-RIBS) and using projects and programmes to build socio-technical innovation systems. The system builders are the institutions, including national and international companies, agencies, donors, networks, groups and financial institutions, that work to provide and improve relevant energy access support which may be needed in the implementation of relevant energy access projects and programmes.

In Nigeria, the mandate to lead energy access interventions – projects and programmes especially for rural areas – falls on the Rural Electrification Agency (REA) which is leading government’s effort to electrify rural communities in Nigeria. Unfortunately, in the recent past, REA has failed to provide the leadership that is required of it. Its projects and programmes funded through the Rural Electrification Fund (REF) have failed to build networks of diverse stakeholders, foster and share learning, promote the development of shared visions and support diverse experimentation. Projects have been treated more like a transactional activity than an experimentation and development activity to support learning that will help build systems. Recently, some stakeholders in the renewable energy sector especially project developers, have expressed their displeasure over the contract awarding process in the agency. For instance, the bill of quantities for some of the projects advertised by the agency does not meet industry standards and therefore cannot be executed, even if the projects can work with little or no challenges. The fear is that if solar projects are implemented based on a bill of quantities that are not standardized, not only will the projects fail to deliver on expectations, they will most likely breakdown within a short timeframe, which will start a bad story for solar technology. Project developers in Nigeria are already doing their best to change the bad image given to solar technology over the years due to badly implemented government solar projects. To invest 2 billion Naira of the Rural Electrification Fund on projects which are likely to breakdown in a short time impedes and reverses the efforts of the renewable energy sector to use solar energy to improve energy access in Nigeria. The agency must look at itself as the leading sustainable energy access innovation-system builder who must consciously look at its mandate as not just electrifying rural communities but also building a socio-technical innovation systems. This should be done by applying a broad systemic approach to the way it interacts with other stakeholders, designs and implements policies and interventions.

It is interesting to note that recently, the Federal Government inaugurated a new board for the Rural Electrification Agency whose Executive Director (Rural Electrification) is Dr Sanusi Ohiare, who holds a PhD in Rural Electrification. As my friend and colleague, I have reminded Dr Ohiare of the enormous responsibility that he has on his shoulders to ensure with the rest of the board that the right things are done at the agency to help build a sector that is resourceful in effectively meeting its mandate. One that is efficient in assisting to create an enabling environment for energy access and building a renewable energy sector and market that is successful. It is my earnest hope that the new board understands that its projects, programmes, policies, interventions and activities can make or mar the actualization of universal sustainable energy goals in Nigeria and beyond.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Promoting a sustainable energy policy environment in Nigeria

By Akachukwu Okafor 28/04/17

energy-access

Sometimes I wish that Nigeria’s power sector challenges are solved so that I will have less to write on, but this seems not to be happening as issues keep arising in this large and troubled electricity market with its various actors and stakeholders.

After my last publication on the feasibility of the power sector recovery plan, I received several messages from key sector players including from a diplomatic mission commending the article’s insightfulness and asking that I share a copy of the recovery plan if I had it. At the time the last article was published, I did not have the plan and my preliminary analysis was based on the media briefing by the Minister of Power after the approval of the plan. However, I have obtained the plan now and I hope to further analyse the plan based on the specific programmes it hopes to embark on. The feedback I found most interesting was from a former Chairman on the Technical Committee of National Integrated Power Project (NIPP) who was not happy that I did not emphasise how DISCOS, in truth, collect a lot of revenue, but turn around to claim to other market players that they collect little and are operating at a loss. He described DISCOS as the problem of Nigeria’s electricity sector for not remitting revenue and refusing to invest in upgrading their infrastructure.

I promised to be more critical of all players in the sector especially DISCOS as I have always been (and as allowed by word count – it will take not less than a 5,000 word article to analyze how DISCOS are a big problem for Nigeria’s electricity sector). I still do not understand how the government strongly believes that DISCOS operate two accounting books and yet, have not taken appropriate and necessary actions to ensure that they are more transparent and accountable. This lack of transparency and accountability helps in the low revenue base of the power sector which starves it of the finance it critically needs for reforms and recovery programmes. Interestingly, these and other issues including enforcing corporate governance from power sector operators, enforcing market discipline, developing a coherent strategy to resolve militancy and making a definite policy statement on tariff are among sector issues that the World Bank listed as conditions for the release of $1 billion needed to help fund power sector programmes.

