COMMUNIQUE ISSUED AT THE END OF A TWO DAY STAKEHOLDERS WORKSHOP ON REVIEWING THE NIGERIA ENERGY TRANSITION PLAN, HELD IN LAGOS, NIGERIA, OCTOBER 18, 2023, ORGANISED BY THE RENEWABLE ENERGY ASSOCIATION OF NIGERIA, REAN.
BACKGROUND
Renewable Energy stakeholders convened on Wednesday 18th October 2023 at Westwood Hotel in Ikoyi, Lagos, Nigeria to review and deliberate on the Energy Transition Plan (ETP) and its implications for Nigeria’s sustainable energy future. The workshop was organized by the Renewable Energy Association of Nigeria (REAN), with support from Heinrich Boell Stiftung. It was a hybrid event thus there were in-person and online participants in attendance. The theme of the workshop was ‘ Charting the Path to a Sustainable Energy Future for Nigeria: Reviewing the Energy Transition Plan’.
The workshop had a total number of 74 participants ( 28 online and 46 in-person). Out of these, 22 participants were female while 52 were male. The participants included a wide array of renewable energy stakeholders and delegates from government offices; the private sector, development partners, sector associations and REAN member companies. The Nigeria Energy Transition Office/SEforAll also played a huge and vital role at the event by giving a tone-setting presentation on ‘Understanding the Energy Transition Plan and Its Provisions’.
Prior to the workshop, REAN had launched a sector-wide survey among RE stakeholders to ascertain their perception and involvement with the Energy Transition Plan. The result of this survey, at its completion, was presented to all stakeholders who were present at the workshop. Discussions on the survey findings also formed a vital component of the workshop. The responses gathered from this survey will further assist REAN in strengthening its advocacy efforts, expanding
renewable energy stakeholders’ participation and providing guidance to decision-makers, especially the Energy Transition Office, to develop well-informed and actionable strategies in implementation and achieving the ETP targets by 2060.
The workshop also included a break-out session for stakeholders’ deliberation on the ETP as a tool for RE expansion. Participants were divided into 3 groups to hold discussions under the following headings:
Group 1 – Financing and Fiscal Incentives
i. Financing the Energy Transition Plan (or RE Expansion Plan): local financing options vs international financial spaces – dollar vs local currency – exploring African Markets.
ii. Addressing Issues around Taxation, Duties and Bureaucracies in Imports and Bids
Group 2 – Mini-grids & Policies
i. Mini-grids Expansion Plan: How do we move to market and unlock it?
ii. Policy and Business Environment: How do we ease the interactions?
Group 3 – Solar and Clean Cooking
i. Solar Market for Stand Alone Solar/Roof Top: User & Solution Provider Challenges.
ii. Clean Cooking Reality: User & Solution Provider – unlocking the challenges for LPG and Efficient Stoves.
OBJECTIVES
As a follow-up activity to the REAN stakeholders’ dialogue (last year) on ‘Understanding the ETP’, this Renewable Energy ETP Stakeholder Workshop aimed at:
Reviewing Nigeria’s Energy Transition Plan (ETP) for the years 2023 -2060 considering its ambitious objectives and the collaborative efforts required from all stakeholders, including government bodies, industry experts, environmental advocates, and community representatives.
Enhancing stakeholders’ understanding of the provisions of the ETP through a presentation by the Energy Transition Office.
Presenting and discussing the findings from the Stakeholder Perception Survey on the ETP & Sector Needs.
Engaging in group discussions on various facets of the ETP, including financing, mini-grid expansion, policy and business environment, stand-alone solar/roof-top solutions, and clean cooking.
To set forth an energy transition action plan that will guide the new government in effective implementation of the ETP and in achieving net-zero emissions by 2060.
Identifying necessary actions needed to unlock the energy sector while exploring innovative financing solutions to bridge the funding gap and providing recommendations for ensuring equitable access to clean energy.
