FAST TRACKING THE PARADIGM SHIFT FROM FOSSIL FUEL DRIVEN ECONOMY TO RENEWABLE ENERGY: A CLARION CALL TO NIGERIAN MECHANICAL ENGINEERS By Late Dr Maikanti Baru FNSE, FNIMechE (2018 NIMechE MEDL)
Protocol
1. I am most delighted to be in the midst of my esteemed professional colleagues and other key stakeholders and players in other spheres of economic life to deliver the 12th Distinguished Lecture of our dear Institution – The Nigerian Institution of Mechanical Engineers.
2. This annual event provides a forum for interaction with professional colleagues and members of the other professions in the public and private sectors of the Nigerian economy, to share thoughts, experience and perspectives on topical issues relating to the practice of our noble profession in relation to the socio-economic transformation of our dear Nation.
3. The theme of this year’s lecture “FAST TRACKING THE PARADIGM SHIFT FROM FOSSIL FUEL DRIVEN ECONOMY TO RENEWABLE ENERGY: A CLARION CALL TO NIGERIAN MECHANICAL ENGINEERS” is apt considering the dynamism of the energy landscape. The energy competitiveness map of the World is evolving, rapidly affecting countries, companies and consumers alike.
4. It is my hope, that my thoughts and perspective at this auspicious occasion will stimulate thoughts and inspire confidence of both up-coming and practicing Mechanical Engineers and other members of the public on the critical role of mechanical engineering in building our dear Nation.
5. In the course of delivering this lecture, I will present:
o A cursory analysis of the global energy scenario, critical drivers and uncertainty.
o A brief appraisal of Nigeria’s energy resources.
o The Gains of migrating from an energy intense economy to an energy efficient economy.
o The Development of renewable energy in Nigeria.
o The role and giant strides of NNPC in renewable energy.
o A clarion call to Nigerian mechanical engineers on renewable energy development for our Nation’s energy sufficiency, job and wealth creation.
The Global Energy Scenario – Critical Drivers and Uncertainty
6. Ladies and Gentlemen, It is an indisputable fact that Energy plays a critical role in facilitating improved living standards around the World.
7. The Global energy consumption entails all energy harnessed from every energy source applied towards human endeavours across every sector in every Country. Being the power source matrix of civilisation, World Energy consumption has deep implications on all spheres of human life.
8. Recently, the International Energy Agency published its World Energy Outlook tagged “the World in Transformation” where It highlighted four large-scale shifts in the global energy system:
o The rapid deployment and falling costs of clean energy technologies: The growth in solar PV capacity in 2016 was larger than for any other form of generation since 2010, costs of new solar PV have come down by 70%, wind by 25% and battery costs by 40%.
o The growing electrification of energy: Spending by the World’s consumers on electricity approached parity with their spending on oil products.
o The shift to a more services-oriented economy and a cleaner energy mix in China. China’s role as the World’s largest energy consumer is being reaffirmed with the installation of over 50,000MW new Solar PVs in 2017 alone. China is also leading the charge towards a renewable future. The Country’s total spending topped US$100 billion by 2015, which accounted for over a third of the total global investment. Other Countries also saw significant increases in their green investment from 2014 to 2015.
o The resilience of shale gas and tight oil in the United States, cementing USA’s position as the biggest oil and gas producer in the World even at lower prices.
9. A further cursory stocktaking of the global energy resources also indicates the following:
o E-storage has witnessed unprecedented changes due to reduced batteries costs and increased industry requirement to manage system volatility.
o Marine: 500MW of commercial marine energy generation capacity is in operation and another 1,700MW is under construction, with 99% of this accounted for by tidal range.
o Uranium and Nuclear: Global uranium production increased by 40% between 2004 and 2013, mainly because of increased production by Kazakhstan, the World’s leading producer. As of December 2015, 65 nuclear reactors were under construction with a total capacity of 64,000MW. Currently, there are more than 45 Small Modular Reactors under development and four Reactors under construction.
