text: POLICY, LEGISLATIVE AND REGULATORY CHALLENGES IN PROMOTING EFFICIENT AND RENEWABLE ENERGY FOR SUSTAINABLE DEVELOPMENT AND CLIMATE CHANGE MITIGATION IN NIGERIA BY PROFESSOR MUHAMMED TAWFIQ LADAN (LL.B, LL.M, Ph.D) PROFESSOR OF LAW, DEPARTMENT OF PUBLIC LAW, FACULTY OF LAW, AHMADU BELLO UNIVERSITY, ZARIA, KADUNA STATE, NIGERIA A PAPER PRESENTED: THE 3RD SYMPOSIUM AND 2ND SCIENTIFIC CONFERENCE OF ASSELLAU ORGANIZED BY: THE UNIVERSITY OF NAIROBI, FACULTY OF LAW/CASELAP, NAIROBI, KENYA VENUE: UNIVERSITY OF NAIROBI, KENYA DATE: 23TH – 25TH MARCH, 2009 POLICY, LEGISLATIVE AND REGULATORY CHALLENGES IN PROMOTING EFFICIENT AND RENEWABLE ENERGY FOR SUSTAINABLE DEVELOPMENT AND CLIMATE CHANGE MITIGATION IN NIGERIA BY PROFESSOR MUHAMMED TAWFIQ LADAN INTRODUCTION Nigeria"s indigenous energy resource development reveals that the country"s oil reserves (6th largest in the world) were put at 34 billion barrels for 2004 and 40 billion barrels by 2010, giving an effective growth rate of 2.746% per annum. At this growth rate, the reserves will reach 68.7 billion barrels by 2030, or double the 2004 value. Intense exploration activities are taking place in the off- shore fields from the Niger Delta, while the potentials of the inland Benue and Chad Basins are yet to be exploited. By 2000, 53.5% of natural gas reserves of 159 trillion sq. cubic ft (9th largest in the world) were associated gas. While the associated gas reserves will increase with oil reserves, there will be increasing activities in exploration for gas only. Corresponding substantial endowments of bitumen (31 billion barrels of oil equivalent and 2nd largest in the world), coal, hydropower and solar energy, as well as plans for their development, exist.1 Energy is essential for development. No developing society can hope to achieve economic sustainability without adequate energy supplies. Virtually every aspect of economic and social activity demands energy. The unavailability of modern forms of energy to some two billions of the world"s population, and inadequate supplies to an estimated additional two billions more people, is a major challenge to the achievement of the poverty, gender and health objectives of the UN Millennium Development Goals and the Plan of Implementation of the World Summit on Sustainable Development. At the same time, energy generation using fossil fuels is the principal source of greenhouse gas emissions that are causing global warming. The mining and processing of fossil fuels can also endanger the lives of miners, cause severe land disruption and pollute land, air and waters. Furthermore, burning fossil fuels emits nitrogen and sulphuric oxides that are themselves toxic and are the precursors of urban smog and acid rain, while coal burning power stations are responsible for mercury emissions that bio accumulate in ecosystems, presenting a threat to human health as well as the environment. Providing the energy essential for development while minimizing environmental hazards is one of the principal challenges of the twenty-first century. Energy efficiency offers perhaps the greatest potential to greatly reduce the amount of polluting energy needed to achieve current and future development targets. By eliminating waste, efficiency can often be accomplished at a profit or with a very short payback period of a year or two. Renewable energy, in the form of energy produced from solar, wind, sustainable managed hydro, geothermal and biomass resources, offers the potential to significantly displace the need for polluting fuels. These renewable resources are emphasized 1 in the Plan of Implementation of the World Summit on Sustainable Development. This paper therefore contends that while much has been written about the science, technology and policies for promoting energy efficiency and renewable energy, little has been written about the legislative and regulatory options necessary to implement these technologies and policies that make a reality in practice. By promoting clean and efficient energy use at the legislative and regulatory levels, governments can ensure that all stakeholders have the opportunity and incentive to adopt new practices that will help to mitigate climate change2 and reduce pollution while keeping the path of economic and social development. It is against this background that this paper seeks to realize the following objectives: - 1. To underscore the importance of efficient and renewable energy to produce electricity for the mitigation of climate change and sustainable development in Nigeria;3 2. To provide an overview of the policy, legislative and regulatory measures available to promote energy efficiency and renewable energy in Nigeria; 3. To highlight the challenges and strategies to overcome the barriers to use and regulation of renewable and efficient energy for electricity in Nigeria. PART ONE: - THE IMPORTANCE OF EFFICIENT AND RENEWABLE ENERGY TO PRODUCE ELECTRICITY FOR THE MITIGATION OF CLIMATE CHANGE AND SUSTAINABLE DEVELOPMENT IN NIGERIA 1.1 Background Coal has been superseded as the chief source of Nigeria's electric power by oil, natural gas, and newly developed hydroelectric facilities. In 1969, the 11,500 MW Kainji Dam, 100 km (62 mi) north of Jebba, was inaugurated. The N£87.6-million dam was built with loans from the IBRD ( N£34.5 million), the United Kingdom, the United States, Canada, Italy, and the Netherlands. The 560 MW Jebba plant on the Niger, the 600MW Shiroro plant on the Kaduna, and a 1,320MW thermal station at Igbin, near Lagos, were also expected to add to hydroelectric capacity. Hydroelectric production accounted for 35.9% of total power generation during 2000, thermal for the rest, based almost entirely on oil or gas for fuel. Installed capacity in 2001 totaled 5,888,000kW. Electricity produced in 2000 totaled an estimated 15.9 billion kWh. About 40% of the population, and only 10% of rural households, had access to electricity as of 2002.4 2 However, in a more recent 2006 National Survey, more than four in every five households (85.3 per cent) in the urban areas reported having access to electricity, which was more than the 54.1 per cent national figure. Majority of the southern zones recorded high access to electricity. More than 60 per cent of households in the South-East had access to electricity. South-South"s figure was 61.2 per cent and South-West"s, 78.1 per cent. The households in the North-East had the least access to electricity among the six zones. The study further revealed that 38.1% of the rural populace, 12.1% of the rural poor and 29.8 of the urban poor populace in Nigeria had access to electricity.5 For Nigerians, the quest for uninterrupted electric power supply has been a long story of dashed hopes and expectations. Despite the promises by successive administrations in the country to accord priority to the provision of efficient and renewable energy to produce adequate electricity for sustainable development, Nigerians have continued to experience epileptic electric power supply for their different needs.6 1.2 Energy Needs for Different Economic Activities in Rural Areas of Nigeria7 The basic needs of the poor, rural inclusive are jobs, food, health services, education, housing, clean water and sanitation. Energy plays an important role in ensuring these services. The more accessible it is, the higher the consumption by human beings, the poor inclusive. Basic energy services are cooking, lighting and heating, whereas the corresponding energy consumed per capita per year in MJ are 948, 46, 46, totaling 1,040 MJ per capita per year. Supply strategies usually are linked to economic, social and environmental concerns. Rural energy resources in Nigeria can be classified as traditional and commercial. Traditional energy resources such as fuelwood, cow dung, agro- residues, charcoal, etc. Commercial energy resources such as kerosene, candles, torches, gas (LPG) and electricity. The real challenges in primary energy mix well into the 21st Century for energy sustainability by World Energy Council (WEC) are how to develop cleaner combustion technologies and how to cover the real cost of fuels and energy services. Today, WEC"s regional programs in Asia, Africa, Latin America and the Caribbean, and Central/Eastern Europe are focused on facilitating provision of access to a minimum of 500 kWh of reasonably priced electricity or its equivalent to every person in the world by 2020. 