Facilitating discussions on the next steps to bring about a sustainable energy future for Nigeria and ensure increased renewable energy adoption and growth in the sector.
During the renewable energy stakeholders ETP workshop, participants made key observations on core issues to be addressed should Nigeria be serious about the attainment of emission reductions, eradicating poverty, creating jobs, achieving increased access to reliable energy, addressing Nigeria’s net zero commitments and promoting a fair, just, inclusive and equitable energy transition. From the presentation by the Energy Transition Office, presentation of survey findings and the group discussions, the following are the key observations :
1. The Nigeria Energy Transition Plan was initially created with a 2050 net-zero target. However, given the significant financial, social and technological requirements, the government concluded that a more realistic pathway to deep decarbonization would land on 2060.
2. The Nigeria ETP sets out a timeline (2023 – 2060) and seeks significant emissions’ reduction across 5 key sectors: Power, Cooking, Oil and Gas, Transport and Industry. Within the scope of the ETP, about 65% of Nigeria’s emissions are affected.
3. A lot of funding is needed to finance the ETP. Nigeria needs a total of $1.9 trillion to get to net zero by 2060. This translates to about $10 billion annually. Since the government cannot boast of such financial reserves, it is expected that a bulk of the funding for our transition to net zero will come from the private sector.
4. The Energy Transition office is working with the Africa Renewable Energy Manufacturing Initiative by supporting the local manufacturing of solar panels, batteries and inverters to promote local content and foster an increase in the adoption of RE solutions via reduced importation upfront purchase costs.
5. Besides emissions reduction, the ETP seeks to lift up to 100 million Nigerians out of poverty, create jobs and drive economic growth. It also creates significant investment opportunities such as the establishment of industries related to solar energy, hydrogen and electric vehicles.
6. Achieving Nigeria’s climate ambitions and energy needs requires strong partnerships and coalitions. Therefore, the Energy Transition office is supported by Sustainable Energy for All (SEforAll), the Rockefeller Foundation and the Global Energy Alliance for People and Planet (GEAPP).
7. From the survey results, there is broad recognition of the importance of the ETP, and stakeholders applause of the composition of its plans, ideas and strategies. However, more stakeholders claimed that there was a lack of stakeholder involvement in the development of the Energy Transition Plan. It is expected that there will be more engagement and stakeholder involvement going forward.
8. Multiple stakeholders, including government and the private sector, are showing varying levels of commitment to the plan. There is need for continuous efforts to raise awareness and work towards policy actualization.
9. The ETP aligns with global trends towards clean energy and net zero actualization. Its trends toward renewable energy adoption and the availability of raw materials are seen as favorable. However, there is a crucial need for clarity in implementation plans, the inclusion of stakeholders, and job creation opportunities.
10. While the implementation of the ETP is deemed feasible, stakeholders believe there is currently a lack of collaboration with industry players and thus it requires more engagement and practicality.
11. There are concerns about inadequate government policies supporting the ETP today. Implementation strategies are yet to be seen, raising uncertainty, there is also lack of monitoring and evaluation. Stakeholders are calling for increased transparency and monitoring and evaluation on the ETP.
12. Decarbonization strategies are costly and detached from the reality of low-income populations but transition to renewables will save huge costs in the long run. Nigeria’s heavy reliance on crude oil and other fossil fuels remains a concern but the Nigeria 2023 Electricity Act stands as a beacon of hope since it supports the decentralization of power generation and allows states to now generate their own electricity.
13. From the 2023 Electricity Act, NERC has been given power to oversee the implementation of the Act. It is therefore important for the Energy Transition Office to collaborate with NERC on the provisions of the Electricity Act, to address the issues affecting the Renewable Energy sector while fulfilling the provisions of the Act.
14. There were questions and concerns as to who is really running or implementing the ETP at the moment. Stakeholders believe that there is a dearth of awareness and update in the ETP at the moment especially in terms of financing.
