The Nigerian Association of Energy Economics (NAEE) has said that Nigeria cannot industrialise her economy by continuing to rely on electricity from fuel generators to power industries, offices and homes.
It said in Abuja that the country’s continued reliance on fuel generating sets was an aberration, adding that economies with serious desires for industrialisation do not rely on fuel generators but reliable and cost effective energy sources and systems.
Speaking at a press briefing to mark the 2017 edition of the annual World Energy Day, the President of NAEE, Prof. Wumi Iledare, stated that at the moment, most countries were beginning to transit from fossil based energy generation to clean energy sources, while Nigeria remained fixated on fuel generating sets that are expensive and unhealthy to the environment and human beings.
Iledare, who was represented by a former president of the association, Prof. Adeola Adenikinju, at the briefing, said it was time for Nigeria to move against the use of fuel generators and prioritise investments in clean energy sources.
He noted that global reliance on energy from fossil fuel sources was waning and Nigeria should take advantage of that to drive investments to hydro, solar, and other clean energy sources.
“It is an option but it is not the best, and as a country, we should look at the best options and I don’t think fuel generators are what we should consider.
“Nearly 15 years after electricity sector reforms began, and in spite of the various institutional changes, regulatory and policy reforms that have taken place, as well as the billions of dollars of public and private investment that went into the power sector, electricity sector remains seriously challenged in Nigeria.
“The entire segments of the value chain are bedeviled with one problem or the other. Both the formal and the informal sectors continue to run on private generators, with attendant avoidable huge economic and non-economic costs,” said Iledare.
He explained: “Several countries, leveraging on the productivity growth impact of energy access expansion have moved significant number of their people even in rural and remote areas out of poverty. China is a good example we can borrow from.
“The energy investment-GDP ratio is too low and inefficiently allocated to support the energy infrastructure that the country requires to drive sustained economic growth. Hence, the fall back solution that we have adopted cannot even be ranked as second best solution, because it is totally unacceptable and incompatible with global energy transition.
“The recourse by energy consumers in the industrial, commercial and residential sector to fossil fuel fired private generators, many of which are old, energy inefficient and major sources of noise and air pollution must be phased out in timely manner as reliable, affordable and modern energy sources become available. We should also no longer tolerate the significant health risks that the use of traditional biomass in the residential and commercial sectors for energy services like cooking, lighting, water heating, impose primarily on our women and children.”
He stated that NAEE was not unaware of the present economic and resource constraints the federal government has to contend with, but that a scale of preferences and priorities must be set and choices made.
“Hence, we will advise that in prioritising government investments, access to adequate, reliable, and affordable modern energy should rank as top priority. It has been estimated that between 2017 and 2020, Nigeria government will need over $1.6 billion to develop or complete critical infrastructure in generation, transmission and distribution of power and another $14 billion to start and complete critical projects in the oil and gas sectors.
“However, the good thing is that with the right incentives and policies, implementation of pro-market policies, the private sector can take a large chunk of these investments off the government. However, the issue of credibility and seriousness of government is very important. Perhaps also is the political will to let go some decrepit downstream, assets,” he added.
Iledare, equally said to provide universal electricity for all, decentralised systems, led by solar photovoltaic (PV) in off-grid and mini-grid systems, are becoming prominent.