3 The energy projects that will contribute to this will bring commercial energy to a new market such as urban poor/rural poor, in a developing country, like Nigeria, in a way that quantifiably reduces or eliminates emissions at the local, regional, or global levels. Broad patterns of global energy use in rural areas, gives: 1. Households – 85% of total, traditional energy, with end-use in cooking and heating. 2. Agriculture – 2-8% of total, commercial energy, with end-use in the powering of mechanical equipment and pumps. 3. Rural Industries – 10% of total, mixture of traditional and commercial for motive power use usually. The Energy Commission of Nigeria (ECN) Rural Energy Surveys8 show that the energy consumption sectors are similar to the broad global lines discussed above, with addition of other services. One influencing factor in energy consumption is the income-level. Low income level consumes energy primarily in cooking, whereas medium income level will add lighting to its consumption and the high income level will add water heating, refrigeration and cooling to the other two end uses. Another interesting observation from the analysed data is the absence or inadequate skills in the Local Government Authorities for sustenance of the energy systems. This is because the traditional energy conversion technologies in use are rudimentary, limited in capability and generally inefficient. This raises the need for training and capacity building for the sustenance of energy conversion technologies of modern energy services. Energy end-use are primarily and on the average for lighting, cooking, drying, heating, transportation, agriculture and industrial activities. Economic activities are location specific with common ones such as sawmill, brick making, garri processing, bakery and furniture making. The end-use energy requirements for different economic activities in the rural areas are given in table 1 below: Table 1: - Economic Activities & Energy requirements in the Rural Areas9 S/N ACTIVITY USE KW 1. Agro-Processing Flour grinding 1-2 Oil expelling 2-5 Crop drying - Threshing - 2. Small-Scale Industry Saw-milling 10-30 Wool and Cotton Processing 5-25 Stone Crushing 5-25 3. Household Lighting 0.2 Refrigeration 0.3 Cooking 0.4 (heat storage cooker) Water-pumping 0.5-1 Ironing 0.5 4 Radio/TV 0.1-0.3 The urban poor also are dependent on small-scale manufacturing and repair services for income. Fuelwood is still mainly used for small-scale production of bread and other products, thereby increasing the problem of environmental pollution. However, some of these enterprises may become increasingly sustainable and economical if modern energy services are used. The use of modern energy services would improve the quality of life and livelihoods and increase potentials for income generating activities. Table 2 below reveals the National Energy Consumption pattern as reported by a recent National Energy Study for the industrialization of Nigeria (2006-2030)10 which took into consideration the thinking of government in terms of the overall economy and the energy sector. Table 2: - Summary of National Energy Consumption Computations for the Household Sector11 Fraction of households with A/C 10.71% Fraction of households with Water Heater 7.14% (Gas)LPG Kerosene Coal Fuelwood Electricity % HH Using an Energy Type for Cooking 12.50% 76.79% 1.79% 67.86% 7.14% % HH Using an Energy Type for Water 8.93% 67.86% 0 66.07% 25.00% Heating % HH Using an Energy Type for Lighting 0 87.50% 0 0 42.86% Ave Annual Energy Cons. Per HH For cooking (Unit/household) 22.06 34.79 2275.75 21.27 For water heating (Unit/Household) 3.47 7.86 785.61 132.66 For Lighting (Kg/Household) 0 52.7 0 291.75 National consumption per yr For cooking (Unit*) 1.65x108 6.59x108 4.31x1010 4.03x109 For water heating (Unit*) 2.60x107 1.49x108 1.49x1010 2.51x109 For Lighting (Unit*) 9.98x108 0 5.53x109 For A/C (Unit*) 2.20x109 For Appliances (Unit*) 2.90x109 Total (Unit*) 1.91x108 1.81x109 2.03x107 5.80x1010 1.35x1010 National Consumption (TOE) For Cooking (TOE) 178.63 548217.3 1.40x1010 89811.29 For Water Heating (TOE) 28.09 123860.2 4.83x109 560033.5 For Lighting (TOE) 830358.9 0 1231697 For A/C (TOE) 0 0 490974.6 For Appliances (TOE) 645586.2 Total (TOE) 206.72 1502437 1.88x1010 3018102 * National units of the fuels are as follows: (Gas) LPG (kg), Kerosene (litre), Coal (kg), Fuelwood (kg), Electricity (KWh). 1.3 Implications of Climate Change for the Energy and Industrial Sectors of Nigeria.12 5 Climate change, and more specifically the carbon emissions from energy production and use, is one of the most troubling problems facing society today. Climate change engages the energy sector particularly closely because energy is central both to the problem and to its solution. Hydropower generation is the energy source most likely to be affected by climate change. It is sensitive to the amount, timing, and geographical pattern of precipitation, as well as temperature. There is the potential for more intense rainfall events (which would require more conservative water storage strategies to prevent flood damage), greater probability of drought (less hydroelectric production), and less precipitation (less water available during warm months); all of which point to less hydroelectric capacity at current powerhouses. Reduced flows in rivers and higher temperatures reduce the capabilities of thermal electric generation. Higher temperatures also reduce transmission capabilities. Hydropower generation will be affected by increased run-off (and consequent siltation). Excessive drought will lead to higher evapo-transpiration, which adversely affects water volume, and will thus reduce hydroelectric capacity. Excessive drought, which is likely to affect forest cover, will also pose problems for fuel wood supply. Oil and gas production, especially in coastal areas, will be negatively affected by increased wind and wave action, heavy precipitation, and shoreline erosion. It will also be affected by the loss of oil and gas extraction infrastructure due to sea-level rise and coastal inundation. Climate change-induced extreme weather events such as windstorms, floods and tornadoes (which can topple transmission towers and hundreds of kilometres of power lines) will exacerbate the rate of failure of transmission systems of electric utilities. The cost implications are prohibitive. Yet demands for both space- cooling and space-heating can only increase, placing further dependence on this already burdened industry. Two categories of industries were identified as being vulnerable to climate change: (1) industries with activities that are dependent on climate (construction, transportation operations and infrastructure, energy transportation and transmission, offshore oil and gas production, thermal power generation, industries, such as paper mills, that depend heavily on water, pollution control, coastal-sited industry, and tourism and recreation), and (2) sectors in which economic activity is dependent on climate-sensitive resources (agro-industry, biomass and other renewable energy production). Industries, generally, may be exposed to direct or indirect impacts of climate change. Such potential impacts of climate change will depend on a number of factors, which include: 1. The geographic location of such industries (Coastal and northern dry belt zones). 