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Renewable Energy And The Dilemma of Adoption for Underdeveloped Countries

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You turn the TV and browse your internet feeds; from social media to blogs and news pages, the highlights are all about the ‘green initiative’. Every country is pushing for a cleaner planet and ecosystem, pointing guilty hands at other countries who don’t support the movement. Well, before you point your hands at me, you better calm down and realize that this issue is deeper than just performing climate activism stuns online. Yes, you read correctly

With the oil boom came a fresh hope for countries that were immersed deeply in poverty. Previously, the oil boom didn’t happen. Countries focused on agriculture exports to produce money for themselves, sustain and keep the economy going. A case study of this article will be on Nigeria. The oil giant is getting a shove on getting onboarded into the green initiative agenda, but the African giant continues to bait time.

In this article, some questions will be answered using insightful data points, they include; What is renewable energy? Why is the world headed towards renewable energy? Can developing countries meet the set target of adopting green energy initiatives? Will oil still be in maximum use?

Renewable Energy: An Overview

As Wikipedia describes, renewable energy is useful energy that is collected from renewable resources, which are naturally replenished on a human timescale, including carbon-neutral sources like sunlight, wind, rain, tides, waves, and geothermal heat.

Renewable energy includes resources that rely on fuel sources that restore themselves over short periods of time and do not diminish. Such fuel sources include the sun, wind, moving water, organic plant and waste material (eligible biomass), and the earth’s heat (geothermal). Although the impacts are small, some renewable energy technologies can have an impact on the environment. For example, large hydroelectric resources can have environmental trade-offs on such issues as fisheries and land use.

Green energy is any energy type that is generated from natural resources, such as sunlight, wind, or water. It often comes from renewable energy sources although there are some differences between renewable and green energy, which we will explore, below. The key to these energy resources is that they don’t harm the environment by releasing greenhouse gases into the atmosphere.

So how does this work? As a source of energy, green energy often comes from renewable energy technologies such as solar energy, wind power, geothermal energy, biomass, and hydroelectric power. Each of these technologies works in different ways, whether that is by taking power from the sun, as with solar panels, or using wind turbines or the flow of water to generate energy.

What Does it Mean? To be deemed green energy, a resource cannot produce pollution, such as is found with fossil fuels. This means that not all sources used by the renewable energy industry are green. For example, power generation that burns organic material from sustainable forests may be renewable, but it is not necessarily green, due to the CO2 produced by the burning process itself. Green energy sources are usually naturally replenished instead of fossil fuel sources like natural gas or coal, which can take millions of years to develop. Green sources also often avoid mining or drilling operations that can be damaging to ecosystems.

The six most common forms of green energy are as follows: solar power, wind power, hydropower, geothermal energy, biomass, and biofuels.

Why the World Is Headed Toward Renewable Energy

In recent years, the world has marched towards renewable energy. According to a new report by the International Renewable Energy Agency (IRENA), unsubsidized renewable energy is now most frequently the cheapest source of energy generation. The report finds that the cost of installation and maintenance of renewables, which was an important stumbling block to mass adoption, continues on a downward trajectory.

Adding to existing efforts made by governments and businesses, these lower costs are expected to propel the mass adoption of renewables even further. The report further touches on the importance of renewables in sustainable development and the need for governments to help achieve the climate goals of the Paris Agreement, coming just months before the United Nations Climate Action Summit being held in Abu Dhabi in September 2019.

Today, the world still heavily relies on fossil fuels and even continues subsidizing them. Meanwhile, the pollution they cause — from climate-damaging greenhouse gases to health-endangering particles  — has reached record levels. And when something goes wrong, for example when the Deepwater Horizon oil platform exploded in 2010, the consequences are dramatic.

Since 2011, renewable energy is growing faster than all other energy forms. Renewable energy had another record-breaking year in 2020, as installed power capacity grew more than 256 gigawatts (GW) —its largest increase ever. More than 29% of our electricity now comes from renewable energy — and this keeps growing.

Well, there is no smoke without fire, right? The developed world economies opine that green energy can also lead to stable energy prices as these sources are often produced locally and are not as affected by the geopolitical crisis, price spikes, or supply chain disruptions. The economic benefits also include job creation in building the facilities that often serve the communities where the workers are employed. Renewable energy saw the creation of 11 million jobs worldwide in 2018, with this number set to grow as we strive to meet targets such as net-zero.

Due to the local nature of energy production through sources like solar and wind power, the energy infrastructure is more flexible and less dependent on centralized sources that can lead to disruption as well as being less resilient to weather-related climate change.

