Achieving energy self-sufficiency in West Africa (II)
The previous article established that while energy self-sufficiency is a lofty ambition, there is scarcely any nation that boasts of complete reliance on itself for all its energy needs.
However there are some countries already making giant strides in this area including the United States of America and China.
Meanwhile a school of thought believes that instead of rooting for energy self-sufficiency, the goal should be to diminish the strategic importance of oil.
Gal Luft, in an article titled ‘Energy Self-sufficiency: A Realistic Goal or a Pipe Dream? Quoted from the book ‘Turning Oil into Salt: Energy Independence through Fuel Choice’, stated that oil today has the same strategic importance that salt held for most of human history.
As the sole means of food preservation, salt once determined the course of world affairs. Wars were even fought over it.
Competing means of food preservation such as canning and refrigeration stripped salt of its strategic status, turning it into “just another commodity” that no longer has geopolitical leverage.
Luft stated that similarly, the strategic importance of oil does not stem from the amount of it we use or import but from its virtual monopoly over transportation fuel.
“For the most part, automobiles sold throughout the world can run on nothing but petroleum fuels and thus energy commodities from which competitive fuels can be made are effectively barred from competing against oil.
“Because of this, oil is not substitutable, so consumers cannot shift on the fly to competing products when oil prices become too high,” wrote Luft.
However, this seems like an argument situated in the near future. For West African sub-region, energy self-sufficiency is still a herculean task despite Ghana’s declaration to the contrary.
A Word Bank data says that over 600million people are without electricity. According to data from McKinsey, the whole of Africa has a total of 42 refineries, with a total name-plate capacity of 3,217,600 barrels per day (bpd).
West Africa with 16 countries has 7 refineries with a combined capacity of close to 800,000 barrels per day according to the data accessed from the world refinery list. This illustrates the depth of energy gap in the sub-region.
The need for a refining hub in West Africa becomes an acute necessity as each new day dawns. Millions of dollars are paid each year to transport crude oil to factories in India and Singapore.
It takes away jobs from the region and creates jobs outside the sub-continent. This is not counting huge loss of revenue from crude derivatives from the refining process.
Nigeria billionaire Aliko Dangote is planning a 650,000 barrels per day refinery in Lagos slated for completion by the end of next year. More of these kinds of initiatives are required in West Africa to help the drive towards energy self-sufficiency.
An analysis of the nations that are closer to energy self-sufficiency reveals that they diversified their energy sources.
A country’s energy options often comprises of several commodities including coal, natural gas, biomass and uranium. These are used in electricity generation while petroleum and its products drive the transportation sector
The kinetic energy in the wind can be converted to electricity with a wind turbine. It is done using the principles of induction. An industrial scale commercial wind turbines are important in the produced electrical energy.
With increasing technology, smaller wind turbines designed for residential buildings are becoming more economical and efficient than ever.
Solar photovoltaic panel (also known as PV-cells or solar cells) converts sunlight into electrical energy. These devices have the ability to produce large amounts of electricity, even in places where sun exposure is limited.
Countries like Germany and India are ramping up solar capacity and it remains Africa’s surest path to energy security.
Large investments would be required in energy storage technologies to deepen energy security and chart a path to energy self-sufficiency.
Already a massive growth is being witnessed in the world energy storage industry as it is projected to reach $250 billion by 2040 according to a Bloomberg New Energy Finance study published in June last year.
The study finds that batteries capable of storing power at utility scale will be as widespread in 12 years as rooftop solar panels are now, revolutionizing the way consumers use energy. Energy storage technologies are designed to help avoid drawing energy from the grid during peak hours, instead charging itself during regular hours when energy is cheaper.
The objective is to increase efficiency through balancing peak power demands. This subsequently reduces demand charges, reduces capital expenditures for service upgrades, and improves the planet by decreasing the usage of power plants.
Diversification of energy sources has become imperative based on the fact that the global economy is vulnerable to volatility of oil prices.
Nigeria’s economy sank into recession last year on the back of plummeting crude oil prices and militant activities that impacted production drastically.
While the country based its budget on an output of 2.2million barrels per day using a benchmark price of $38 per barrel. Crude prices however, fell below $30 per barrel in the first quarter of the year. Production hovered around 1.5million bpd for most of the year.
However to achieve a true and lasting energy, experts say a competitive fuel market paradigm is a necessity.
”It’s amazing how we continue to allow gas flaring when an articulated national program for the expansion of CNG use in automobile is a viable solution and has tripartite advantages,” said Chijioke Mama, energy analyst on Nigeria’s reliance on petroleum products to power its vehicles.
A forward looking road fuel policy that incorporates CNG must be adopted. CNG generation at gas sources will eliminate the environmental impacts of flaring and provide an alternative road fuel which eases the pressure on both local refining gaps and the foreign exchange required for fuel import.
Energy self-sufficiency as a goal is fraught with challenges and calls for deepening investments to diversify energy sources, improve energy storage and seek for alternative sources for fuels for vehicles.
However, while achieving energy self-sufficiency seems difficult to attain at least in the short term, countries in the sub region should brace up to check the impact of volatile oil prices on their economies.
Energy security on the other hand, appears like the low hanging fruit every country in the sub-continent must strive to attain.
ISAAC ANYAOGU