Speaking of definite policy statements, according to a World Bank global scorecard for policy makers which compares the national policies and regulatory frameworks for sustainable energy amongst different countries, Regulatory Indicators for Sustainable Energy (RISE), February 2017, Nigeria ranked amongst the worst countries with regard to enabling policy environment for energy access, energy efficiency and renewable energy. Of 111 developing and developed countries studied which represents 96 percent of the world’s population and energy consumption, Nigeria scored very low for the three categories. For energy access, Nigeria ranked 10th worst country ahead of Liberia, Yemen, Mauritania, South Sudan, Sierra Leone, Chad, Haiti, Central African Republic and Somalia in that order. Countries that performed better than Nigeria include – Afghanistan, Congo Republic, Madagascar, Ethiopia, Eritrea, Niger, Togo, Sudan, Honduras, Mozambique. For energy efficiency, Nigeria was ranked 8th worst ahead of Somalia, Mozambique, Chad, Loa People Democratic Republic, Mali, Mauritania, Congo Republic while Niger, Central African Republic, Liberia, Vanuatu, Solomon Islands, Yemen, Burundi, Myanmar, Maldives, Haiti, Zimbabwe, South Sudan were among 12 countries that performed better than Nigeria. On the renewable energy category, Nigeria was ranked 21st ahead of Somalia, Haiti, Sierra Leone, Eritrea, South Sudan, Niger, Mauritania, Bahrain, Liberia, Congo Rep while Uzbekistan, Mozambique, Benin, Burkina Faso, Saudi Arabia, Kuwait, Cambodia, Congo Democratic Republic, Qatar were listed countries that performed better than Nigeria.

Although Nigeria’s renewable energy score improved by over ten places when compared to energy access and energy efficiency it was still 4 points below the indicator score mark for low performing countries. Nigeria’s performance on this scorecard will not come as a surprise to people with a good understanding of the energy sector in Nigeria. Space will not allow me analyse the report in detail. For instance, on the energy access category, Nigeria’s overall score for energy access was 22 and 0, 0, 17, 35, 22, 100, 0, and 0 for existence of plan, scope of plan, grid electrification, minigrids, stand-alone systems, affordability, utility transparency and monitoring, and utility credit worthiness indicators respectively. The most interesting aspect of these indicators is that consumer affordability of electricity scored 100 which is an indication that electricity consumers can afford to pay the cost of electricity.

This situation seems to be well understood by government and key electricity market players which may be what the Nigerian government is exploiting in its continued push for a cost reflective tariff for the market. However, consumer affordability of electricity is clearly different from willingness to pay for electricity which is one of the challenges that the grid sector is facing. The problem of willingness to pay borders on social issues of distrust with public utilities and citizens’ perception of government’s role in providing utilities which is mostly informed by politicians’ election campaign promises. The scores of the other indicators means that government has a lot to do in making the right policies and setting the right regulatory frameworks for an enabling environment that accelerates sustainable energy access.

On energy efficiency, Nigeria’s overall score was 11 out of 100, and this equally doesn’t come as a surprise especially when policy makers are not knowledgeable about their responsibilities to the sector. For instance, the Senate Committee Chairman on Power, Senator Enyinnaya Abaribe while responding to a question on how energy efficiency in Nigeria can be increased said that it is the job of energy efficiency appliance vendors to educate Nigerians on energy efficiency as it is not the job of government to lead energy efficiency programs, or in extension make enabling policies.

Unfortunately, the Nigerian Electricity Regulatory Commission (NERC) which should be helping policy makers better understand the sector which they are to make policies for and also supervise are not doing enough. A check on the capacity building programmes designed for legislators will reveal that most of the capacity building programmes are not specifically designed for policy makers in Nigeria’s difficult regulatory environment. Most capability building programmes are via sponsorship to international conferences that will add little or no knowledge for making the right country-specific power sector policies. The legislative committees, relevant government ministries and departments and agencies on power also lack experts who should help in crafting the right policies asides other capacity, institutional and bureaucratic challenges that trouble the sector.