2. The nature of resource inputs used by the industry (which are climate- dependent (such as agro resources)). 3. The dynamics of consumer behaviour. 6 4. Government policies pertaining to climate change. The imposition of carbon taxes, for example, would increase the cost of production inputs. 5. Other industries: such as construction, housing, transportation, energy generation and distribution, are all affected by the incidence of extreme weather and weather-related conditions. 1.4 Energy Efficiency and Renewable Energy13 Energy efficiency measures are a proven means to reduce dependence on traditional energy resources by using them more efficiently. With respect to electricity supply, for example, the typical power plant uses only 30% of its fuel for producing electricity; the remaining 70% of the fuel produces heat that generally is exhausted through tall stacks into the atmosphere. If the waste heat is used instead for additional power production, for industrial processes or for heating buildings, the efficiency of the fuel use can be more than doubled, often to as much as 70%. Similarly, an industry that uses large amounts of heat in its processing often can produce very low cost electricity in conjunction therewith. The technology for achieving these savings is called "combined heat and power" or "cogeneration." Building efficiency and appliance efficiency measures can save a large percentage of the fuel required for these large-consuming applications. Energy from the light of the sun (photovoltaic) can be used to produce electricity. While the equipment is expensive, maintenance requirements are minimal and there are no fuel costs. They are far less costly for rural areas not covered by grid electricity than building new power plants and grid distribution systems. Energy from the heat of the sun (solar thermal) can be used economically to heat water and homes. Both these forms of solar energy also can be used in large arrays to produce central station power. Energy from biomass (agricultural and wood wastes) is particularly advantageous for developing countries because local products and labor can be employed. Energy crops can be grown, as demonstrated in Brazil, to produce ethanol to fuel vehicles and industrial processes, avoiding the need to import oil. Hydroelectric energy for electricity is the most widely used renewable energy resource today with many developing country applications. Construction of large hydroelectric dams has substantial problems of displacement of populations and agriculture and of siltation that diminish their usefulness over time of displacement of populations and agriculture and of siltation that diminish their usefulness over time. Decay of plant life in the dam reservoirs produces significant amounts of carbon dioxide. The effectiveness of the dams can be serious impaired by droughts, leaving insufficient flows to produce expected electricity outputs, as demonstrated recently in Brazil where electricity had to be rationed because of drought-related water shortages. Still, hydropower produces no other pollutants, requires little maintenance and is often economically advantageous. Small dams and installation of turbines in fast- 7 flowing rivers without the use of dams can be very advantageous, minimizing environmental problems. Where dams already exist, adding power generation also is attractive. Geothermal energy from the heat of the earth, where available, can be used economically to produce hot water and steam for electricity. 1.4.1 Brief Overview of Rural Applications of Efficiency and Renewable Energy14 Some who currently lack access to modern electricity in developing countries will be served by central grid connections, connecting villages and remote areas to a national grid often owned and operated by a public utility. This tendency to incrementally extend grid to remote communities, however, increases costs particularly for those areas that are farther from the national grid. Predictably, remote areas with very small populations may remain unconnected. Due to a lack of access to modern electricity, rural populations resort to burning large quantities of wood to satisfy their everyday energy needs. For example, much of the cooking in developing countries is done on wood or coal burning stoves. Use of wood requires women and children to spend much of their time and energy collecting firewood. Using either wood or coal for cooking in enclosed buildings exposes occupants, particularly women and children, to very concentrated health-damaging emissions and contributes considerably to carbon dioxide and other pollutant emissions. Wood burning also causes other severe harm to the environment, including rapid deforestation, followed by irreversible biodiversity loss. Rural off-grid electrification can provide a viable alternative to grid electrification as the cost of off-grid technologies continues to decline. Costs will decline because of proven and improved technologies, and increased demand and production. There are examples of both public and private-sector-led markets for off-grid electrification in rural areas of developing countries. These decentralized off-grid generation technologies have been demonstrated, for example in small-scale hydropower, photovoltaic, wind, and geothermal and small-scale bio power using producer gas electrification projects. There are demonstrated experiences, for instance, in China, India, Kenya and Nigeria.15 Other alternatives to wood burning for cooking, for example, include: Fuel-efficient stoves that reduce wood and coal consumption and polluting emissions. Hybrid fuels that incorporate biomass waste and reduce the harmful effects of coal burning. Biogas units that yield gas from waste agricultural materials and improve sanitation while providing fuel for cooking and lighting. Use of Improved building materials and passive solar construction that reduce heating needs. 8 Micro-hydropower and other renewable energy generators that provide clean electricity to rural off-grid communities. Kenya"s Rural Electrification Programme16 involves a government plan to invest $13 million (US) annually to increase access to electricity in rural areas by modern forms of energy. Kenya has an outstanding cooking stove program, having adapted a Thai bucket ceramic-lined charcoal-burning stove that saves between 20% and 50% of the fuel otherwise used and now costs only $1-3. There are now about 900,000 of these "jiko" stoves in Kenya, reaching about 60% of urban households and 20% of rural homes. About 200 local firms produce the stoves. The Kenya program has been adopted in Tanzania, Uganda and Rwanda. China established a National Improved Stove Program in 1992, which has provided over half of China"s rural households with improved stoves. China also started to manufacture, install and service the stoves. Some 160 million cooking stoves were upgraded between 1982 and 1998 at a cost of $158 million in government support. The unit cost per stove was $9. Inexpensive efficient stoves are available and in use in many places around the world now, which both reduce the amount of fuel needed and pollutant emissions. 