o Waste-to-Energy: Despite the fact that Waste-to-Energy (WtE) occupies less than 6% of the total waste management market, the global WtE market was valued at approximately US$25billion in 2015 and is expected to reach US$36billion by 2020. The emerging prospects of the Waste to Energy market also demonstrate its viability as a sustainable energy resource in the coming decade.
o Hydropower: Hydropower is the leading renewable source for electricity generation globally, supplying about 71% of all renewable electricity at the end of 2015. The global hydropower capacity increased by more than 30% between 2007 and 2015.
o Oil: Oil remained the World’s leading fuel, accounting for 32.9% of global energy consumption. Roughly 63% of oil consumption is from the transport sector. Oil substitution is not yet imminent and is not expected to reach more than 5% for the next five years. Unconventional oil recovery accounts for 30% of the global recoverable oil reserves and oil shale contains three times oil as conventional crude oil reserves, which are projected at around 1.2 trillion barrels.
o Natural Gas: Natural gas is the second largest energy source in power generation, representing 22% of generated power globally and is the only fossil fuel whose share of primary energy consumption is projected to grow.
o Wind: Global wind power generation reached 432,000MW in 2015, around 7% of total global power generation capacity (420 GW onshore, 12 GW offshore). A record of 63 GW was added in 2015 alone and total investment in the global wind sector was US$109 billion in 2015.
o Coal: Coal production decreased with 0.6% in 2014 and with a further 2.8% in 2015, the first decline in global coal production growth since the 1990s. Coal still provides around 40% of the World’s electricity. However, climate change mitigation demands, transition to cleaner energy forms, and increased competition from other resources are presenting challenges for the sector.
o Carbon Capture and Storage: Carbon Capture and Storage (CCS) is an essential element of any low carbon energy future and industrial future, but policy remains the main issue, not technology. There are 22 large-scale CCS projects currently in operation or under construction around the World, with the capacity to capture up to 40 million tonnes of CO2 per year (MTPA).
o Geothermal: Geothermal global output is estimated to be 75 TWh for heat and 75 TWh for power, but is concentrated on geologic plate boundaries.
o Bioenergy: Bio-energy is the largest renewable energy source with about 14% out of 18% renewables in the energy mix and supplies 10% of global energy supply.
10. Looking into the future, OPEC envisages that by the year 2040:
o The size of the global economy is estimated to be over 200% that of recent years and developing countries will be responsible for 75% of this global GDP growth.
o Growth in the World is driven by increased energy utilisation. Total energy demand is expected to increase by 96 million barrels of oil equivalent per day by 2040.
o Globalisation has fostered cooperation across borders and will continue to erase barriers hindering trade.
The International Energy Agency (IEA) also forecasts that:
o Most of the increase in energy demand is expected to come from non-OECD Countries, where strong economic growth, increased access to marketed energy, and growing populations lead to rising demand for energy.
o Natural Gas will grow faster than oil and coal over the next five years, helped by low prices, ample supply, and its role in reducing air pollution and other emissions.
o Gas markets are approaching saturation in many parts of the developed World, but consumption continues to grow in the United States.
o Many countries are reforming their gas markets to increase the use of gas and to attract new investments.
o By 2022, global renewables electricity generation is expected to grow by more than one-third to over 8,000 terawatts per hour, equal to the total consumption of China, India and Germany combined.
o Wind and Solar together will represent more than 80% of global renewable capacity growth in the next five years.
o Biofuels remain the champion of renewables in transport while the share of electric vehicles grows. The share of renewables in road transport is expected to increase only marginally, from over 4% in 2016 to almost 5% by 2022.
These developments necessitate that Countries strategically maximise the benefits of their endowed energy resources for socio economic growth and development.
An Appraisal of Nigeria’s energy resources
11. Nigeria is blessed with bountiful energy resources. As at January 1, 2018, the Nation boasts of 36.18 billion barrels of proved and probable crude oil and condensate reserves. The Country is also blessed with significant 2P natural gas reserves of 199 Tcf.