Green energy also represents a low-cost solution for the energy needs of many parts of the world. This will only improve as costs continue to fall, further increasing the accessibility of green energy, especially in the developing world.

Remember too that the combustion of fossil fuels for energy results in a significant amount of greenhouse gas emissions that contribute to global warming. Most sources of renewable energy result in little to no emissions, even when considering the full life cycle of the technologies. Renewable energy emits no or low air pollutants.

The United Nations (UN) has declared the years 2014­–2024 the Decade of Sustainable Energy for All (United Nations, 2015). Renewable energy technologies, which are a part of the low-carbon facet of the global energy supply, are rapidly increasing their presence in many countries of the world. The top five countries for total installed renewable power capacity by the beginning of 2014 were China, the United States (US), Brazil, Canada, and Germany. In the European Union (EU), renewables have represented the majority (72 percent) of new electric generating capacity for the last several years (REN21, 2014). Renewables, however, is no longer dependent on a small number of countries.

Major renewable energy companies became very interested in Africa, Asia, and Latin America; where new markets are emerging on and off-grid. Investment patterns are also shifting away from traditional governmental and foreign donor sources to greater reliance on private and often local firms and banks (Martinot et al., 2002; REN21, 2014). Support for the adoption of renewable energy has been growing among governmental agencies, industry, non-governmental organizations, and the public at large. These actors pursue energy, environmental, and development agendas at local, regional, and global levels (Bayer et al., 2013; REN21, 2014).

Developing Countries: Meeting The Set Target for Adoption

Indeed, our society could not escape the climate change challenges without a transition to clean energy. However, there exist some constraints that may hinder the full energy transition.

For instance, the availability of inputs (mostly rare materials) that could serve to produce renewable energy (solar/wind) may be a barrier to a full transition to a green economy. Also, as a self-reproducing industrial system producing photovoltaic cells is not possible, the economy still needs fossil fuels to produce clean energy. So, we need to care about the extent to which the economy can fully achieve a transition towards clean energy.

But another problem is the reality that many activists have turned their eyes off. The impact of disrupting under and developed countries’ sources of energy and income, thinking these countries can immediately reach the adoption rate of developed countries. Let us be truthful to ourselves, in the next 20 years, such countries will not reach the green energy adoption rate.

Developing renewable energy sources contributes to alleviating poverty, fuelling industrial production and transportation, expanding rural development, and protecting health while promoting sustainability and environmental quality was researched by Hostetter (Hostettler, 2015). Renewables account for approximately 20 percent of global final energy consumption, with the most prominent growth happening in the power sector and with global capacity rising more than 8 percent in 2013 (IEA, 2014a). Fossil fuels, however, continue to dominate global primary energy consumption, with coal remaining the major contributor to the world’s energy pool (REN21, 2014).

Almost 1.3 billion people in the world, mainly in rural areas, live without access to electricity and 2.7 billion without modern reliable energy services (UNDP, 2013; Alliance for Rural Electrification, 2014; IEA, 2014a). Global energy consumption is projected to rise by 56 percent by 2040, with fossil fuels dominating the energy grid (US EIA, 2013). Strong economic and continued population growth in developing countries will be the prevalent force driving world energy markets during that period. Coal use is on the rise, mainly due to China’s consumption, and global energy-related carbon dioxide emissions are predicted to have a 46 percent increase by 2040, a rise from about 31 billion metric tons in 2010 (US EIA, 2013).

Now you can see, the grave hoax many have been humping on, this logic of expecting underdeveloped countries that base their sole livelihood on oil to abandon them and adopt green energy is a fallacy, and for the adoption to take place (which is not fully possible), these countries will be needing massive support in human resource, cash, and strategic support. Now, where are those activists advocating for a change?

In many African and Asian countries, the poverty rate is extremely high that the majority of the populace is in extreme poverty. How do you expect them to talk about green energy? They don’t have stable electricity, they power their generators with fossil fuel, and it’s not stopping anytime soon. Come to think of it, most renewable energy methods are extremely expensive.

City Gate – Abuja

The Nigerian Case Study

Nigeria is an oil-producing nation, and it has been sustaining its economy due to the bloom of oil production. With foreign oil corporations such as Shell, Chevron, Total, and more operating in the region, we’ve been able to see the turnaround of the Nigerian economy. According to Statistica; Nowadays, Nigeria is Africa’s main oil producer. With 18 operating pipelines and an average daily production of over two million barrels in 2019, Nigeria is the eleventh largest oil producer worldwide. The petroleum industry accounts for about nine percent of Nigeria’s GDP and over 90 percent of all export value.

