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

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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

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

trump-energy-plan

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

Recurring Energy issues and developing a Strategic Niche Management Approach for the energy sector

By Okafor Akachukwu |05/01/2017

It is not news any longer that President Buhari presented the 2017 appropriation bill to a joint session of the National Assembly. What you may not have heard or which will come as a surprise if you have is the sum of N65 billion appropriated for the presidential amnesty programme. This is quite a huge sum, and no doubt every failing whether on the part of government, Niger Delta people or the oil companies operating in the Niger Delta since 1956 comes with real life consequences. The huge loss in oil revenue and power outages this year was mostly attributed to the activities of militants in the Delta. In this year also, government launched the Ogoni Clean-up which is estimated to cost USD 1 billion and 30 years to fully complete, however a lot of places in the Delta and oil producing areas remain to be cleaned up.

With the past events in the region since the turn of democracy in 1999 till date, we are yet to learn our lessons as a country. We seem to be more concerned about meeting our economic and financial needs without thought to the more costly socioeconomic and environmental consequences that normally follow. Where am I going with this? As I have always written, The Federal Government of Nigeria aims to meet 30% of its energy needs by 2030 from coal. What I haven’t said in my writings is that the coal to be used for this proposed generation would not be imported from abroad; they will be mined in Nigeria. If we do not know, coal mining and burning is highly environmentally – air, water, soil polluting. Particulates and chemicals that are released into the environment include Sulphur dioxide, Nitrogen oxides, Hydrogen Chloride, Hydrogen Fluoride, Arsenic, Cadmium, Mercury, Dioxin, Chromium, which are all known to be very toxic. A preamble of the devastating effects of coal mining is already being set in Okobo and Itobe communities of Kogi State. But we seem to enjoy going through the cycle of environmental, security, and socioeconomic challenges with managing our natural resources.

In the last edition (Aug-Dec, 2016; Vol.2 No. 3) of Powerwatch, a quarterly publication of the Nigerian Electricity Regulatory Commission (NERC), Dr Abdulsalam Yusuf, an editorial board member of the publication did a good job of highlighting the energy potentials of coal power for Nigeria and the challenges it faces with securing financing – which are all sector wide established facts. However, Dr Yusuf failed to mention that coal power comes at huge costs. I would have ignored this, but coming from an official publication of the sector utmost regulator, it should be an issue of grave concern to stakeholders and the general public who will get to face and bear these consequences when they finally come. In my November 30 publication titled “The impatience with grid electricity and our energy future”, I asked some questions which should form the basis our debate and dialogue on the coal power. “…2.) How prepared are our regulatory agencies especially the environmental agencies to ensure that the operations of this sector [coal power] comply with world best practices. 3.) What are the assurances that coal mining in host communities around the country will be protected from the toxic environmental [hazards] – air, water, soil pollution [which are] evident with coal mining, as is already the case in Okobo and Itobe communities in Kogi State. 4.) How prepared are the government and mining companies to solve the socio-economic, health challenges and possibly social unrest that may arise from the devastation in these communities?” As things are currently, the answers to questions 2 and 3 are obvious; the Niger Delta experience is a case study. The answer(s) to question 4 is relative considering the strategy that government, mining and coal power companies may decide to solve these problems when they arise. But before they do, this debate on coal power is due for an extensive public debate, and importantly a federal legislative hearing, so that the facts on coal power can be presented by all sides of the divide. We hope to start pushing for these policy making processes in the coming year. Nigeria can’t afford to continue taking chances with its future when there are many better and proven alternatives. I will not be weary of writing on these issues or demanding for a robust sector public dialogue until a clear and holistic path of our relationship with coal is established.

Earlier this month, it was reported that the immediate past Minister of Power, Prof. Chinedu Nebo and his engineering team invented an innovative fuel-efficient power generation system named ‘power-seed web machine’ which was presented to the Minister of Science and Technology, Dr Ogbonnaya Onu during a courtesy visit.  Prof Nebo stated that the machine is built to utilize only 20% of the amount of fuel needed by power generating systems to generate a kilowatt hour. Of interest to me is that Prof. Nebo said that the machine which has been test run would soon be deployed to select tertiary educational institutions in Nigeria to help meet their energy needs for one year before its commercialisation. This is a positive energy sector engineering – scientific and technological development which Dr Onu acknowledged and further pledged government’s support in protecting the invention and copyright abuse. Government’s support should not be limited to protecting the invention but also providing the enabling environment for inventions such as this to grow, successfully reach commercialization, wide adoption and diffusion. As I stated in a previous article (December 14 publication) titled “Scientific, technological and innovation capabilities required for an efficient energy system”, I listed amongst others that “education policy that aligns with development plans, foresight, right system regulation, technological spaces/platforms for interaction on various levels, use of demand stimuli – procurement to push for supply improvements and innovation, increasing capacity to absorb and use knowledge, building regional and sectoral systems of innovation, stimulating entrepreneurship and incubators” are required for Nigeria’s energy sector to become efficient.