12. This resource base is quite sufficient. However, according to the Energy Commission of Nigeria; fuel wood use represents the most widely exploited energy resource in Nigeria. That is about 37% of households use fuel wood for cooking, drying and heating and as we are aware, the use of fuel wood comes with the attendant issues of deforestation, erosion and health.
13. The share of natural gas in Nigeria’s energy mix is increasing with growth in the number of gas-based power plants. Hydropower also provides over 20% of the present energy demand in the Country but the non-petroleum sources provide only 5% of our present energy demand and despite the significant coal deposit in Nigeria, the consumption of coal is almost insignificant.
14. From the foregoing, it is imperative to improve our energy supply sources and infrastructure in order to meet the demands of our growing economy and population and also to achieve the current Administration’s aspiration of diversifying our energy mix and attaining domestic energy sufficiency.
The Gains of migrating from an energy intense economy to an energy efficient economy
15. Energy intensity has a direct relationship with the amount of emitted greenhouse gases because most of the energy used to drive the global economy comes from fossil fuels and this has an impact on climate change.
16. The measure of the amount of energy that is used per unit of gross domestic product is known as the energy intensity, and it is an important indicator of the progress Countries are making in tackling climate change.
17. As Countries use less fossil fuel and become more efficient with their energy use, carbon emissions will also fall and the global economies will become less energy intense.
18. Globally, there is a compelling case for Industries, Consumers and Governments to power more economic and domestic activities with less energy. The deployment of energy efficiency represents about 40% of the greenhouse reduction potential and there have been clear successes in terms of adopting energy savings appliances.
19. Research by McKinsey Global Institute reveals that developing Countries have huge opportunities to strengthen their economic prospects by boosting their energy productivity.
20. Companies that pioneer energy efficiency in their home markets will be well placed to create a leading position in the global market for “green” products and services. In fact, the research indicated that about 65% of available positive return opportunities to boost energy productivity are domiciled in developing regions.
21. Despite a growing global economy, the International Energy Agency in 2015, reported a non-increasing trend in global greenhouse emission due to the following reasons:
o More electricity was produced from ‘renewables’ and natural gas than ever before and energy is being used more efficiently.
o The decline in energy intensity is driven by a variety of factors, ranging from structural changes in economies from more intensive to less, efficiency gains such as:- fuel efficiency standards, to consumer behaviour — using energy differently; more efficient buildings, vehicle engines and power plants. These are reducing how much energy is consumed per person globally.
22. Thus, there is need to promote further policy incentives that will fast forward the transition away from fossil fuels if we are to achieve global warming mitigation standards.
23. Hence by refocusing policies and deploying appropriate strategies, developing Countries like Nigeria can considerably reduce energy demand without impairing economic growth.
The Development of Renewable Energy in Nigeria
24. Renewable energy is the energy that comes from resources that are not significantly depleted by their use, such as sunlight, wind, rain, tides, waves and geothermal heat. This energy type is gradually replacing conventional fuels in four distinct areas namely: electricity generation, hot water/space heating, motor fuels and rural (off-grid) energy services.
25. At least 30 Nations around the World already have renewable energy contributing more than 20 percent of their energy supply. The year 2015 was most significant for renewable energy technology development as it was the year the Paris Agreement – a framework to deal with greenhouse gas emissions mitigation and adaptation was adopted by a consensus at the United Nations Climate Change Conference.
26. The need to mitigate energy insecurities caused by crude oil price volatilities and ameliorate environmental and health issues has awaken Nations to the worthwhile benefits of developing the renewable energy sector.
27. Prior to the effort made by Nigerian Government to develop the biofuel industry, the Energy Commission of Nigeria through its National Energy Policy framework set up a rolling plan; to effectively harness non-fuel wood biomass energy resources and integrate them with other energy resources; and promote the use of efficient biomass conversion technologies.