The most populous country within OPEC, Nigeria has around 208 million inhabitants. Located on the Gulf of Guinea on Africa’s western coast, Nigeria covers an area of around 924 thousand square kilometers. Abuja, the capital since 1991, has a population of more than one million. English is Nigeria’s official language, although many local languages such as Hausa, Yoruba, Igbo, and Ijaw are also spoken.

Apart from petroleum, Nigeria’s other natural resources include natural gas, tin, iron ore, coal, limestone, niobium, lead, zinc, and arable land. The oil and gas sector accounts for about 10 percent of gross domestic product, and petroleum exports revenue represents around 86 percent of total exports revenue.

Nigeria’s crude oil and natural gas resources are the mainstay of the country’s economy. Because Nigeria heavily depends on oil revenue, its economy is noticeably affected by crude oil price changes. The International Monetary Fund (IMF) projected that Nigeria’s crude oil and natural gas exports earned $55 billion in 2018, which is $23 billion higher than in 2016. The growth in export revenue, which can be partly attributed to the rebound in crude oil prices, has helped improve Nigeria’s fiscal position. However, Nigeria’s fiscal deficit remained flat at 4% of its gross domestic product (GDP) because of a significant increase in capital expenditures and lower–than–expected non–oil revenue collection, despite improvements to the country’s tax administration. The Nigerian government still heavily relies on crude oil and natural gas revenue; its non–oil revenue comprises only 3.4% of GDP, one of the lowest in the world.

But then there is oil, right? Then how are the life of the average Nigerians shaped; for better or worse? The National Bureau of Statistics (NBS) recently released the “2019 Poverty and Inequality in Nigeria” report, which highlights that 40 percent of the total population, or almost 83 million people, live below the country’s poverty line of 137,430 nairas ($381.75) per year.

The NBS report is based on data from the latest round of the Nigerian Living Standards Survey, conducted in 2018–2019 with support from the World Bank’s Poverty Global Practice and technical assistance from the LSMS program.

The Nigerian Living Standards Survey (NLSS) is the official survey that is the basis for measuring poverty and living standards in the country and is used to estimate a wide range of socio-economic indicators including benchmarking of the Sustainable Development Goals. Between September of 2018 and October of 2019, the National Bureau of Statistics conducted the latest round of the NLSS, a decade after the previous one.

The World Bank provided technical support to the NBS throughout the entire survey implementation, introducing several methodological improvements that led to the availability of reliable data for the poverty estimates.

Imagine at this rate with the oil in place what is obtainable, then think of what will happen if industries in the sector close shop. The unemployment rate in Nigeria is high. Do we expect the oil and gas industries to shut down and automatically move to green energy when the social system would collapse? That is unlikely! Now imagine tasking Nigeria to meet the set deadline or green energy adoption. Lol, our MDG for 2020 has not been achieved, instead, it’s been pushed to another set quantum.

These are some instances as to why the move by activists who don’t think logically and pragmatically about processes causes carnage.

Will Oil Ever Be Replaced?

Imagine getting an electric vehicle in a country where there are no electric car charging centers and you can’t boast of even 12 Hrs of stable power, would you fuel your generator your charge your electric car? This is the complex nature of system processes. You ignore it and you’re toast!

Green energy has the capacity to replace fossil fuels in the future, however, it may require varied production from different means to achieve this. Geothermal, for example, is particularly effective in places where this resource is easy to tap into, while wind energy or solar power may be better suited to other geographic locations.

However, by bringing together multiple green energy sources to meet our needs, and with the advancements that are being made with regards to the production and development of these resources, there is every reason to believe that fossil fuels could be phased out.

We are still some decades of years away from this happening, even though it’s been projected that under-developed countries could adopt green energy use at a faster rate than the West, the fact remains that this is necessary to reduce climate change, improve the environment and move to a more sustainable future.

Victoria Island to Ikeja Airport in 7 minutes – with Vetifly Helicopters

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I promised to share helicopter tickets here and that is coming. Also happy to share the taste of what you would experience as you fly Vetifly and experience the luxury, class and fun. Yes, fly over traffic across Nigeria. Victoria Island to Ikeja Airport in 7 minutes! 

Full operations begin in two weeks in Lagos, and quickly we will ramp up to many Nigerian cities and African countries. But first, help me and download the app vetifly.com (Android and Apple iOS). 

As we hit this milestone of public launch. I want to thank all Vetifly investors, especially Tekedia Capital investors who came in big. Thank you so much. 