Renewable energy is performing better than other categories; however, there are a few practices by some project implementing stakeholders especially government energy agencies and projects that are not only unhealthy for the immediate growth of the sector, but which will in the medium term, help destroy the progress being made by other stakeholders. These practices include poor design of projects, wrong costing of projects and lack of transparency in procurement and contract processes which lead the implementation of projects that fail within a short time. This gives a bad name to renewable energy technologies and products. To help promote sustainable energy in Nigeria, government must do what is necessary, not just in formulating enabling policies and regulations for growth but to ensure that these policies are implemented and enforced appropriately in line with best practices. While government and other stakeholders are working towards creating a more enabling sustainable energy policy environment, consumers must realize that they hold the power to wheel the ship of policy in the direction they desire, which can only happen when consumers effectively engage with the policy and regulatory making processes.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

 

The feasibility of the power sector recovery plan

By Akachukwu Okafor 06/04/2017

Trasmission

From a preliminary analysis of the recently developed power sector recovery plan approved by the Federal Government, it is not a feasible recovery plan in the medium and long term. The measures are designed as interventions to stabilize the collapsing power sector rather than help it recover. The plan will not effectively solve the liquidity problems in the sector and the cost reflective tariff only a measure that might further throw the sector into challenges if other measures are not planned for and implemented synchronously.

The power sector recovery plan comprises a wide range of pet policy actions, operational and financial interventions which intends to help improve transparency, service delivery, performance of DISCOS, transmission companies and the entire value chain. In specific terms the plan provides for simplifying and reducing the cash deficits in the sector; how to make the DISCOS viable, accountable, responsive to customers and to ensure stability of the grid and expansion of the grid and transparency and communication within the sector, in addition to how to improve sector governance and the quality of personnel on the board of the DISCOS. Other provisions of the plan include addressing access to renewable energy using mini-grids and stand-alone solutions and implementing solutions that have been developed for 37 federal universities and seven tertiary hospitals as well as stopping the vandalization of gas pipelines which will help stimulate appetite for investment in Nigeria’s power sector. These measures sound brilliant in theory, how they will be effectively operationalized remains to be seen or made public.

Direct financial interventions to solve institutional and organizational incompetence – gap in skill, knowledge, capacity and capabilities and problematic perspective of the system is not an effective way of solving market failure challenges. For instance, the liquidity problem being experienced in the sector is mainly due to DISCOS unwillingness to make the necessary investments to reduce their aggregate technical, commercial and collection (ATC&C) and entire system losses. I was recently informed by a power sub-station duty engineer that he has over 50MW of power sitting on his substation, but the DISCO in the area only accepted to collect 14MW. The result is that the remaining 36MW will waste and because it was generated, and must be paid for somehow. He further said that DISCOS preferred to accept a small fraction of what is allocated to them and leave the rest with Transmission Company of Nigeria (TCN), while they charge the customer the ‘fixed charge’ of being connected on the grid with or without electricity. This practice is said to be more profitable to DISCOS as they don’t need to share their earning with anyone. Liquidity challenges in the sector cannot be solved when key system players are involved in rent seeking practices. It is difficult to see how government plans to simplify and reduce the cash deficits in the sector by approving a Power Assurance Guarantee of N701 billion Naira for Nigeria Bulk Electricity Trading (NBET) to pay GenCos for gas supplies from this year to December 2018 when there is no plan that equally guarantees that the funds will be collected within the market by DISCOS. How subsequent power guarantees to GenCos beyond 2018 will be secured not yet known.

Making DISCOS viable, accountable, responsive to customers is more of what government wishes that DISCOS do but not what they can be in the near term. It is public knowledge in the sector that DISCOS are grossly incompetent in managing their asset, delivering quality service and have consistently refused to do so. Part of their poor attitude has been traced to how the privatization was handled. The Minister of Power in May 2016 during the presentation of a roadmap for solving the power crisis argued that cancellation of contracts and reversing privatization initiatives sends wrong signals to investors and past reversals failed in solving the problems that caused their cancellations and reversal. However, the Minister has failed to point out that these reversals failed because the process of initial engagement, reversals and renegotiations to correct previous problems are flawed by illegitimacies, lack of transparency and ridden with outcomes that satisfied the selfish interests of powerful and influential actors in the sector. I believe that investors would be happy to see reversals and reprivatisations that are transparent and are in accordance with provisions of the law and international best practices.

