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Impending Doom: As Alternative Energy Sources Take Centre Stage

Posted: Apr 2, 2016 at 3:01 am   /   by   /   comments (0)

Hazeez Balogun, Lagos

 

Imagine this scenario. You wake up in the morning and you have to trek 10km to work because you cannot afford to pay for transport. The roads are littered with dirt and they are full of potholes. You are looking behind your back fearing that you could be attacked by robbers. The crime rate has increased ten folds in recent times. Even the work you have, your employers have refused to pay you for six months.

The whole situation is hopeless. Public schools have become a shadow of themselves, but you cannot afford to send your children to private schools. Most of the public works have grounded to a halt. Many people you know have moved to neighbouring countries. The whole situation of the country seems hopeless.

All these may sound like a doomsday scenario only seen in movies, but experts say this is how the future looks for countries that are heavily dependent on crude oil for their income. And from their reports, this dooms day is moving closer and faster than previously expected.

Today, many oil producing countries have started to diversify their economy, and experts say, these countries will also suffer some of these effects but survive. IMF lists countries with the ability to recover quickly as Bahrain, Colombia, Iran, Kazakhstan, Norway, Russia, United Arab Emirates (UAE), Bolivia, Canada, Indonesia and Malaysia. And those countries in the danger list are high dependent countries. They include: Nigeria, Oman, Qatar and Saudi Arabia.

So what is the cause of these impending doom? Two theories were given as dangers of over dependency on oil. The first one is Oil Peak.  The theory by Dr. King Hubbert says that the world is not running out of oil itself, but rather its ability to produce high-quality cheap and economically extractable oil on demand.

Dr. King Hubbert correctly predicted the peaking of USA oil production in the 1970s on this basis. Analysts are now saying that another oil peak is imminent in 2020.

The second theory, is more known. It has to do with the increase in popularity of renewable sources and the attention it is receiving by the western world. According to United Nation’s Environmental Programme, (UNEP’s) 9th Global Trends in Renewable Energy Investment 2015, prepared by the Frankfurt School, new energy finance in the past year has brought a rebound of green energy investments worldwide with a surge of a solid 17% to $270 Billion.

This is even brushing aside the challenge of sharply lower crude oil prices. This sudden increase reversed the investment dip of the past two years and was mainly driven by investments in solar and wind energy. One would have thought that lower prices of fossil fuel will be tempting enough, but instead, investments in renewable energy continues to rise.

The world largest importer of crude oil, China saw by far the biggest renewable energy investments in 2014 with a record of $83.3 billion, up 39% from 2013. The US was second at $38.3 billion, up 7% on the year but well below its all-time high reached in 2011. Third came Japan, at $35.7 billion, 10% higher than in 2013 and its biggest total ever.

Even our government agrees that renewals are the future.

Speaking in an interview on the sidelines of the World Future Energy Summit currently in Abu Dhabi, United Arab Emirates, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu acknowledged that crude oil and gas are exhaustible resources, noting that the way to make energy accessible to Nigerians in every nook and cranny of the country is to exploit renewable energy sources.

“We need to refocus a lot more effectively on alternative energy resources, particularly solar energy. There is really no reason why a country like Nigeria should not have more of its power supply from solar.”

So what do all these mean for Nigeria and her future? As it is, the largest importers of our main stay are slowly looking for alternatives. Denmark for example is relying on wind energy for its electricity and they are continuously building its wind turbines capacity. Today, 41% of Denmark’s power comes from wind.

Already, there is a shift in the way the world consumes energy. According to Michael Liebreich, founder of Bloomberg New Energy Finance, the shift occurred in 2013, when the world added 143 gigawatts of renewable electricity capacity, compared to 141 gigawatts in new plants that burn fossil fuels.

“The electricity system is shifting to clean,” Liebreich says, despite the change in oil and gas prices there is going to be a substantial build out of renewable energy that is likely to be an order of magnitude larger than the build out of coal and gas.”

As of this moment, over 95% of Nigeria’s income is from exportation of oil. Thousands of containers of Food, electronics and almost everything else are imported into the country everyday, while these containers leave our shores empty. The only thing that leaves the country is oil in various oil vessels docked at various shores in oil producing states. And already, the fluctuations in international prices, is setting the pace for or budgets and growth.