15. Stakeholders are of the opinion that it is development partners who had high involvement in the development of the ETP. There was also a low involvement of research institutions. Therefore, research and development around the ETP are highly important including extensive documentation on how the ETP will be successfully implemented.
16. There is little to no youth participation in energy transition dialogues. There is need for youth inclusion and awareness creation among youths for posterity. If the ETP must stand the test of time, then the Energy Transition Office should also look into youth development, capacity building and inclusion in the implementation of the ETP.
17. There exists good amounts of funds available in investments but there is a huge dearth of technical expertise in the Renewable Energy sector, for the deployment of mini-grids, solar home systems, C&I and clean cooking solutions. The job opportunities and potentials are massive but there is little expertise. Therefore, the Energy Transition office should also focus on capacity building. There should be action plans to start running and delivering on this.
18. Stakeholders, especially RE developers and SHS providers are greatly concerned about issues around product safety, standardization and product proliferation. There is a synergy between peddlers of fake RE components and consumers who want quick and affordable energy solutions as they compromise on quality in a bid to cut costs. This calls for increased enforcement on the use of only certified products in RE projects. Stakeholders emphasized on the need for the Standard Organization of Nigeria (SON) to begin to operate in the RE sector as NAFDAC does in the health sector, to track down defaulters, confiscate their counterfeit components and bring them to book. A new and dedicated regulatory body could also be commissioned to address these issues. REAN is willing to work with SON on driving the enforcement of standards in the RE sector.
19. Majority of current advocacy and empowerment initiatives for clean cooking solutions seem to mostly target rural communities but there needs to be targeted solutions for urban populations as indoor air pollution arising from cooking still exists and poses health risks.
20. While renewable energy alternatives, such as solar power, exist in Nigeria, they remain prohibitively expensive for the majority of the population, particularly those living in poverty. Affordability remains a significant barrier to the widespread adoption of renewable energy solutions. Many entrepreneurs in mini-grid communities still use diesel-powered equipment, despite having access to reliable electricity. This highlights the need for incentives and education to encourage the transition to cleaner technologies.
21. Stakeholders identified the need to address issues surrounding taxation, import duties, and bureaucratic obstacles in renewable energy projects and bids to promote efficiency and attract investments.
22. Policies are important for the effective implementation of the ETP however, it is the stakeholders involved that will uphold and drive them to implementation. This therefore puts a responsibility on all stakeholders to review all existing policies in relation to the ETP, identify areas that require change and articulately advocate for adjustments in these policies.
23. Nigeria’s commitment to achieving net-zero emissions by 2060, as announced during COP26 in Glasgow, is commendable and demonstrates a bold vision for the nation’s energy landscape. The Energy Transition Plan (ETP) outlines a comprehensive strategy, but there is a need for more sector discussions and buy-in from the new government.
24. The Energy Transition office is open and happy to work with stakeholders on the implementation of the ETP. The offices acknowledges REAN’s efforts in engaging stakeholders on the ETP and is will to continue to provide guidance and support as needed.
2nd Group Photograph at the Stakeholders’ Workshop on Reviewing the Nigeria Energy Transition Plan
All recommendations given by focused stakeholders on 5 key areas; policy, access to funding, capacity building/training, sensitization/awareness creation and collaboration. More specifically, the key recommendations from the event are as follows:
1. There is the need for more stakeholder involvement in the updating and implementation process for the Nigeria Energy Transition Plan.
2. There needs to be more conversations around the ETP to create more awareness and to increase stakeholder involvement.
3. The Energy Transition office should ensure more youth participation and industry involvement in their activities. There should be an educational arm to the ETP perhaps by introducing it into academic curriculum at certain levels.
4. There is need for a financing plan for the implementation of the ETP. This will enable stakeholders to understand how they align with the implementation process and what steps they can take.