1.5 Nigerian Initiatives in Climate Change Mitigation Measures/Efficient and Renewable Energy Technologies. a. Climate Change Mitigation Measures. National inventories to estimate the annual emissions of greenhouse gases have been undertaken in Nigeria for three years (1988, 1990 and 1994) and reviewed between 2001-2004,17 using frameworks provided by the IPCC and other agencies. An emissions profile by sector indicates that CO (carbon dioxide) emissions has been dominated by the energy sector (for which gas-flaring, electricity generation and transport sectors are most significant sources), and land-use change (with biomass harvests and forest conversion to managed lands as principal sources, while annual forest growth remains the principal sink or source of carbon removals). The major contributors to CH emissions include energy conversion and transformation, stationary sources, upstream oil and gas systems, livestock and rice cultivation. Similarly, the principal contributors to NO (nitrous oxide) emissions include energy conversion and transformation, stationary sources, savannah burning and agricultural soils. For the precursor gases, CO and NO emissions are principally from identify all studies undertaken with the primary objective of assessing emissions inventories and options for mitigation; identify all studies which were undertaken with the primary objective of assessing mitigation options; energy conversion and transformation sources, stationary sources, mobile sources, gas-flaring, savannah-burning, field- burning of crop waste, and forest conversion to agricultural lands; while NMVOC emissions arise primarily from energy conversion and transformation, 9 mobile sources, industrial processes (paint production), and municipal solid waste management. The actual results of the analysis of emissions inventories collected (Table 3) indicate that between 1988 and 1994, the gross annual emissions were in the range of 178 to 192 Tg-CO, 2.7 to 5.9 Tg-CH , 11.95 to 18.55 Gg N O, 13.3 to 17.0 Tg CO, 404.3 to 658.3 Gg NO and to 1.0 to 2.2 Tg NMVOC. Inventories by sector have been additionally undertaken in some industrial sub-sectors, including agriculture. Results (in Table 3 below) indicate that the energy sector still dominates the other sectors in its contribution to gross national emissions. Table 3: - Summary of National Emissions in Nigeria Between 1988 and 1994 10 Table 4 : - Sectoral and Gross Carbon Dioxide-Equivalent Emissions for the years 1988 to 1994 Mitigation analyses have been undertaken to provide options for the reduction of CO emissions in the energy and forestry sectors. No similar analyses are yet available for CO in the other sectors and for non-CO GHG reduction in all sectors. The most expensive options for CO reduction in the energy sector are mostly in the transport sector (with the introduction of fuel-efficient road transport vehicles), and gas-flare reduction in the oil industry. Regrettably, gas- flare reduction has the largest CO reduction potential in the Nigerian energy system but at a cost of about $50 per tonne of CO reduction. The ranking of mitigation options in the forestry sector identified three mitigation options as the most promising: afforestation, agroforestry and forest protection. Considering carbon flow alone, the afforestation option is the best, with a carbon pool of 175.20 tonnes of carbon per hectare. Agroforestry and forest protection follow closely, with carbon pools of 153.00 and 131.10 tonnes of carbon per hectare respectively. In terms of land management for climate change mitigation, agroforestry is probably the best. Also, agroforestry is more efficient economically than the afforestation option in meeting the wood needs of the country. In general, the agroforestry option would seem most desirable. It is recognized that currently available data have serious gaps and limitations. Apart from this, the latest inventory and mitigation analysis data are for the year 1994 reviewed 2001-2004, which is approximately eight years behind 11 the project period. Without recent and reliable data, the development of policies and action plans to manage emissions, or to forecast future impacts with the hope of providing adequate adaptation strategies would be difficult. As well, without adequate reliable and recent data, the participation of Nigeria in emerging issues such as carbon-trading and the development of a sustainable development framework to enable the country respond to its obligations under the UNFCCC would be difficult. Data quality, inadequate data, institutional and human resources barriers have been identified as militating against the overall success of the Nigerian effort to provide information on emissions and mitigation options. These are compounded by the lack of an institutional framework to drive and propel these efforts. It is therefore recognized that an institutional framework to ensure the development and implementation of a national emissions data system in Nigeria has now become mandatory. b. Initiatives in Efficient and Renewable Energy Technologies18 Modern and efficient technologies have been used to develop and adopt devices for the utilization of renewable energy resources by the following Research Centres of the Energy Commission of Nigeria: a) Center for Energy Research and Development, Obafemi Awolowo University, Ile-ife, Osun State; b) Centre for Energy Research and Training, Ahmadu Bello University, Zaria, Kaduna State; c) National Centre for Energy Research and Development, University of Nigeria, Nsukka, Enugu State; d) Sokoto Energy Research Center, Usman Dan-Fodio University, Sokoto, Sokoto State. The Centres at Ile-Ife and Zaria work on peaceful application of Nuclear Science and Technology while those at Nsukka and Sokoto work on solar energy and other renewable energy sources. Raw materials used for some of these devices have more than 90% local contents. Some of these appliances include: Solar Crop Dryers (such as the 2 tonne capacity Rice Solar Dryer at Agbani, Enugu State and 2 tonne capacity Forage Solar Dryer at National Agricultural Production Research Institute, Ahmadu Bello University, Zaria, Kaduna State), which can be used to process agricultural products such as rice, maize, pepper, tomatoes, cocoa, tea, and coffee; Solar Water Heaters for providing hot water in hotels and hospitals for bathing and washing, such the 1000 litre capacity Solar Water Heater at the maternity ward of Usman Dan-Fodio University Teaching Hospital, Sokoto, Sokoto State; Solar PV Water Pumping for clean potable water, such as the 7.2k Wp Solar PV Plant at Kwalkwalama in Sokoto, the 2.85kWp Solar PV Plant at 12 the centre for mentally-ill Destitutes at Itumbuzo in Abia State and the 5.00kWp Solar PV Plant at Comprehensive Health Centre in Laje, Ondo State; Biogas Plants for cooking gas and bio-fertilizer, such as the 20m3 Biodigester at Ifelodun Cooperative Farm at Agege, Lagos State, the 10m3 biogas plant at Achara in Enugu State and the 30m3 biogas plant at Zaria Prison in Kaduna State; and 5kWp wind power plant at Sayya Gidan Gada in Sokoto State; The Energy Commission of Nigeria, the Power Holding Cooperation of Nigeria and MTN-Nigeria are collaborating with the World Bank on a bio- fuel for rural electrification project in Nigeria. The bio-fuel is to be sourced from Jatropha Plant or any economically viable energy crop on a long term basis. Similarly, the Energy Commission of Nigeria signed another MOU with Green Shield of Nigeria (a registered NGO with diversed interest in alternative energy sources etc) to produce bio-diesel as a renewable energy for domestic and commercial uses in Nigeria, using Jatropha plant; PART TWO: - OVERVIEW OF THE POLICY, LEGISLATIVE AND REGULATORY MEASURES AVAILABLE TO PROMOTE ENERGY EFFICIENCY AND RENEWABLE ENERGY IN NIGERIA 2.1 Policy Goals for Efficiency and Renewable Energy Decision-Making What policy goals can guide rural applications of efficiency and renewable energy