As long as the oil dollars keeps flowing in, Nigerians seem to be oblivious about the future without oil. Understandably, we should rely on our leaders to set things right. Various governments continue to talk about diversification, but real action is yet to be seen.

There is also the belief that as long as people keep driving cars, there will always be the need for fuel. This really does not hold water as electric cars are now becoming common place in the western world. In fact drivers of electric cars are given tax exemptions in some countries just to encourage people to drive these cars.

Just recently, TV show, Top Gear described a GM electric car Hy-wire as flawless. Top Gear is known for their brutal honesty when reviewing cars. Electric cars are not new. Priuses and the likes are becoming popular these days. What makes the GM Hy-wire unique is that unlike all other electric cars, it does not run on battery; hence you don’t need to charge it. It produces its own electricity through a fusion of Hydrogen and salt water. The car basically is a zero emission vehicle which needs cheap hydrogen and sea water, emitting water that is good enough to drink.

The prototype that was sampled costs £5,000,000 to make, but GM promised that the car will be ready for mass production in 20 years. It is going to be cheaper to buy, and cheaper to run. No engine oil, no fuel, no water coolant, no noisy silencer. Many other companies are having similar creations in their laboratories at the moment.

According to Mark Sloan, a renewable energy marketer in Nigeria, our dependence on fossil fuel is leading Nigeria the wrong way.

“Nigerians need to start looking at investing in renewable energy. Very soon those buying Nigeria’s oil will no longer need that oil. Nigeria has enough resources to build materials for renewable energy. Also, Nigeria needs to diversify the economy. Things will go wrong when the price of oil crashes more than it already has. When countries do not have need for crude anymore, it will become very cheap. Too cheap,” said Sloan.

Generating alternative power is also getting cheaper. Price of wind and solar power continues to plummet, and is now almost at par with grid electricity in many areas of the world. Solar, makes up less than 1 percent of the electricity market today but could be the world’s biggest single source by 2050, according to the International Energy Agency.

In fact, Christine Lins, Executive Secretary of the Renewable Energy Network for the 21st Century, noted that “last year, for the first time in 40 years, economic and emissions growth have decoupled.” The Renewable Energy Network was recently responsible for producing a global study of renewable energy growth over the last 10 years. What they find now, is quite surprising, even to its authors.

“If you look back 10 years ago, Renewable energies were providing three per cent of global energy, and now, they provide something close to 22 per cent, so that has really sky-rocketed,” noted Christine. This is being led most obviously by countries like Uruguay, which aims to generate 90% of its electricity from renewable sources by 2018, and Costa Rica, which maintained 100% renewable energy generation for the first 100 days of this year.

Even smaller countries than Nigeria are now becoming big players in the renewable energy world. Smaller developing countries such as Burundi, Jordan and Kenya are leading the world in investments in renewable energies as a percentage of GDP. Worldwide investments in renewable technologies amounted to more than US$214 billion in 2013.

China and the United States are heavily investing in wind, hydro, solar and biofuels. In the USA, the Obama administration has made significant progress at encouraging investment in solar power. A number of policies both at state and federal levels have been adopted to support investment in the sector. These include the Renewable Portfolio Standards (RPS), Public Benefit Fund for Renewable Energy (PBFRE), Output Based Environmental Regulation as well as Feed-in Tariffs and other financial incentives.

At the end of 2014, USA has installed solar capacity in excess of 15 GW with a huge majority deployed in the last five years. According to GTM Research and the Solar Energy Industries Association’s (SEIA), the U.S. installed 1,133 megawatts of solar photovoltaics (PV) in the second quarter of 2014 alone. Between 2012 and 2014, the grid connected utility segment quadrupled its cumulative size, growing from 1,784 megawatts in the first half of 2012 to 7,308 megawatts today.

Sadly enough, it seems that the future of Nigeria’s income and its energy production and use is very gloomy. Though the minister has promised on investments in renewable energy, very little is being done in diversifying the economy. With oil and other fossil fuel, becoming obsolete, Nigeria needs to focus on alternatives.