Energy is life and is currently considered to be a vital input to economic growth and development. Historically, energy has existed in different forms, although the common source the world has exploited and generated electricity for a long time has been conventional fossil fuels. Considering how we generate energy today, the term “fossil fuels” makes a lot of sense since our traditional energy generation methods were created for a different world. In Nigeria, the country’s reliance on these fossil fuels has gone on far longer than it should have, and hence, the need for the transformation of the energy sector is considered one of the most important challenges we face today.
To achieve this critical feat, which is essential for sustainable development, Nigeria has to catch up with the evolving global transformation trends in the energy industry. Taking a holistic look into the Nigerian energy industry, it is becoming undeniable that the industry needs to be decentralised, decarbonised, and digitalised to attain an evolving and sustainable energy sector. These trends cannot afford to be overlooked by the Nigerian government so as not to be left behind with the evolving world developments and hence, the need to transform our energy sector via these ‘3-Ds’; Decentralisation, Decarbonisation and Digitalisation.
- Decentralisation
In simple terms, this is transitioning from our current system of highly centralised energy grids run by monopolistic energy providers towards distributed energy production systems. Prior to the electricity sector privatisation in Nigeria, the electricity sector operated a vertically integrated model for decades where the government controlled the generation, transmission and distribution of electricity across the country. This model has been rigid, ineffective and inefficient in the delivery of adequate and reliable electricity as it has been marred with technical inefficiencies across the value chain alongside political bureaucracy. However, the table has been turning in the last few years with the introduction and adoption of renewable energy and the entrance of innovative technologies into the Nigerian energy sector. In other words, thanks to a combination of renewable energy and localised microgrids, consumers can generate their own electricity for their own needs and even distribute it.
One will already be familiar with the decentralisation idea with the solar home systems that are becoming common on house rooftops. But, importantly, decentralised energy schemes can scale up much bigger than that, serving anything from a single building to an entire housing scheme or even a whole city, as seen in some European cities. This is exciting because it means individual consumers, organisations, and local authorities can take charge of their energy portfolios. Furthermore, with the recently signed bill by the President of Nigeria on States making laws regarding the generation, transmission and distribution of electricity within the State, it is expected that this bold move will foster the decentralisation of electricity across the country and not just only boost electricity access but reliability.
- Decarbonisation
This refers to the transition towards a clean, carbon-free world, largely by increasing the country’s use of renewables and increasing premiums on the use of fossil fuels. The decarbonization of the Nigerian power sector is a crucial step towards achieving the country’s climate targets and addressing the negative impacts of greenhouse gas emissions on the environment.
Electrification is often touted as a significant way to decarbonise energy. Unfortunately, Nigeria’s power sector is largely dependent on fossil fuels, with gas accounting for about 85% of the country’s electricity generation. However, the Nigerian government has recognized the need to transition to a low-carbon economy and has taken several measures to facilitate the decarbonization of the power sector. For electricity to become emissions-free, we must move further towards renewable energy solutions such as wind, solar, and biofuels. This alone could eliminate thousands of deaths annually from air pollution and slow down the effects of global warming.
Renewable energy solutions, however, have their challenges not least the fact that we need energy 24 hours a day, yet we don’t have sun and wind 24 hours a day because of the volatility of the weather. Therefore, we need greater investment in energy storage projects to store the energy created through renewable sources. There is also a need for other clean energy alternatives that can provide a reliable electricity supply when supply from renewable sources dips such as nuclear power and hydrogen.
- Digitalisation
This is simply the use of digital devices and technology to optimise energy production, infrastructure, and use. Frankly, it will be a great idea to have intelligent energy networks. The digitalisation of the Nigerian power sector is an important step towards improving the efficiency, reliability, and sustainability of the country’s electricity supply. Digital technologies can help utilities optimize their operations, reduce costs, and enhance customer service, among other benefits.
Digitalisation is inextricably linked to decentralisation and decarbonisation. It is an indisputable fact that an increasing variety of zero-carbon energy sources will mean the country’s energy networks become more complex. And decentralised grids will need intelligent solutions to monitor and manage fluctuating demand. Digital tools will help us overcome these challenges and realise much-needed changes in the energy sector.
One of the key ways digital technologies can transform the Nigerian power sector is by deploying smart grid technologies. Smart grid technologies use advanced sensors, communication networks, and analytics to optimise the generation, transmission, and distribution of electricity. This can help utilities reduce energy losses, improve grid reliability, and integrate renewable energy sources into the grid. Moreover, digital technologies can also improve the customer experience by providing consumers with real-time information about their energy consumption and enabling them to manage their energy usage better. This includes the deployment of smart meters and the development of mobile applications that allow consumers to monitor their energy consumption and receive alerts about potential outages. Another technology that could be explored is blockchain technology which could be particularly useful for creating smart contracts that allow consumers to trace where their energy comes from.
In conclusion, the digitalisation of the Nigerian power sector is a critical step towards improving the country’s electricity supply’s efficiency, reliability, and sustainability. While there are challenges to overcome, such as the high cost of digital infrastructure deployment and the need for skilled personnel, the Nigerian government’s commitment to digitalisation is a positive step towards a more modern and efficient power sector.
Overhauling the Nigerian energy sector would definitely be a herculean task. Traditional energy companies like GenCos, TCN and DisCos can be slow to change, probably because they face some unique complications, such as health and safety risks, and the huge amount of capital invested in existing energy assets. But change is inevitable if they want to stay relevant in an increasingly competitive sector that never stops evolving.