There are indications that there are other financial interventions asides the N701 billion Naira planned (or budgeted) for the sector which might be in the form of subsidies and introducing a cost reflective tariff that will help reduce the cash deficits. These were positions advocated by the then acting chairman of Nigeria Electricity Regulatory Commission (NERC), Mr Anthony Akah in January this year, and hinted on by the Minister of Power while briefing newsmen after the approval of the power recovery plan. The Senate Committee Chairman on Power, Senator Enyinnaya Abaribe, while answering at a public dialogue before the approval of the recovery plan, advised government to carefully determine if it is power or petrol that it must subsidize and warned that government should not give money to DISCOS. Subsidies have never worked in Nigeria; it has always been a scam. It doesn’t exist. Even when it exists it doesn’t benefit most of the population. It benefits only the rich and vested interests. Subsidies for the power sector will only elongate and complicate Nigeria’s power sector difficulties. Government should rather embark on a sector wide campaign to enlighten electricity consumers on the positive effects of not subsiding power or petroleum products on the economy and provide a plan to help stabilize and manage the short term economic difficulties that will arise. Subsidising power is not part of the solution, rather DISCOS should invest in upgrading its distribution network to reduce ATC&C losses and improve its collection measures to capture more consumers who currently do not pay for electricity consumed. There are suggestions that the business model that the DISCOS currently operate is a model that collects revenues from willing-to-pay-consumers, while unwilling-to-pay-consumers are not targeted to pay for power consumed. The proposed cost reflective tariff which is really an increase in tariff should be put on hold while government and DISCOS develop and implement a plan that ensures that all consumers that use electricity pay fairly for what they consumed. The inefficiencies in the systems especially on the part of DISCOS should not be passed on to consumers who are not protected by the system. This I believe will help solve the cash deficit problems in the sector. Government should not subsidize electricity and should also not increase tariff, unless an increase in tariff is a deliberate measure by government to push people off the grid for renewable energy alternatives – which is a brilliant measure. Unfortunately, this is not what the government plans to achieve. Perhaps a more careful study and understanding of how the market i.e. consumers will respond to the introduction of a cost reflective tariff is what government should be interested in at this moment, so that it doesn’t create more problems for the grid sector. That said, it must be made clear that an increase in tariff may increase energy efficiency (EE) measures, especially by commercial consumers that are more likely to access finance to implement energy efficiency mechanisms. Also, pursuing an energy efficiency plan is a more conscious consumer and policy driven plan which only informed consumers will be willing to take, even though there may be difficulty in change of lifestyle and business process.

Energy efficiency is an energy demand reduction mechanism that is missing in the power recovery plan, at least from the briefing that the Minister of Power gave. This has the capacity to increase the number of consumers that are served by the same quantity of energy that previously didn’t serve a lesser number. An Energy efficiency plan being included as part of the power sector recovery plan is an opportunity to link the recovery plan to Nigeria’s energy efficiency contribution in her Intended Nationally Determined Contribution to the Paris Agreement which is a 30% energy efficiency improvement by 2030, which is a measure that will help attract investments. The structure of the current mini-grids regulation is part of measures that will not effectively assure a quick power sector recovery. These and more I would be analysing in the future.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Harnessing Nigeria’s untapped enormous energy from waste potential

