7th Annual New York-based Columbia University Global Energy Summit On 18/05/2021

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KEYNOTE ADDRESS BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AT THE 7TH ANNUAL NEW YORK-BASED COLUMBIA UNIVERSITY GLOBAL ENERGY SUMMIT ORGANIZED BY THE COLUMBIA CENTRE ON GLOBAL ENERGY POLICY ON THE 18TH OF MAY 2021

PROTOCOLS

Thank you for the opportunity to join in this important conversation about Global Perspectives on the Energy Transition. The term “Energy Transition” is a curious one, it has multiple aspects, and depending on the context, we focus on one element of the transition, but in fact, the transition itself is multi-dimensional. It includes focusing on energy consumption and access, energy fuels and sources, energy infrastructure, energy financing, as well as energy applications, and the social and economic elements linked with energy.

I will one way or another touch on these elements as I hopefully bring to the fore, the perspective from a growing economy (the Nigerian economy) that is still energy poor from electrification and clean energy perspective, but energy-rich in fuels and natural resources as well as on innovating to deliver affordable and reliable energy for its very huge populace.

But let me begin if I may with my conclusion; it is that the global energy transition must be inclusive, equitable, and just, taking into account the different realities of various economies and accommodating various pathways to net-zero by 2050.

This point is important for two reasons; the first is that a Just Energy Transition for developing economies is central to the right to sustainable development and poverty eradication as enshrined in relevant global treaties including the Paris Agreement. The second is that globally, we are seeing wealthier nations and development finance institutions banning all public investments in fossil fuels, including natural gas. Examples include the European Union (EU), the United Kingdom (UK), and Denmark to name a few, as well as specific institutions such as the Swedfund from Sweden, CDC from the UK, the European Investment Bank, and the Investment Fund for Developing Countries from Denmark.

Other institutions recognize the importance of breaking fossil fuels down into different fuels and assessing the role of each within the context of a just transition, but they are also facing increasing pressures from others to completely end all fossil investments, including investments in natural gas. One example is the African Development Bank (AfDB) which has an inclusive energy sector policy aiming to support the optimal use of oil and gas resources to secure equitable benefits and increase energy security but is increasingly unable to close any large natural gas deals in the face of external pressures.

My view is that this approach does not appear to sufficiently take into account, the principles of common but differentiated responsibilities and leaving no one behind, that are enshrined into global treaties around sustainable development and climate action.

I will pose three questions and the first is, what would equity look like in the transition or what is the case for equity? And in answering this question, I have drawn from the excellent work of the Energy for Growth Hub on Transition in Africa. I will be using a few of their statistics here.

Excluding South Africa, the remaining 1billion people in Sub-Saharan Africa are serviced by a power generating capacity of just 81 gigawatts and have contributed less than 1 percent of cumulative CO2 emissions.

Most countries on the African continent are low emission, energy-poor countries with per capita emissions of between 0.8 – 1 ton of CO2 in sub-Saharan Africa, and an average of under 2 tons/capita if South Africa and Northern African countries are included. So even tripling electricity consumption in the countries (barring South Africa) solely through natural gas would add just 0.6% to global emissions.

By comparison, the United States’ emissions stand at 15.5 tons/capita; while on average Europe has per capita emissions of 6.5 tons. Also, it is worthwhile to remember those countries including the US, China, Japan, and large parts of Asia and the EU include gas as a major pillar of their multi-decade decarbonization strategies, including actively developing African gas in countries like Mozambique, Ghana, Senegal, and Nigeria for export to Asia and Europe while limiting financing for gas projects for domestic use in those same countries. So, limiting the development of gas projects poses dire challenges for African nations while making an insignificant dent in global emissions.

So, the second question is, what is the case for justice and fairness? I think that what is often not sufficiently considered in thinking through the transition to net-zero emissions is the critical role that energy, in our case, gas, plays in catalyzing economic development and supporting people’s health and livelihoods, especially in poorer countries.

Asides from power generation, natural gas is currently used for industry, fertilizer manufacturing, and cooking, which is more difficult to transition than power generation, and also the role of transition fuels in delivering domestic value and in accelerating the pace of adoption of cleaner fuels.

In Nigeria, for instance, there is a transition underway to shift from petrol (Premium Motor Spirit) to natural gas, which we believe is the economically sensible transition pathway and the bridge to utility-scale renewable energy.

Similarly, LPG is already replacing the huge amounts of hazardous charcoal and kerosene cookstoves that are most widely used for cooking while saving millions of lives lost to indoor air pollution annually.

If in the midst of this transition the financing of gas projects, including the use of LPG and CNG for cooking and transport is constrained, then it will certainly set back the progress planned and may lock our financially constrained nations into higher carbon infrastructure.

For most sub-Saharan countries the conversion from gas to renewable energy for electricity generation is often hampered by weak or limited grid systems. This means considerable difficulties in integrating intermittent renewable energy sources (solar and wind) above 15% of generation. But if enabled by a similar share of natural gas, intermittent renewables increase to over 30% of generation, this reflects a roughly 2:1 ratio of dispatchable gas enabling intermittent renewable energy sources.

Also in making energy choices to comply with net-zero by 2050, I think it might be useful to note that the average expected operating life for a combined cycle gas plant is 25-30 years, meaning that a new plant built today will likely operate until 2046, enabling transition away from more polluting fuels, and the integration of more renewables.

What will inclusivity and support mean in the transition?

I think the principle of leaving no one behind must translate into action by mobilizing international public and private capital that flows into countries that need it the most. Efforts aimed at delivering climate action while leaving no one behind must facilitate the flow of capital for renewables, rather than limiting capital flows to gas projects.

There is currently a dramatic mismatch in my view of energy investments. While representing just 15% of the world’s population, high-income countries received 40% of global energy investment in 2018. Conversely, developing countries with 40% of the world’s population received just 15% of global energy investment.

Energy consumption in developing countries has doubled in the last 15 years and is expected to grow another 30% in the next 15 years. Making capital available to fulfill the growing energy demand in these regions of the world is central to reaching the goals of the Paris Agreement.

LPG-based policies and programs are critical to realizing universal access to clean cooking solutions by 2030, giving 2.8 billion access to clean cooking solutions for the first time, and will need a global investment of USD 4.4billion annually till 2030.

Nigeria and countries across Africa are committed to a net-zero future, especially given their vulnerability to the adverse effects of climate change, and all have expressed commitment to their national development contributions under the Paris Agreement, however much greater support in developing and implementing robust energy transition plans are needed.

Clearly, the Continent will require an unprecedented scale of investments. An energy mix that is compatible with a 1.5°C pathway would require something in the order of USD  40 billion to flow into Sub-Saharan Africa annually, a fourfold increase compared to the USD 10 billion invested in 2018.

Further, the energy access element of the energy transition must be linked with the emission reduction aspect. For too long, we have considered these to be parallel tracks. However, pathways to reaching net-zero by 2050 have to include first, ending energy poverty by 2030. If energy access issues are left unaddressed, we will continue to see growing energy demand being addressed with high polluting and deforesting fuels such as diesel, kerosene, and firewood.

As a result, efforts aimed to advance climate goals must first and foremost create carbon space for growing economies that have historically made negligible contributions to global emissions and have an obligation to their people to provide access to energy for electricity, cooking, and productive uses.

Thank you.