decision-making in developing countries?19 Sustainable development in developing countries can hardly be achieved without rural applications of efficiency and renewable energy, thus underscoring the necessity for a dynamic and efficient legislative and regulatory system. All such regulatory systems must require a number of tasks to be performed: as an exercise of policy-making. The goals of rural applications of efficiency and renewable energy regime must be established; those goals must then be translated into the principles and rules that control behavior of the principal actors; and there must be procedures for explicating and enforcing the principles and rules and for the adjudication of disputes arising from them. While there is no single logarithm for determining universally applicable policy goals that can guide rural applications of efficiency and renewable energy decision-making, the policy goals, however they are couched, can amongst others stress the need to: Promote rural applications of efficiency and renewable energy in all its ramifications; Maintain fair, just and reasonable rates for rural electricity consumption; 13 Ensure uninterrupted electricity to rural areas; Promote rural energy efficiency; Promote technological innovations and transfer of renewable energy technologies to rural communities (and to the people who would directly benefit from their use); Facilitate and encourage effective competition, education, training and public participation; Improve people"s lives and livelihoods; Meet goals of sustainable development, including obligations and norms per multilateral environmental agreements such as those for greenhouse gas emissions reductions. 2.2 National Electric Power Policy, 200120 The overwhelming objective of the Electric power policy Statement is to ensure that Nigeria has an ESI (electricity supply industry) that can meet the needs of its citizens in the 21st Century. This will require a fundamental reform at all levels of the Industry. A technically and commercially efficient ESI is critical for achieving Nigeria"s growth and development goals. The priority is to create efficient market structures, within clear regulatory frameworks, that encourage more competitive markets for electricity generation and sales (marketing), which at the same time, are able to attract private investors and ensure economically sound development of the system. This will ensure that, the demand in an efficient and economically viable manner. The policy objectives are divided into the short-to-medium term (3-5 years) and the long-term (to commence beyond 5 years). 2.3 Nigerian Electricity Regulatory Commission21 A privatized electricity industry, with competition over monopoly transmission and distribution grids, requires an effective regulatory agency that is independent both of Government and of all the companies operating in the industry. The Ministry of Energy is responsible for providing in a new Electricity Law for an independent regulatory body that: i. has clear appointment and dismissal rules; ii. has a source of independent funding; and iii. faces appropriate checks and balances to ensure that regulation not only operates in a fair transparent way but is also seen to operate in a fair and transparent way. Hence, an independent regulatory agency for electricity in the form of a Regulatory Commission shall be called the Nigerian Electricity Regulatory Commission (NERC), based on the following regulatory arrangements among others. 14 i. NERC will be an independent Federal agency and electricity regulator for grid connected services; ii. NERC will have decision making powers on the key aspects technical and economic regulation (viz: tariff regulation, approval of capacity expansion plans and regulated company business plans, oversight of capacity, tending, competition, standards, quality of service, service obligation etc); The objective of this policy is ultimately to establish a log-term electricity market structure in Nigeria in which multiple operators provide services on a competitive basis to the broadest range of customers. Under such a regime, competitive market forces would be the best determinant of the appropriate and sustainable levels of prices charges by various carriers for their services. Experience in Nigeria demonstrates that people are willing to pay more than the current rates for efficient services. Many businesses, large and small, run generators that provide power at a cost many times higher than the level of PHCN prices. Similarly, many villagers pay significantly more for electric power from off grid sources than comparable households in villages connected to the grid. Both of these demonstrate a willingness to pay higher prices for a more reliable service. It is likely that for some interim period active competition will not fully develop throughout the market, leaving one or more dominant operators with the power to control pricing. In these circumstances, it is appropriate for the Nigerian Electricity Regulatory Commission to establish tariff regulation requirements for such dominant operators, which will ensure that service prices are cost-oriented, that consumers" and competitors" interest are protected, and that the industry develops in the most efficient manner possible. The Nigerian electricity fuel mix will, of course, continue to use and expand the use of hydro generation, renewable and will continue to use some liquid fuels. Nevertheless, natural gas (and the use of currently flared associated gas) represents the major likely fuel for the future expansion of generation. In addition, gas powered electricity generation is the most obvious growth market for the commercial development of gas markets and will be explored by the Independent Power Projects (IPPs). 2.4 National Energy Policy, 200322 The policy objectives and implementation strategies have been carefully defined with the fundamental guiding premises that energy is crucial to national development goals, and that government has a prime role in meeting the energy challenges facing the nation. Furthermore, the dependence on oil can be reduced through the diversification of the nation"s energy resources, aggressive research, development and demonstration (R,D & D), human resources development, etc. 15 Consequently the overall energy policy objectives may be summarized as follows: i. To ensure the development of the nation"s energy resources, with diversified energy resource options, for the achievement of national energy security and an energy delivery system with an optimal energy resource mix. ii. To guarantee increased contribution of the energy sector to national income and to productive activities. iii. To guarantee adequate, sustainable and reliable supply of energy at appropriate costs and in an environmentally friendly manner, to the various sectors of the economy, for national development. iv. To guarantee an efficient and cost effective consumption pattern of energy resources. v. To accelerate the process of acquisition and diffussion of technology and managerial expertise in the energy sector and indigenous participation in energy sector industries, for stability and self-reliance. vi. To promote increased investments and development of the energy sector industries with private sector participation. vii. To foster international co-operation in energy trade and projects development in both African region and the world at large. viii. To successfully use the nation"s abundant energy resources to promote international co-operation. ix. To ensure a comprehensive, integrated and well informed energy sector plans and programmes for effective development. In terms of energy sources in Nigeria the policy took cognizance of the