By Okafor Akachukwu 29/03/2017

Waste

I recall an encounter on 23rd December 2011 in Westfield, London with a sales man of some luxury skincare products who urged me to buy a set of his products (less than 75ml) for over £1,000. Not only was it unaffordable at the time, but what he told me next, which could be interpreted as “this product is not for you.” Thinking that I was a Londoner, he said, “You know London is polluted, you need this product.” I smiled, wondering what Lagos will be called, if London is polluted and whether this product will be potent in Lagos state. Since my flight to Lagos was the next day, I smiled to the sales man and said, “see you tomorrow.” I hardly look forward to being in Lagos. The traffic, the pollution – fumes from cars, dirt and floods have kept me away from the city which once I called home. The air pollution in Lagos is still yet to lessen, obviously due to increased use of dirty fuel from Europe as a recent BBC article* reported. This story also follows from a report in September 2016 by Public Eye, a Switzerland based environmental and economic group, accusing most Swiss based commodity traders of exploiting weak regulations to export toxic diesel and gasoline laden with sulphur, 200 times more than the limit accepted in Europe, into West Africa including Nigeria. While government has given importers a six-month grace period to comply with new regulations, I am looking forward to action that will enhance the enforcement of our environmental laws on waste management and new regulations and policies to curb the growing pollution from waste in our cities and utilize them for power generation purposes.

Recently it was reported that Sweden has run out of waste to burn for electricity generation and had to rely on imports from the United Kingdom and other countries to keep the plants running. The question is why can’t Nigeria turn the waste that are taking over its roads, fields and street corners into energy – electricity and heat for industrial use? The key answers are: 1.) Lack of right policies – leaders and policy makers do not have adequate knowledge on the potential in waste management which could lead to policy enforcement, revising regulations and formulation of new ones, if necessary. 2.) Lack of institutional capacity to effectively engage with international mechanisms on sound environmental management 3.) Wrong sociocultural interpretations and understanding of waste and waste management.

I worked on a policy proposal that would help improve the efficiency of UK’s energy from waste sector to comply with European Union Waste Directives, in my graduate programme. What I realised was that everything starts with and must continue with policy, directives, legislations, rules and definitions, even of the simplest of things. What this means is that the government has to define in detail what waste is and what waste is not; how best to manage waste based on categorizations or hierarchy for different sections of the economy – home, office, hospitality, agriculture and manufacturing and so on. In a nutshell, the waste hierarchy starts from: waste prevention, reuse, waste recycle/compost, waste recovery (to generate electricity and heat) and finally waste disposal if the waste cannot be managed at any of the points in this hierarchy. Interestingly, waste prevention and reuse are entirely dependent on individuals to adopt or enforce based on their knowledge. This knowledge can be learned, depending on sociocultural understanding and effective practice of waste disposal. These are areas where policies are very helpful.

For instance, the waste – slurry and manure generated in agricultural farms (pigs, cows, poultry) can be turned biogas to sustainably power facilities in the farm and households around the farm facility. That is part of how Feldhiem, a small German town known for its energy independence and self-sufficiency on renewable energy (which the Senate President recently visited) generates its electricity. Also, other agricultural biomass waste products which have high calorific value can be used as fuel in biomass gasifiers to generate electricity and heat. While there are funds for Nigeria to harness energy potentials in waste, records indicate that over 40% of agricultural waste in Nigeria are not converted into useful purposes. Nigeria is lagging in accessing CDM funds compared to other African countries and there is need for the use of these funds in Nigeria. Nigeria with 4.9% is trailing behind Brazil – South Africa – 27.6%, Kenya – 8.9%, Uganda – 8.1%, Morocco 7.3% in the number of CDM projects registered in the continent. This is more of a wide institutional lack of capacity which government needs to address. My observations from studying Nigeria’s use of United Nations Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism (CDM) funds revealed that out of 16 submitted projects, 6 located in Lagos state, 5 in Delta state, 1 each for Niger and Ogun, only 11 were registered with Delta having 4 registered projects, Lagos had 2 registered projects, the other 4 projects were rejected, with terminated validation or were negative. Of all the registered projects only one was a landfill gas project for Ikorodu (Lagos) composting facility which was a waste to energy project. Why did other highly populated states with waste management challenges not develop CDM waste management projects? How come all projects located in Delta state were registered after submission and validation while only 2 out of 6 projects located in Lagos were registered? What is different from the projects proposed to be sited in Delta state and Lagos state? What were the levels organizational and institutional partnership between the state government agencies and the project developers? These are a few questions that can help in the development of bankable and viable CDM and climate funded projects especially in waste management/low carbon energy generation in Nigeria. Nigeria would have gotten more landfill gas projects registered if state governments were interested and sought partnership with parties to the Kyoto protocol that are eligible to sponsor these projects.

