Energy access will be biggest driver of social, economic development in Africa – Seplat Energy CEO
Access to affordable, reliable and sustainable energy is crucial if Africa is to achieve all 17 United Nations Sustainable Development Goals (SDGs), and energy access will be the biggest driver of social and economic development in Africa going forward, the Chief Executive Officer, Seplat Energy Plc, Roger Brown has said.
Brown said this at the opening ceremony of the ongoing Society of Petroleum Engineers (SPE) Nigeria Annual International Conference & Exhibition (NAICE) 2023 held in Lagos. He spoke on the theme of the SPE NAICE 2023 dubbed ‘Balancing Energy Accessibility, Affordability, and Sustainability: Strategic Options for Africa’.
According to him, Nigeria needs to focus on enabling the entire energy value chain, from wells to payments. He emphasized on the need to create a resilient and efficient power grids and put in place an attractive regulatory and pricing regime to encourage investment and innovation across the chain.
“It is important to recognise that gas has a place as transition fuel and Africa has a right to use its resources. The country needs to encourage off-grid solutions for remote areas, leapfrog technologies by moving straight to renewables where it makes sense, and develop sales and distribution infrastructure for clean cooking fuel like bottled gas,” the Seplat Energy CEO said.
“Pricing must balance affordable energy with attractive returns for the companies providing it. We have to improve governance and attractiveness of African energy providers to ensure lowest cost of capital. There is the need to also increase investment in African energy from just 3% of global energy investment today. Cleaner cooking fuel must be a more attractive proposition than collecting wood, which is free, he added.
Global investment needed to achieve net zero target by 2050 is projected at $3.5 trillion per annum
(around 1.3% of annual global GDP), Mr. Brown said, pointing out that the headline figure hides some divergent dynamics and frictions.
He called for allocation of capital to developing economies which will be responsible for most of the growth in emissions, reallocation of capital away from hydrocarbon sector (divestment, restricting capital, engagement), and allocation of capital to low-carbon technologies.
Speaking on the need to ensure sustainability, the Seplat Energy CEO said increasing Africa’s access to energy should not come at the expense of the environment. “Africa has huge natural gas resources that can be utilised to deliver significant social and economic gains at low cost to the environment. Renewables were essential to achieve universal energy access across Africa. Africa also has significant mineral resources essential for batteries and fuel cells,” he explained.
Brown noted that “delivering universal access to energy across Africa will deliver huge social and economic benefits. But it will only be attractive if governments can create the right pricing and regulatory regimes to make it both attractive to invest, and affordable for consumers. Africa has the right to develop and must use its natural resources to do that.
“The transition cannot be funded solely by debt. Access to energy and energy security is critical and Africa needs affordable, reliable, sustainable and modern electricity for all as SDG7.”
Nigeria, he stated, needs to move away from reliance on diesel/petrol generators; as such move would improve health, and lower cost of electricity, which is severely holding back development in all sectors.
“Gas is the transition solution. Upstream oil and gas development is critical to fund the transition but needs to be much more efficient, as e need to eliminate theft /flaring / leaks, and operate with lower carbon intensity. Africa needs to balance the “E (environment)” and “S (social development)” and North and South must work together in a balanced way, which means we must balance energy security with affordability and sustainability,” the Seplat CEO advised.