fact that the nation is clearly over dependent on crude oil for its foreign exchange earning; hence the economy is vulnerable to the unstable nature of the international oil market. Therefore there is a need to promote the expansion of the processing sub-sector to allow for the export of value-added petroleum products. Furthermore, it is desirable to diversify the domestic energy mix away from ever-increasing consumption of petroleum products in order to avert any possible conflict between domestic and export requirement. Oil will continue to play a major role in the nation"s economy, hence the need to expand the reserve base through continuous exploration activities. Further, the energy policy recognizes natural gas as another vital energy source. Nigeria"s natural gas reserves estimated at about 164 trillion standard cubic feet are known to be substantially larger than its oil resources. Gas discoveries in Nigeria are incidental to oil exploration and production activities. At present, about 70% of gas produced (mainly associated gas) is flared. In view of the increasing domestic oil consumption, an economically optimal strategy to replaced oil with gas and gas derivatives will enhance the availability of more oil for export. This will also promote the conservation of the oil reserves. Apart from 16 the economic advantage, fuel substitution from oil to gas is more environmentally friendly because gas is a cleaner fuel than oil. Given the current reserves and rate of exploitation, the expected life-span of Nigerian crude oil is about twenty five years. It is therefore strategically important to undertake major investments in the gas sector in order to prepare adequately for gas as a substitute for oil both for domestic needs and foreign exchange earnings. The continued flaring of natural gas has resulted in a substantial waste of energy resources, in addition to contributing to atmospheric pollution. It is therefore imperative to take effective measures to curtail gas flaring consistent with the level of domestic gas exploitation and our international obligations with regards to the environment. Tar sands as another energy source are known to exist in Nigeria. The deposit is preliminarily estimated to contain a total reserve of about 30 billion barrels of oil equivalent. The heavy crude from the tar sands can be a major feedstock for Kaduna Refinery which refines heavy crude with similar properties that is now being imported. Bitumen, which is derive from tar sands, is used in road construction and it is also used in electrical, chemical, petrochemical and other industries. If properly harnessed the tar sand resources in the country would contribute immensely to the nation"s energy resource base. Accordingly, the energy policy, the nation shall encourage tar sands exploration, exploitation and development for full utilisation by the country. This is with a view to achieving the following objectives: - i. To extract heavy oil from the tar sands for refineries. ii. To conserve foreign exchange used in importing heavy crude oil. iii. To acquire the technology for harnessing the tar sand. The policy adopts the following strategies in order to realize the above objectives: - i. Undertaking exploration activities for tar sands deposits in the country. ii. Establishing infrastructural facilities for the acquisition of the technology for harnessing tar sands. iii. Intensify heavy oil upgrading facilities near the tar sands deposits. iv. De-emphasising the importing of heavy crude oil as a way of encouraging the utilisation of heavy oils from our tar sands. Under the energy policy, coal is another source, where available data show that coal of sub-bituminous grade occurs in about 22 coal fields spread in over 13 states of the Federation. The proven coal reserves so far in the country are about 639 million tones while the inferred reserves are about 2.75 billion tones. 17 Coal production in Nigeria started in 1916 with an output of 24,500 tonnes for that year. Production rose to a peak of 905,000 tonnes in the 1958/59 year with a contribution of over 70% to commercial quantities in 1958 and the conversion of railway engines from coal to diesel, production of coal fell from the beginning of the sixties of only 52,700 tonnes in 1983. This excludes the civil war years and the period of 1970 and 1971 during the reconstruction years when there was little or no production. Production rose to about 100,000 tonnes in 1991, with part of it being for export, in 1980 coal contributed less than 1% to commercial energy consumption in the country as compared to 70% for oil, 25% for natural gas and about 5% for electricity. Coal deposits in Nigeria can be utilized for power generation, production of steam and hot air for process heat and drying applications, heat source and reducing agent for steel production, cement production, domestic fuel, source of chemicals, liquid and gaseous fuels, feedstock for battery, carbon electrode and brick making industries, etc, all the above potentials of coal need to be effectively harnessed into the country"s energy delivery system and export commodity mix through the development of a vibrant coal industry. From the onset of coal production in Nigeria, the Nigerian Coal Corporation had been the only institution active in the coal industry. In 1990 the Federal Government approved the full commercialization of the Corporation. Consequently, joint venture arrangements with foreign partners have developed for the exploitation of some of the coal deposits. There is however the need for increased participation of indigenous companies in the activities of the coal industry. The nation"s coal industry faces some daunting challenges which need to be addressed if the potential for coal utilization is to be optimally exploited. One of the major problems is that of the low productivity of the coal mines and consequently the high cost of production of Nigerian coal. This is mainly due to limited mechanization of the coal mines. Another problem relates to the lack of cost-effective transportation system for carrying the coal from the mines to consumers far away. Presently the price of coal doubles roughly every 100km from the mines due mainly to high transportation costs. It is therefore imperative that the present national rail system and port facilities be expanded and made more effective to meet the needs of the coals industry. Hence under the energy policy: - i. the nation shall continue to pursue vigorously a comprehensive programme of resuscitation of the coal industry; ii. extensive exploration activities to maintain a high level of coal reserves shall be carried out; iii. the exploitation and utilization of the coal reserves shall be done in an environmentally acceptable manner; 18 The Energy Policy recognizes the fact that Nuclear energy is one of the major sources of base-load electricity generation the world today. The technology for harnessing nuclear energy demands great responsibility and therefore requires careful planning of the manpower development and material resources. Coordinated approach to research, training and development in the areas of nuclear science and technology in Nigeria started in 1977 when nuclear energy research centres were established in two universities. Thus, the few trained personnel in the areas are concentrated in these two centres. There is therefore an urgent need to accelerate the manpower development programme in view of the diverse peaceful applications of nuclear energy. Of importance to any nuclear programme is the availability of nuclear minerals such as uranium and thorium. In 1947, pyrochlore containing uranium was found in appreciable quantities on the Jos Plateau and its environs; but