In 2014, I stumbled on an ongoing €2.2M research work called Dirtpol. Dirtpol was an interdisciplinary and international research to understand the cultural politics of dirt in Africa from 1880 – Present, led by researchers at the University of Sussex and partners at the University of Lagos, Nigeria and Kenyatta University, Nairobi. One of the research themes involved a “comparative examination of the cultures and economies of recycling, consumption and waste disposal.” The findings of this research would help to understand how we perceive waste, value and manage waste which is socio-culturally ingrained depending on different cultures, environment, experience and practice. In essence, research work like this could help government and private businesses involved in waste business to develop effective waste handling and disposal programs that would change poor cultural behaviour with waste. This will mean that more people will get to use dustbins, separate waste into different forms – organic, degradable and undegradable and turn waste to wealth. This is when waste can effectively be collected, recycled or processed for energy and heat generated purposes. For those that find their way to landfills, the methane gas can be harnessed for electricity generation purposes. Incidentally the methane that many landfills in Nigeria generate are yet to be harnessed due to low capacity of Nigeria’s institutions to engage with international mechanisms and programs that will help harness our waste to energy potentials.

Solid waste pollution and lack of action of governments and private businesses to address the challenges can be quelled when there is a realization of the enormous potential to generate electricity and heat from waste in Nigeria. The value chain benefits of recycling and proper waste management to employment and wealth creation is significant and who knows we may join Sweden as a waste importing nation if we realize the wasting potential in waste.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Fixing the broken pieces of Nigeria’s electricity market – 1

By Okafor Akachukwu 13/03/17

electricity-market-2

Nigeria’s power sector is broken, collapsed and needs fixing as many power sector headlines in the past few weeks have suggested. In this year alone, a Punch January 22 caption reads “[Nigeria’s] Power System Collapses Four Times in Five Days”. A THISDAY caption on the same January 22 says “The Perennial Power System Collapse” Two days before January 22, ESI Africa reported that “Nigeria’s Electricity Generation keeps Plunging”. On January 12, Guardian reported, “Power generation drops by 207.1 MW on gas shortage”. The trend of the reportage indicated no improvements which must have necessitated Abuja Electricity Distribution Company (AEDC) to make appeals to their customers over the disrupted power supply. The Ibadan Electricity Distribution Company (IBEDC) had to issue a statement to blame the Transmission Company of Nigeria (TCN) for the power cuts. On January 27, ESI Africa reported that electricity consumers in Onitsha choose to issue the Enugu Distribution Company with a 21-day ultimatum to improve power supply and also install prepaid meters. Then on January 27, ESI Africa reports that the sector regulator – Nigerian Electricity Regulatory Commission (NERC) is seeking government subsidy to rescue the power sector. Very recently on February 7, during a National Assembly workshop on power the President of Senate, Dr Bukola Saraki was quoted to have said that Nigeria power sector was on the “verge of total systemic breakdown” which he attributed to the sale of power Distribution Companies (DISCOs) to individuals and parties who had “no idea about running a proper power distribution business”. The power sector is not on the verge of a total systemic breakdown, it has actually broken down and failing further.

The failing of the power system/electricity market depends on who you ask, when and where. The DISCOs would blame the Transmission Company of Nigeria (TCN) for not allocating them adequate power to serve the customers as well as some of the customers for electricity theft and billions of unpaid electricity bills by both government and private. Government and GENCOS (Generating Companies) blame inadequate gas supplies to thermal plants for low power generation. TCN blame GENCOS for low power generation to transmit to DISCOS and Nigerian Electricity Supply Industry (NESI) for billions it owes it. National Electricity Regulatory Commission on its own thinks that a review of the electricity tariff is due to ensure that tariffs are cost reflective and that the sector is in need of subsidy from government. Some politicians and technocrats think that the privatization of the sector needs to be ‘reviewed’ – whatever that means has to do with the political economy of the sector. Consumers on their part blames President Buhari, the Minister of Power, and DISCOS – who have preferred to be ineffectual in areas they could be very effective. DISCOs have turned themselves into the power sector’s un-cautioned bullies, and NERC has equally failed to prevail them and other actors in the sector to conduct business appropriately. Several deadlines issued by NERC to DISCOS to install prepaid meters for customers (many of whom have paid for these meters) have not been met with February 28, being the latest deadline. Consumers now group themselves in different ways that seem right to them to find solutions.  How else do you know a market that is broken and failing if not by these swarming challenges?