The proposed plan by Prof. Nebo to deploy the fuel-efficient machines to select tertiary educational institutions is a good step in the right direction. However, this should not end with deployments to serve the institutions. Careful steps should be taken in collaboration with the team, institutions, and ministries of education, science and technology, power, petroleum resources to set up structures to engage in more in-depth and broad research and development on these technology and other related technologies, and capabilities to absorb and use knowledge across other sectors and ultimately develop a strategic niche management approach that will lead to a successful diffusion of this machine and other innovative sustainable technologies. I believe that the technical experts and administrators at these ministries understand these issues and will take the opportunity.

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

 

The new research agenda for achieving universal energy access

By Okafor Akachukwu 03/01/2017

energy-access

In the September 2015, the United Nations adopted a set of seventeen global development goals called Sustainable Development Goals (SDGs) which set out the development priorities that the global community should pursue. While each of these goals has its importance, the actualization of the seventh goal – universal access to affordable and clean energy is may hold the key to the actualization of the other goals as globally adopted. According to the 2016 World Energy Outlook by the International Energy Agency (IEA), achieving universal energy access by 2030 will require a total investment of nearly $1 trillion ($979 billion), that is, an estimated average of $49 billion per year (from 2011 to 2030). In addition, $30 billion per year on average will be required to provide universal access to electricity by 2030, while another $3.8 billion per year will be required to achieve universal access to clean cooking by 2030. This is a very huge financial investment, which by no means is all that is required to achieve universal energy access. Financial mechanisms, risks instruments, market creation, development and structuring are amongst other success-determining factors. Other forecasts such as population growth by 2030 means that interventions have to be properly targeted demanding a departure from the approach of business as usual in design, development, deployment, and implementation of energy systems and/or projects.

Departure from business as usual will require focused and committed political will to address issues of energy sector governance as well as creation of enabling environments for technology development and adoption – both of which necessitate interdisciplinary approaches that cut across various technologies and distribution systems, business service delivery models, political economy issues, cultural attitudes, and social behaviour challenges. This also involves significant capacity building as well as innovative approaches to regulation, policy, and planning. According to a letter by Benjamin Sovacool, Morgan Bazilian, and Michael Toman published in Environmental Research Letters and titled “Paradigms and poverty global energy access policy: research needs for achieving universal energy access”, research, analytics, information dissemination, and knowledge sharing will be critical to successful transition and transformation to universal sustainable energy. If set these are set as the basis of a research agenda, Sovacool and his co-authors argued it will improve the potential to deliver universal sustainable energy access with economic, social and environmental benefits. They stated that new research agenda must be “cross-cutting” and organized “around problems rather than disciplines”. This points to the need for an interdisciplinary approach that is critical, integrated and holistic in solving the problems in today’s dynamic world. Long gone are the days when energy or electricity problems and design and implementation of grid infrastructure were approached from only a technical engineering perspective. Today, the delivery of successful and efficient energy system requires that a wide range of important system elements and component factors – political, legal, economic and financial, socio-cultural, environmental, demographic, business, psychological, and public health are critically, collectively and synchronously considered. Research must no longer be carried out in only disciplinary clusters but in interdisciplinary clusters. Knowledge produced from disciplinary clusters can never have complete knowledge or understanding of a system and will be skewed based on the viewing perspective of the discipline.

While Sovacool and team agreed that some research work in the energy studies and policy fields have begun to explore some of the research approaches suggested, however it argued that in current literature, one of the weaknesses of this approach is the prevalence of a “relatively narrow national or regional focus, with many studies investigating an isolated case or small sample of (national or subnational) case studies, or limiting themselves to a particular region such as Asia or Sub-Saharan Africa”. They cannot be more correct. This is a problematic and flawed approach to having a broad and deeper understanding of factors and elements of a system that constrain or enable and accelerate access to energy services especially at different levels, scales and geographies – across continents, regions, nations and states. It only tells a narrow, unbalanced and incomplete story of a system in a particular geography without providing lessons that may be useful to such a system or others. Comparative analysis and mixed method approaches are better suited to understand the system in ways that help learning outcomes to be useful to projects across different levels, scales and geographies. For instance, investigating lessons that are useful for adoption and diffusion of energy products and solutions across different geographical regions – say in Asia, Africa and Latin America can only be investigated using a comparative and mixed method approach. While carrying out a research work to understand the factors that impede the adoption of low carbon technologies (improved efficient cookstoves) in Nigeria – I designed my research to investigate cookstove projects in China, India, East Africa – Kenya, and then Nigeria. The aim was to understand the structure of the cookstove project design, administration and implementation, and also understand how closely these were centered or organized around people – local communities, users/adopters of these cookstoves as well as how access to resources and raw materials for these projects contributed to the different project outcomes. The research effort was able to draw out how projects can be more people centered and not technology centered if it will succeed. It highlighted the need for energy product design and development to be first locally driven, designed and implemented based on people’s needs and not based primarily on certain technical purposes. This was the principal reason why Chinese National Improved Stove Project (NISP) was a success with over 144 million stoves adopted by 1994 for a project that was implemented from 1982-1992. The project is still the only large scale successful improved cookstove project in history. Similar projects in India have not had such success even with enormous resources invested into them – the same applies to projects in Africa, Asia, Latin America and elsewhere.