there is still no established method of commercial extraction of the uranium. By 1979, about 617,000 km2 of land area had been covered by aerial radiometric surveys and another 90,000 km2 had been covered by other surveys. At present there are on-going efforts to ascertain the extent of radioactive mineral deposits widely believed to exist in some parts of the country. There is also the need to extend investigations to other areas of the country suspected to have traces of any of the radio-active minerals and to place the management and all scientific investigations under the control of Nigerians. Uranium ores are complex assemblages of minerals and therefore differ widely in details of composition and textured. The characterization of the different uranium ore minerals in the country is being carried out. There is however the need to develop the extraction processes for each of them, on the addition to the generation of electricity, nuclear energy finds many other peaceful applications. Infact it has been in use in the country for decades for various peaceful applications in health care delivery system, agriculture, food preservation, animal husbandry, pest control, industry and mineral exploration. All these applications will be enhanced by the acquisition of nuclear research reactor. There is also the need for a law regulating the use of radioactive substances and machines capable of producing ionizing in order to protect the populace from the hazards of radiation. Hence that Energy policy states that the nation shall pursue the exploitation of nuclear energy for peaceful purposes. This is with a view to achieving the following objectives: - i. to pursue the introduction of nuclear power into the generation of electricity; ii. to apply nuclear science and technology in industry, agriculture and medicine; iii. to pursue the exploration of nuclear resources in the country; iv. to institute nuclear safety and environmental protection measures; 19 v. to promote the development of nuclear science and technology. The Policy provides for the following strategies: - i. Intensifying manpower development in the utilization of nuclear energy for peaceful purposes. ii. Evolving appropriate laws and regulations to ensure adequate protection for the public and the environment. iii. Intensifying research and development efforts in nuclear science and technology. iv. Developing an appropriate institutional framework and infrastructure for the development of nuclear science and technology in the country. v. Creating incentives for career development campaigns on applications of nuclear technology. vi. Identifying accurately the availability and the extent of nuclear fuels and other materials. vii. Providing adequate funding for the development of nuclear science and technology. viii. Fostering co-operation with the International Atomic Energy Agency. Moreover, the National Energy Policy recognizes hydropower as one of the major sources of base-load electricity generation. Despite its high initial capital cost, hydropower provides one of the cheapest and cleanest sources of electricity. The country is well endowed with large rivers and some few natural falls which are together responsible for the high hydropower potential of the country. The Rivers Niger and Benue and their several tributaries constitute the core of the Nigerian river system which offers a renewable source of energy for large scale (greater than 100 MW) hydropower development. In addition, several scores of small rivers and streams do exist and can be harnessed for small scale (less than 10 MW) hydropower projects. The total technically exploitable large-scale hydro-power potential of the country is estimated at over 10,000 MW capable of producing 36,000 GWh of electricity annually. Only about one fifth of this potential had been developed as at 2007. The small-scale hydropower potential is however yet to be established. There is the need to develop small-scale hydropower plants for the provision of electricity for the rural areas and remote settlements. In Nigeria, hydropower generation accounts for a substantial part of the total electricity generation mix. In 2007, hydroelectricity represented over 37% of the total electricity produced nationwide. Accordingly, the Energy policy states that: - i. The nation shall fully harness the hydropower potential available in the country for electricity generation. 20 ii. The nation shall pay particular attention to the development of the mini and micro hydropower schemes. iii. To ensure minimum damage to the ecosystem arising from hydropower development. iv. To attract private investments into the hydropower subsector. This is with a view to achieving the following objectives: - i. To increase the percentage contribution of hydro electricity to the total energy mix. ii. To extend electrification to rural and remote areas, through the use of mini and micro hydropower schemes. iii. To conserve non-renewable resources used in the generation of electricity. iv. To diversify the energy resource base. The Energy policy further recognizes the fact that a substantial percentage of Nigeria"s urban poor and rural populace depend on fuelwood for cooking and other domestic uses. The rate of consumption of fuelwood far exceeds the replenishing rate to such an extent that desert encroachment is now a serious problem in the country. Also associated with this is soil erosion and loss of soil fertility. The largest sources of fuelwood at present are from natural forests, communal woodlots and private farmlands. Supply form natural forest regeneration is continuously being diminished due to the additional activities such as the clearing of forests for development projects agricultural activities such as the clearing of forests for development projects agricultural and industrial activities. Since forests are essential for a healthy environment and as a check on wind and water erosion and desertification, and also serve as energy sources, it is essential that they are cropped on a rational basis. Hence the policy states that: - i. The nation shall promote the use of alternative energy sources to fuelwood. ii. The use of wood as a fuel shall be de-emphasized in the nation"s energy mix. iii. The nation shall intensify efforts to increase the percentage of land mass covered by forests in the country. This is with a view to realizing the following objectives: - i. To conserve the forest resources of the nation. ii. To greatly reduce the percentage contribution of fuelwood consumption in the domestic, agricultural and industrial sectors of the economy. iii. To arrest the ecological problems of desert encroachment and deforestation. iv. To facilitate the use of alternative energy resources to fuelwood. 