28. However, to cater for a more detailed and comprehensive policy framework, a more coordinated effort of the Energy Commission of Nigeria was initiated to articulate yet another policy document on Renewable Energy Development in Nigeria known as the “Renewable Energy Master Plan” in November, 2005.
29. The Renewable Energy Master Plan has the objective of:
· expanding access to energy services and raising standard of living especially in the rural areas
· stimulating economic growth, employment and empowerment;
· increasing the scope and quality of rural services;
· reducing environmental degradation and health risks, improving learning, capacity building, research and development in renewable energy technologies; and
· Finally, provide a road map for achieving substantial share of the national energy supply through renewable energy technology interventions.
30. It is noteworthy to mention that only a scanty remark of solar and bio-energy resource development was made in the Renewable Energy Master plan, in contrast to other renewable energy technologies (such as: hydro, wind, geothermal and tidal energy resources). This is oblivious of the recorded contributions of bio-energy to the Gross Domestic Product (GDP) of Nations such as; Brazil, Malaysia and India.
31. For instance, in Brazil, 25 billion litres of sugarcane-based ethanol are produced each year, and this translates into revenue earnings of about US$30 billion per year and constitutes about 5% of the Nation’s GDP. The Brazilian bio-ethanol project accounts for 1 million jobs, promotes the production of flexible fuel car technology and also plays a part in the energy supply-mix that generates substantial capacity of electrical power for the Country.
32. This remarkable Brazilian phenomenon underscores the importance of bio-energy development to the economy of a Nation and should provide a smooth learning curve for Nigeria.
Potential for Renewable Energy Production in Nigeria
33. Nigeria has vast potentials for renewable energy development. These include:
a. Availability of Land:
It is obvious that the Nigerian bio-energy target is achievable due to the size and availability of useable arable land. Nigeria’s total area is 92.4 million hectares out of which 79.4 million is occupied by land and 13.0 million hectares occupied by water bodies. Agricultural land occupies 71.9 million hectares making Nigeria one of the Nations with the highest potential for bio-energy generation in the World. The endless untilled savanna grassland especially of North-Eastern Nigeria could offer unrivalled opportunities for cultivation of energy crops such as Jatropha, Neem trees, Cassava and Sugarcane.
b. Long Hours of Sunshine:
Nigeria is located within a high sunshine belt and solar radiation is well distributed. The annual average total solar radiation varies from about 7.0 kWh/m2/day in Northern regions to about 3.5 kWh/m2/day in Southern parts. At an average of 5.3 kWh/m2/ day, Nigeria has an estimated 17.46 Trillion MJ/day of solar energy arriving over the entire land area. This annual average intensity translates to about 27 times that of the Country’s total fossil fuel resource and it is over 115,000 times the current electrical power generated.
c. Large Human and Livestock Population:
According to the National Population Commission’s estimates, there are about 198 million people living in Nigeria today. A survey of livestock manure production conducted by the Federal Ministry of Agriculture puts the manure production estimate at 285.1 million tonnes annually. To this effect, the prominence given to livestock farming and the teeming human population figures, especially in Northern Nigeria, could be harnessed to generate biogas to power the economy of the region. In addition, plant resources derived from the Nation’s forest and grassland could also provide feedstock for solid biomass and biogas plants.
d. Abundance of Municipal Solid Waste:
Biogas production technologies seem to be exhibiting a growing influence in the energy sector. The availability of large scale commercial farms and plantations, agro-processing industries, abattoirs, restaurants, markets, academic, religious and military institutions in the Country could be transformed into biogas energy stations for factories, homesteads and households.
e. Availability of Running Water Sources:
A study on the prospects for small hydropower (SHP) development for rural applications in Nigeria by Aliyu and Elegba in 12 states and 4 river basins revealed over 278 unexploited SHP sites with a total potential of 734.2 MW. Currently, about 5% of the available SHP capacity is exploited while other sites have been set aside for future development.