As depressing as the tale of the power sector is especially with continued drop in gas supplies to power plants, the Minister of Power, Mr Fashola has confidence that a policy that leads to more gas plants would be what will fix the system in terms of generation challenges. Asides, challenges with vandalization and liquidity that have adversely affected supply of gas to power plants, there is a looming threat to further development of Nigeria’s gas resources that will guarantee adequate supply of gas to our power plants. Recently, Christopher Akor of Business Day called the nation’s attention to a surreptitious attempt by the National Assembly to amend the Nigeria Liquefied Natural Gas (NLNG) Act that will mandate the company to remit 3% of its annual budget to Niger Delta Development Commission (NDDC). This move is not in the interest of Nigeria’s national energy security. Government has many ways to increase NDDC’s funding base than to further tax NLNG.

It is not surprising to hear about these moves especially when Nigeria’s Energy Commission independently develops Nigeria’s Energy Master Plan, Ministry of Petroleum Resources (MoPR) and Ministry of Power (MoE) are independent ministries and have their different ideas of how the sectors should be ran and for what purpose.

To MoPR, Nigeria’s gas is for export to earn foreign exchange, to MoE, ‘gas would help solve the power problem, maybe we should talk with MoPR to see what can be done’. Then policy makers turn around to say more tax and contributions need to be extracted from the gas sector to fund activities that can be adequately met by other means. What government should be doing at this time is to make development of the gas sector as attractive as possible. For Nigeria’s vast gas reserves to contribute in any significant way that will help solve Nigeria’s power needs especially in the long term, the Department of Gas at MoPR must rise beyond “overseeing” NLNG, West African Gas Pipeline (WAGP) Project, Trans-Sahara Gas Pipeline Projects and other projects it may have entered into and work to ensure that Nigeria’s gas is harnessed for the country’s power needs. The Directorate of Gas and Power at the Nigeria National Petroleum Corporation (NNPC) must also do more than “monitor and support” all LNG and Independent Power Producers (IPP) Projects in Nigeria. Government has to find ways for ministries, departments, directorates, agencies, commissions that work in the energy and power space to work as close knit as possible.

While Nigerians wait for Nigeria’s gas to be turned to power, there has to be new and quick to deploy solutions and alternatives such as renewables – solar, wind, biomass, biofuel, waste, hydro which are solutions and alternatives for today and the future. Government has to recognize and believe that these are feasible and practical solutions and alternatives. The Minister of Power’s view that renewables are not a solution but an alternative is problematic and does not help government in planning and policy development. Renewables on their own are however not “the” solution even when combined with power from gas. Solving other problems around energy efficiency, social, financial, technological, political, organizational, institutional and market services issues are part of the solution for our very complex and complicated electricity market. It is true that the current high forex rate in Nigeria and other factors including high duties, taxes and fuel subsidies adversely affect an accelerated uptake of renewable energy solutions particularly solar. What I see as the most important and key factor that will help fix Nigeria’s electricity market is a successful business model for renewable energy consumer financing. This will disrupt the market in ways that were never thought possible and will force the Nigerian government and other actors in electricity market to get their act together. Renewable energy entrepreneurs must continue to work hard to get this done.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

 

 

America’s failing energy policy: a response to Trump’s First Energy Plan

By Okafor Akachukwu 30/01/2017

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Clearly, at this preliminary point, the United States officially has no climate change policy and is neither committed to the Paris Agreement nor officially interested in pursuing any form of strategy that is consciously aimed at decarbonizing the US energy system. What is known to be officially available is an energy plan that is overly committed to the expansion of the fossil fuel industry possibly with most minimal environmental regulation and no singular commitment to renewable energy contribution to the US energy mix. Shortly after the swearing in of President Donald Trump on 20 January, one of the updates  made on the White House website, that caught the attention of the media and policy think thanks across the world was interestingly the “America First Energy Plan”, published as the first of issues that the new administration aims to tackle.

