- Speech delivered by MD/CEO, Heirs Oil & Gas, Osayande Igiehon at the 2022 Association of Professional Women Engineers in Nigeria (APWEN) Conference
Thank you for this opportunity to share with distinguished colleagues, friends, sisters, APWEN and the rest of us who are here to support them in this 2022 conference.
Please permit me to stand on all existing protocols and I will move on to the topical issue, “Just Energy Transition and how to make it enable the development of Nigeria”.
I find it to be a subject steeped in a lot of complexities, so I will try and deconstruct them so a layman in the street can understand what the energy Transition is about.
We will be talking about the following
- A Just Energy Transition: why it should be a just energy transition, the part that is not commonly said about it.
- The Nigerian energy transition plan
- What we think are the imperatives to ensure Nigeria can win.
- What Heirs Holding is doing within this space from a strategic point.
A Just Energy Transition
When we look at energy transition, there is the talk that you go from fossil fuels to renewables which is quite commendable, but we need to look at it on several different levels. Currently, we have an energy system that is carbon-intensive and by the second half of this decade, we should have an energy system that is carbon neutral or “no carbon at all”. The implication of “No Carbon” is “No Hydrocarbon” because hydrocarbon, as we know it today, is the base of the economy. So, in this energy transition conversation, we need to think about ourselves in the conversation.
The second thing to think about is the future today, most of the energy consumed is in the form of petroleum products. Whenever I am in my house, I am consuming power majorly from gas, when I drive my car, I buy petrol and use diesel in my generator. It is an energy system that is dominated by fossil fuels.
It is anticipated that in the second half of the decade we are building a system that will shift major energy consumption from electricity instead of petroleum, for example, fuelling cars will be done using electricity. This is the essential conversation about the energy transition.
Where we have a system that is dominated by electricity, we need to ask ourselves “What will be the source of the electricity?”. This is where the conversation becomes critical to move away completely from hydrocarbons to renewable sources.
Having said that and juxtaposing it with the realities of the world where the population is projected to go about 9 billion, the energy demand is only going to increase. Bringing it home to Nigeria and Africa, we talk about energy adequacy which numbers abound, but we do not know it enough. Some analyses have it at 80% and some 65% energy poverty… the bottom line is that a list of countries in Africa do not have enough energy, we are substantially short of energy which is the key piece to underpin the whole energy transition conversation.
When we talk about energy transition, we need to begin translating that conversation from a European perspective to an African perspective and bringing it closer home into a Nigerian perspective. Talking about the subject of a Just Energy Transition, the conversation is that we should have a transition that is fair, equitable and inclusive. A transition that creates opportunities across the world in a way that no one is left behind.
Most times in these conversations, Africa can be assumed to be a passenger and not in the driving seat. We do not understand it enough and need to take control of the narrative and chart our direction for ourselves. But what people are not talking about sufficiently is “What is the case for saying the energy transition has to be just?”. Having a just Transition is the fact that there needs to be a conversation addressing where we are and resolving the way forward and taking into consideration how we got to this point, the responsibilities and accountabilities for it, which is not sufficiently talked about.
When you look at it from any lens, whether historical, current, or per capita basis, over 70% of all the carbon has been from the developed world, i.e., the US, China, The EU, India, Russia and Japan. They contributed and are contributing to 70% of the carbon emissions that are linked to climate change today. Africa is about 3.4% of that and Nigeria is less than 0.5%. So, when having a conversation around energy transition and attempting to locate Nigeria and Africa in such a conversation, we need to think of it from the perspective of an African conversation and not a European conversation.
It is also further compounded because energy transition talks about moving away from fossil fuels taking into consideration a country such as Nigeria being a mono-product country where most of our economy is directly linked to oil and gas export. Therefore, when we talk about an energy transition in 30 years’ time where we want a carbon-free society, meaning “No Oil and Gas”, how are we going to engineer our country? We should be having conversations in that direction.