Vetifly >> arrive in style, move different! 

Video credit: Vetifly customer and flyer, mycraw on Instagram

 

What Nigeria and United States Largest Public Companies Teach About their Economies

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Nigeria’s stocks worth over one trillion (SWOOT) naira, and certainly the largest companies, have two cement companies, two telecommunication firms, and a food & drink processing conglomerate. In the United states, the six largest publicly traded companies (and certainly the largest overall), are largely all technology companies.

From these companies, one can also pick the states of the economic developments: Nigeria’s is still emerging with cement and food catalytic while in the US, those have since passed their growth phases. While Nigeria bets big on the infrastructures of the digital economy  with MTN and Airtel, the US is focusing on the utilities built on those infrastructures with the core infrastructure players largely not dominant.

But there are many more things one can point out by looking at these logos. What do you see?

 

Comment on LinkedIn Feed

Comment 1: Ndubuisi Ekekwe, the first logo shows that Nigeria is still on the lower rung of the Maslow’s Hierarchy of Needs (Physiological Needs), and The US, has met these needs, therefore innovation is easier. You cannot innovate until you meet the first need. “It is hard for a hungry man to think”

Comment 2: We went to the Olympics, and returned with two medals: silver and bronze. So for all those sixteen days, Nigeria’s national anthem never roared, with green white green ascending, while the world salute us. Nothing can compare to that feeling, but we never had one of those precious moments.

We have done all kinds of economic analyses and political governance systems here, but what exactly can we say Nigeria is good at? Just bunch of creatures who talk too much but do very little.

Let’s deal with small things first, if we cannot make good impressions in global games like the Olympics, then it makes no sense debating more sophisticated and costly adventures, because there are many nations who are well ahead.

I don’t want to blame anyone, just that we are never great at anything, and the earlier we accept this, the better for us. This mindset of settling for average or mediocre outcomes is what I find absurd, our will to succeed is nowhere near what you see from other nationals. When people expect a lot from us, and we disappoint, our attitude doesn’t even show remorse or great sense of responsibility, because we have all remained largely irresponsible in this part of the world.

I want to hear our national anthem at the grandest of stages, nothing can make me prouder as a Nigerian, for now we don’t have any bragging rights.

We are trading cement and food, yet homes aren’t affordable, neither do we have enough food for the hungry…

Comment 3: Prof Ndubuisi Ekekwe, please note that the dichotomy you are referencing is a result of differing stakes in the equity markets in these two economies. The driving forces in the US stock market are completely different from what obtain in Nigeria. In addition to reported corporate profits, low to zero interest rates in the US has virtually guaranteed a bullish stock market here, resulting in what some believe are equity pricing “bubbles.”

Remember also that the US is largely service and consumer economy, although the Biden administration is seeking to bring manufacturing back into the economy. Nigeria’s economy on the other hand, is purely a consumer economy. So, the market caps of the companies referenced are more indicative of the economic activities in the country.

Comment 4: First, I see that the US economy is already positioned for the future ; a time when almost all sectors of the economy would depend on tech to function optimally. On the other hand, I see that the Nigerian economy is still dwelling in the present, characterised by shortage in housing, food and Internet connections. I see a largely untapped tech market for Nigerians however, depending again on the institutional support for such tech exploration. Prof., these, I have seen.

What Does It Take to Attain SDGs? Nigerian Professionals Asked and Discussed Suitable Ideas

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By 2030, Nigeria is expected to be among the countries that have absolutely or partially achieved all the 17 Goals of the Sustainable Development Goals, agreed on by business and political leaders some years after the inability of realising all the Millennium Development Goals. Nigeria is one of the countries that achieve less of the MDGs. This has been a great concern to academia and industry, including Ministries, Departments and Agencies that have the mandate of ensuring sustainable living for everyone.

Our analyst had earlier reported that businesses and scholars need to come together and work with the mindset of removing perenial frictions associated with organisation to organisation partnership in the past, especially industry and academia relationship. In furtherance of this proposition and our analyst’s quest of understanding happenings around SDGs, he was privileged to attend an online discussion, where Nigerian professionals from the industry, academia and civil society space discussed all the 17 SDGs.

 

Available information suggests that the discussion of the first 16 Goals resulted in spending almost 50 hours, allowing the professionals to raise issues and needs, and discussing them thoroughly. Week 17, which is just ended a few hours ago, allows the professionals to discuss SDG 17: Partnership for the Goals. This Goal sums all the mechanics and physics of Goal 1 to Goal 16. It challenges stakeholders on the primary place of strategic collaborations and partnerships in attaining the rest Goals.