While it was widely known before Trump’s inauguration that his administration will be committed to an energy policy that is promotes and incentives investments in fossil fuel –  oil, gas and coal, what now comes as a shock is that the new energy plan makes no mention of harnessing other energy resources  that are not fossil based, irrespective of their immense potential to boost America’s national energy security and other contribution to the US economy which the new administration claims it is interested in revitalizing. What the US is currently left with as an energy plan that is not just harmful and dangerous – which will hurt America’s economy and national interests in significant ways in the near future, it is also toxic to US environment, ecosystem, and biodiversity including consequent catastrophic climate change effects. While other countries are making concerted efforts at decarbonizing their economies and unlocking their energy system from high carbon fuels, making huge investments in renewable energy and low carbon transitions, the United States is making fresh commitments to increasing its carbon emissions. The new American first energy plan states that the US will “embrace the shale oil and gas revolution” and “must take advantage of the estimated [USD] 50 trillion in untapped shale, oil, and natural gas reserves” including a commitment to “clean coal technology, and to reviving America’s coal industry”. These are fossil fuels that its exploration have been proven to be dirty, with huge environmental impacts and also requires tremendous energy and resources to process. Unfortunately also these fossil fuel reserves fall into ‘unburnable carbon’ – which is a category of fossil fuel reserve that carbon experts argue must not be burned if the world will have any chance of successfully decarbonizing global energy system and keep global temperature at 1.5o C. The new plan strongly demonstrates lack of understanding of fundamental environment and climate change issues, neglect of sound majority climate science or even sympathy to the outcry of the climate community.

Importantly, it is also lacking significantly in key energy security strategies that would be in the US interest without in any way compromising its commitment to the use of fossil fuel. For instance the new plan makes no mention of an energy efficiency commitment, which is widely known to be is a key strategy to reducing energy demand which inversely increases a country’s national energy security. Perhaps, the thinking of the plan is that pursuing an energy efficiency improvement program would reduce energy demand and consumption wouldn’t be harmful for fossil fuel supply side of the energy business. It is clear that the plan’s only approach to solving US national energy security issue – dependence on foreign oil especially from OPEC is to explore all the oil resources in homeland US. It should be noted that Obama’s energy policies succeeded in cutting US oil imports by 60% – which was achieved by sound energy plan and dependence on a healthy mix of energy resources including renewable energy sources. Interestingly, Trump’s new energy plan labelled Obama’s Climate Action Plan and other energy sector regulations and policies as burdensome, “harmful and unnecessary” which it pledged its commitment to eliminate. This policy position certainly sets a calamitous tone for an uncertain and unsafe climate future for America and the world. The recent executive orders signed by President Trump approving the construction of the controversial Keystone XL and Dakota Access pipeline projects are clear indications that his administration is strongly committed to pursuing an increased fossil fuel energy system.

The new energy plan was also good at creating some ambiguity of how it hopes to achieve some of its goals. For instance, how the US hopes to continue providing a responsible stewardship of the environment when it also pledged to refocus the EPA to its essential mission of protecting only Americas air and water and at the same time conserving natural habitats, and preserving natural reserves and resources while promoting exploration of shale oil, gas, coal, and construction of vast oil pipelines is not clear. How President Trump hopes to fulfil his promise to rebuild roads, highways, airports, schools, bridges, railways and build new infrastructure that are not likely to be climate friendly is uncertain. President Trump may only succeed in endangering of the lives of Americans that he swore to protect if he embarks on building projects that don’t recognize the reality of climate change impacts such as increasing temperatures, devastating floods, hurricanes, sea rises. It is hoped that this energy plan is the first as its name implies. Probably a second energy plan would provide strategies to deal with the issues of reducing US emissions, increasing renewable energy investment, increasing energy efficiency and combating climate change. But before a second energy plan, there is need for a detailed framework of how the first energy plan would be implemented. At this stage there is no doubt that America has lost its once critical voice and leadership position to save the planet. The ball is back in the courts of green, environment and climate change campaigners to refocus the pressure to the politicians in Washington DC; else we may be losing the fight of saving the planet. America will also be losing its chance to become great again.

First published by Initiative for Policy Research and Analysis (InPRA)

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and  Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Twitter: @akachukwu Email: akachukwu_okafor@yahoo.com