There is a direct correlation between the amount of energy consumed and economic advancement owing to the amount of carbon produced. If we do not take a decision from an African or Nigerian perspective in the articulation of the transition journey, we will be further disadvantaged as we move forward. It will not just become an enabler; it can also become a disabler.
The Nigerian Energy Transition Plan
Talking about the Nigerian energy transition plan, the country as has indeed taken pivotal steps to take the lead and provide leadership in sub-Saharan Africa around energy transition. The transition plan can be demonstrated in 5 points.
- To demonstrate Nigeria’s commitment to energy transition and net zero by 2060.
- Nigeria taking a leadership role in enabling a just and equitable climate future for Africa.
- Mobilize finance to jump-start the implementation of the plan.
- It is focused on gas as a transition fuel and solar as the main pivot of the energy transition and renewable source.
- The result it aims to achieve is ending energy poverty, lifting a million people out of financial poverty and creating a modern energy service system for Nigeria
Imperatives to ensure Nigeria can win
These are very important directions, objectives and results to be achieved. However, we think there needs to be more. The imperatives are:
- For it to be a Nigerian Plan, we need to be talking about a Nigerian energy sufficiency and transition plan. The transition should be an enabler to address the sufficiency. Transition is a European imperative, while sufficiency should be an African imperative.
- For sufficiency, we need to take the lead and invest in a plan that provides 100% for our people and energy sufficiency in a multipronged sufficiency plan. It should take into consideration, traditional energy sources, renewables and or new energies.
There are a lot of conversations that we can leap-frog the current and traditional energy system to a renewable system, citing mobile phone advancement as an example. But looking at the terrain and complexities. It is different and the capital involved to make that transition is significant. There is going to be a choice of pushing for either sufficiency or transition.
The thinking is that we use our resources to push for sufficiency bringing us to the next imperative that we need to attract the resources to make the transition work. If we must be part of the solution, we must be enabled to take a role in the solution.
There are a lot of discussions around technology transfer and Africans need to come to terms with the fact that there is nothing like technology transfer. No one will transfer a competitive advantage; we have to talk about technological acquisition. We need to find a way to get the technology in, which is the key role for us as engineers to find ways and means with leadership and policy direction from government and the inventiveness and creativity of our engineers to find a way around the technology to help in the journey.
What Heirs Holdings is doing from a Strategic Point
In Heirs Oil & Gas, we are part of a larger group; Heirs Holdings, with Mr. Tony Elumelu as Chairman, whose concept of Africapitalism essentially talks about a double bottom line of having commercial success and making sure we are making a social impact. He talks about doing well and doing good. In this, the Tony Elumelu Foundation is enabling our youths in a big way in the space of entrepreneurship.
Within Heirs Holdings we have an integrated energy strategy that possesses 3 arms:
- Oil & Gas
- New Energies/Renewables
In oil and gas, we acquired OML 17, which is the flagship asset of HHOG in January 2021. We took over operational control in July 2021. In 100 days, we ramped up production from 27,000 to 52,000 and in 8 months, we more than doubled gas production from 50mmscf to 120mmscf. It is interesting to note that all our gas produced goes into the eastern domestic network.
On the leadership team, 40% of us are women. On electricity under Transcorp, we operate 15% of the installed electricity generation capacity in Nigeria, running the plants in Ughelli and Afam, it may interest you to know that the Transcorp business is led by a woman. With this, you can tell that Heirs Holdings is a female-centric organisation.
We are charting our way forward in terms of new energies; I was privileged to join our Chairman in a conversation with Senator John Kerry, the US envoy for Climate last week. We had a similar conversation, so it was quite apt when I reflected on the theme of this conference, and I think the organisers are right on the subject that is key today. We espoused our position to him, and there is an up head that in Africa, we need to lift people out of poverty with energy sufficiency and the transition is an enabler, therefore it should not be one or the other.
I want to thank APWEN for the opportunity to share these thoughts today.
The energy transition is just and enabling is not what others will do for us, we have to do it for ourselves.