As the guest speaker of the week 17, Professor Nnamdi Madichie of the Nnamdi Azikiwe University, Akwa, dwelled on the key things stakeholders in industry and academia, including government must do before Nigeria realises all the Goals. He stressed the place of mutual understanding before and during partnership or collaboration formation.

Other professionals who spoke identified information asymmetry among the stakeholders. According to them, lack of data and effective information exchange are impacting forming strategic alliance and executing projects. It also emerged that stakeholders are having collective benefit conflicts. Some organisations want their stories to be told along with the projects being executed. Identifying and connecting different value propositions of the stakeholders also remain significant problems.

At the end of the discussion, participants agreed to forge ahead with the internal collaboration. For instance, participants who have existing projects on the realisation of the Goals or know individuals or organisations working towards attainment of the Goals were informed to connect with others or link such individuals or organisations with the participants.

As The World Tobacco-lizes Big Oil, Nigeria’s Moment of Truth Is Here

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“We are seeing a wave of divestment  by oil majors operating in Nigeria”, Mallam Mele Kyari, GMD of NNPC at 2021 NAICE.

As the world makes big oil the new tobacco which must be avoided by all means, Nigeria’s moment of truth is here. Cholera has returned at scale, insecurity has scaled, even IBB baptized himself a saint by looking at the level of corruption these days, doctors are still striking, teachers are not left out, etc you will ask: what will happen when even the oil money is not in the purse? 

If I have to speak with President Buhari this morning, I will tell him one thing: you are the petroleum minister, move your junior minister and make him the Minister of Energy Transition & New Economy, with a clear mandate to develop protocols on new systems to substitute whatever Nigeria will lose from petroleum. The goal is to have structures which will help Nigeria enter the new energy world confidently, and I do think despite whatever the ministries of ICT, Science, tech and innovation, etc may be doing, it is only the petroleum ministry that will send the loudest alarms.

The oil majors are not in control of this redesign: the investors are. As major funds dump them over exposure to the “new tobacco”, they want to wean themselves off hydrocarbons to remain viable in the markets.

The World Bank has joined the march to greenhood, phasing out key upstream investments. The sovereign wealth fund of Norway, the largest equity investing fund in the world, controlling nearly 1.5% of the total global equity war chest, is cutting exposures to (fossil-based) energy companies. Shell is leaving Nigeria. Today, Toyota has learnt that selling more cars is not what matters, it is the type of car (EV or gasoline) that investors care about.

People, they are tobacco-lizing big oil, and in the near future the pension funds will join the party, and some university endowments will fire fatal bullets. Big oil is the new tobacco and the world is running away from it. Nigeria must open its playbooks.

Comment on LinkedIn Feed

Comment #1: Prof Ndubuisi Ekekwe, honesty and accountability need to be built into Nigeria’s business culture. The NNPC GMD is only partially right in the attributed quote. He used a present continuous verb tense (we are seeing), in place of a compound continuous past perfect tense (we had been seeing).

The divestment trend among oil majors had been in progress for almost 8-10 years. Oil giants are being compelled by lawsuits, shareholders, and boardrooms to pursue new pathways in energy production, especially ones with a lower carbon future. Even national oil companies have begun diversifying. Saudi Arabia, one of the biggest oil-producing countries in the world has engaged in large commercial solar energy projects since 2011.

As you concluded, the change is imminent, and “Nigeria must open its playbook.” Unlike crude oil, gas production must ascend into the high priority realm, meaning gas flaring must come to an immediate ending.

When will the country begin to lay the foundations for the adoption of electric vehicles? Are the ministers of energy and transport even considering this?

Comment #2: “The goal is to have structures which will help Nigeria enter the new energy world confidently …….Its is only the petroleum ministry that will send the loudest alarms”. Exactly what Dubai did,and Venezuela refused to do.As of 2016, Venezuela has the largest oil reserves in the world.(Lol)
Good people,Nigeria has the best ideas-best brains. We have the best committees set up to look at the root causes and submit a term-paper. Then a second committee to serve as oversights to the first one.(Chuckling)

What we lack is sustained execution. Strong executions come from strong leaders,not drama or politics. It comes with dedication to the mission above all others. We have to start teaching our kids execution,not sentiments,ethnicity or politics. Just the results.Everything is simple thereafter.The common wealth should be our national destination.

Lagos is setting the pace. I predict in the next 20years,you will need some kind of intra visa,or economic visa status to live in Lagos, if the other states remain asleep .Just wait till Lagos gets its ultra modern state police.