Another challenge highlighted is the weakness of “focusing only on a particular energy technology (such as cookstoves, solar home systems, or micro grids), rather than a complete bundle of systems or, better yet, energy services rather than technologies and fuels.”  The point being made here is that to achieve sustainable universal energy access, interventions for the poor – unserved and underserved – and research have to be viewed in terms of real services that meet the different energy needs of the population rather than singular product or technologies or fuels. In a typical rural household, energy is needed for cooking, heating, lighting a bulb – where available, drying, processing farm produce. Yet the focus of most energy access projects and research has been on how these individual products, technologies and fuels meet a technological purpose rather than a focus of how one of them or a group of them are effective in meeting entire energy system service needs. Also current approaches usually do not give thought on how to link that energy service provision to the development of energy infrastructure. Another way I choose to look at this is from an energy conversion and utilization perspective. For instance, how can some of the energy produced by improved efficient cookstoves be harnessed and converted to power light bulbs, provide heating, hot dry air for drying farm produce and other household energy needs? Or how can energy supplied by solar panels or solar home systems be used for other services such as cooking, heating, drying, processing? This approach would not only prove to be cost effective in terms of reducing costs of business as usual approach to individual product technology, or fuel project implementation and research costs but also deliver more effective results on reaching more populations that need to access electricity, energy for cooking, heating, processing over a short time. It sounds easy on paper – there is no doubt that working it out will require tremendous work/changes in terms of new policy, technology and project designs across different disciplines and sectors –that is, the broad interdisciplinary perspectives of the system that understand the multidimensional, socio-cultural and technological challenges that energy systems are situated in.

Sovacool and colleagues’ letter suggests that research programs should be organized around six groups of questions. Firstly, “how do we best measure, track, and improve data and planning for sustainable energy access?” Second, “under which circumstances can particular technological configurations successfully deliver sustainable electricity access? – what scale should energy access interventions be best implemented? What types of partnerships and business models can accelerate access?” Third, “what sort of ‘tipping points’ might there be for dramatically scaling-up modern cooking, heating, and cooling, and what policies would be needed to support such transformations?” Fourth, “how do current and prospective developments in fossil fuel resources, technologies and markets affect widespread sustainable energy access?” Fifth, “how do we better address linkages with other sectors such as health, water, food, and education?” Sixth, “what are the most compelling societal co-benefits to investments in energy access?” These are broad research agenda questions that require deep understanding of the energy system and interdisciplinary collaborations across scales and geographies for useful results to be learned. The impact of research outcomes based on these questions and the proposed approaches cannot be overestimated, considering the benefits and the positive impact recorded from shifts in the approaches of energy access projects from the 1970s to date- from donor supported – homogenous, technical, individual product/fuel focused project approach in the 1970s, to market creation – heterogeneous, technical, double technology/product focused approach that started 1990s, to the current “sustainable energy” – polycentric, sustainability, multiple, integrated energy technologies/products/fuels, people needs focused approach that started in the 2000s.

For an improved and more effective sustainable energy approach that will achieve universal energy access, Sovacool and colleagues maintain that new research must focus on providing information that is relevant to developing countries, and that can foster innovative approaches to widespread sustainable energy access. Collaborations must be pursued across the international research community/institutions – universities, think tanks, development banks, United Nations organizations, and other development organizations. These require increased learning and exchange programs for key stakeholders including local communities, networks, groups and associations. Effort must be made to share, disseminate and effectively communicate research outcomes promptly and widely to every sector that it will benefit. For instance, many in the academic and development community are ignorant of Chinese NISP’s key success factors. It is not until recently that research collaborations between Chinese universities and research institutes and other universities outside Asia (Europe, America and Africa) started that Chinese methods and approaches of achieving success in projects started to be understood and appreciated. There is also 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 – 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 have to be inclusive, and open to the participation of non-experts and energy users. This is a key factor for achieving the Sustainable Development Goals objectives of reducing inequalities, and social injustice especially the poorest and marginalized groups and communities that do not have access to energy required for domestic and processing needs. 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. In essence, energy access projects and research efforts must be more appropriate to reflect the magnitude of needs on ground and the urgency that we have announced that is required to meet these needs.

Article is republished with permission by The Initiative for Policy Research and Analysis (InPRA) where it was first published.

Okafor Akachukwu is the Editor, Energy and Environment, 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