5. Stakeholders agreed that knowledge sharing will help our actualization of the Energy Transition Plan.
6. The Federal government should support, develop, and implement policies that support financing for renewable energy. There should also be fiscal incentives to support RE markets and uptake.
7. There is a huge need for the enforcement of standards to minimize safety risks and to address standardization issues. Achieving this is dependent on the effective work and functioning of these 3 arms: developers, training institutions and regulators. There is also need for reorientation and
sensitization among consumers teaching them to insist on standards and right procedures for their safety.
8. The government should work towards the effective implementation of all policies that favour energy transition especially the new 2023 Electricity Act. The Ministry of Power and Ministry of Finance should work together to implement favourable policies to support the RE sector and the ETP.
9. Renewable energy stakeholders need to engage with policy makers to discuss favourable measures to aid the growth of the RE sector e.g Green Climate Funds.
10. On access to funding, there is need to identify and engage with potential funding organizations. The government should seek partnerships and forge alliances with development partners (e.g DFID, USAID) to secure funding for ETP implementation. There should also be a robust institutional framework to guide financing for the ETP.
11. The Nigerian government should work towards policy continuation. When one government leaves office, existing policies should not become obsolete, rather there should be continued effective implementation. To achieve this, the government can set up robust institutions that will drive policy implementation. This will help alleviate policy somersault.
12. The Energy Transition Office should work on derisking financing options e.g the Dollar-Naira changes, and other issues around import duties and taxes. A special reference was made to Rwanda and Kenya with only 0.5% import duties.
13. REAN should advocate for the Federal Government to partner with relevant stakeholders in the industry to encourage break-in.
14. There is need to educate and build the capacities of everyone in the RE value chain – manufacturers, developers, installers, end-users, policy makers, and enforcement bodies, on the creation, manufacture, use and maintenance of standardized RE products.
15. REAN should work with the standard organization of Nigeria to drive the enforcement of standards in Nigeria’s RE sector.
16. General sensitization is important for end-user communities, especially rural communities, on the concept, importance and benefits of energy transition.
17. Efforts should be made to make renewable energy solutions more affordable and accessible to the general population. This may involve concessional financing for emerging players, as well as policies and regulations that reduce the final consumer costs.
18. The government should work with stakeholders to develop and implement strategic action plans that align with the Energy Transition Plan. These plans should address the funding gap and the transition to cleaner energy sources.
19. To encourage the adoption of clean cooking solutions, efforts should be made to address user and solution provider challenges, ensuring the affordability and accessibility of LPG and efficient stoves.
REAN to disseminate the communique to relevant MDAs, and institutions as well as all participants, and follow up on their actions.
REAN to organize a media/press briefing/press release to present the communique to the general public.
REAN should continue to engage with the Energy Transition Office and should continue to build stakeholders’ trust by facilitating effective communication on the ETP.
REAN to work with HBS to organize similar conferences that bring together renewable energy stakeholders, to review the implementation progress and impacts of the ETP.
The Energy Transition Office should develop a report detailing next steps on the implementation of the ETP.
REAN to establish relationships with learning institutions, especially tertiary institutions, and embark on awareness creation and campaigns , to enlighten and equip youths with the knowledge of energy transition, its importance and implications.
REAN to continue to advocate for the implementation of favourable RE sector policies, especially for issues around taxation and fiscal incentives. Engage each relevant government MDAs to understand the challenges in implementing the needed sector policies.
The Energy Transition Office should regularly review and update the Energy Transition Plan to ensure it remains aligned with the nation’s energy and climate goals.
CONCLUSION
In conclusion, based on the open declaration by the Nigeria Energy Transition office, the ETP is a working document to be used to achieve energy transition in Nigeria over a period of 3-4 decades (2023-2060). As such, its components and provisions can be reviewed and updated as required and as development advances. Therefore, the Energy Transition Office is open to receiving inputs, feedback, and observations from stakeholders to aid the effective implementation of the ETP and to achieve a just energy transition for all.