21 Under the Energy Policy, solar radiation is incident on earth at the rate of about 7.2 x 1015 MJ/day. Its intensity varies with location and at a given location, it varies with season, day of the month, time of day, instantaneous cloud cover and other environmental factors. However, the incorporation of efficient storage devices in solar energy conversion systems will take care of this intermittent nature of the availability of solar radiation. Nigeria lies within a high sunshine belt and within the country solar radiation is fairly well distributed. The annual average of total solar radiation varies from about 12.6 MJ/m2-day in the far North. Solar energy is renewable and its utilization is environmentally friendly. Consequently, when the availability and environmental cost of the utilization of other forms of energy are considered the competitiveness of solar energy in comparison with these other forms becomes very evident, particularly for low to medium power applications. Solar radiation conversion technologies are generally either of the solar- thermal type (Solar heating, cooling, drying, thermal power plant, etc.) Or of the photovoltaic type (direct conversion to electricity). Areas of application of solar thermal technologies are crop drying, house heating, heating of process water for industries, hospitals etc, air-conditioning, preservation of foods and drugs, power generation, etc, photo-voltaic (pv) power may be utilized in low to medium power applications and in remote areas, in such uses as communication stations, rural television and radio, water pumping, refrigeration etc, which require power of the order of 1-10 KW. It may also be used for power supply to remote villages not connected to the national grid. It is even possible to generate PV power for feeding into the national grid. Most solar thermal technologies can be supported by the technical expertise existing within the country. However the industrial infrastructure needs to be strengthened for effective utilization of energy resource. Photovoltaic system components require more sophisticated technologies for their manufacture, particularly as regards the photo-voltaic cells. Apart from traditional open air drying, solar energy technologies are not much used in Nigeria. Nevertheless they have tremendous potentials. Much work needs to be done in the development and popularization of applications equipment and systems, solar and environmental data acquisition and development of standards for materials, design and equipment manufacture. Accordingly, the policy provides that: - i. The nation shall aggressively pursue the incorporation of solar energy into the nation"s energy mix. ii. The nation shall keep abreast with world-wide developments in solar energy technology. This is with a view to realizing the following objectives: - i. To develop the nation"s capability in the utilization of solar energy. 22 ii. To use solar energy as a complementary energy resource in the rural and urban areas. iii. To develop solar energy conversion technologies locally. Under the Energy Policy, the biomass resources of Nigeria has been identified as wood, forage grasses and shrubs, animal wastes and wastes arising from forestry, agricultural, municipal and industrial activities, as well as aquatic biomass. The biomass energy resources of the nation have been estimated to be significant. Plant biomass can be converted to produce solid briquettes which can then be utilized as fuel for small-scale industries. Biogas digesters of various designs are capable of sustaining household, industrial and institutional energy needs. It has indeed been shown that the remaining biomass material after digestion is a better fertilizer than the original waste. The intensive application of this will reduce the existing heavy reliance on chemical fertilizers. The abundant energy available from biomass can be meaningfully introduced into the nation"s energy mix through the development of a comprehensive programme. The programme should encompass fully supported research, development, demonstration and manpower training components. Hence under the energy policy, the nation shall effectively harness non- fuelwood biomass energy resources and integrate them with other energy resources. This is with a view to realizing the following objectives: - i. To promote biomass as a supplementary energy resource especially in the rural areas. ii. To promote efficient use of agricultural residues, animal and human wastes energy sources. In view of the energy available in the wind, the Policy appreciates the need to embark on a wind energy development programme. The Policy states that: - i. The nation shall commercially develop its wind energy resources and integrate this with other energy resources into a balanced energy mix. ii. The nation shall take necessary measures to ensure that this form of energy is harnessed at reasonable cost in the rural areas. This is with a view to achieving the following objectives: - i. To develop wind energy technology in areas where it is technically feasible. ii. To use wind energy for provision of power to rural areas and remote communities far removed from the national grid. iii. To develop wind energy to supplement other energy resources. 2.5 Nigeria Policy Goals: Renewable and Efficient Energy/Rural Electrification 23 In Nigeria, there is no national policy dedicated specifically to energy efficiency and renewable energy or its applications to rural areas.23 There are, however, other policy instruments on the environment and energy that may be relevant to supporting such applications. The Nigerian National Policy on the Environment provides that the goal of the Policy on the Environment is to achieve sustainable development in Nigeria, and in particular to: Secure a quality of environment adequate for good health and well being; Conserve and use the environment and natural resources for the benefit of present and future generations; Strategies to achieve this objective include: Implementing a detailed Environmental Impact Assessment (EIA) on all planned energy projects backed by a detailed baseline ecological data against which subsequent environmental changes and/or impacts can be measured; Developing a rational National Energy Utilization Master-Plan that balances the need for conservation with the utilization of premium energy resources for premium socio-economic needs; Encouraging the use of energy forms that are environmentally safe and sustainable, particularly solar energy; Promoting and encouraging research for the development and use of various locally available energy sources especially non-conventional resources such as geothermal, solar, wind and other complex forms of hydrocarbons other than oil and coal. The Electric Power Implementation Committee with the advice of reputable power sector consultants put together a power policy, which was approved by the Federal Executive Council in March 2001. The policy24 envisages a three stage legal and regulatory reform of the power sector. The first transition stage is characterized by private power generation through independent Power Producers (IPPs), and Emergency Power Producers (EPPs). There will be a corporate restructuring, unbundling and privatization of NEPA through sale or license of all thermal plants to private operators or concessionaires and transfer of management, ownership and control of selected distribution companies. Secondly, the policy has a medium term which will create competition among generating companies; encourage energy trading between generation and distribution companies primarily on the basis of bilateral contracts through contact exchanges and sales. There will also be payment of full price by generators for natural gas and other fuels and sale of energy by companies generating power in excess of their needs to distribution companies Thirdly, there will be competition structure, which envisaged that during this phase, the various power generation, transmission and distribution companies would be operating optimally. Additionally, there would be 24 economic pricing of electricity to cover the full costs of supply, including expectation of a reasonable, risk-adjusted rate of return on capital. It will create opportunity for large industrial consumers to choose their suppliers and a well developed wholesale market with formal membership rules, procedures, and full retail sales competition. One of the most important objectives of the National Electric Power Policy adopted by the Electric Power Sector Reform Implementation Committee and approved by the National Council on Privatization is to ensure that Nigeria has an electricity supply industry that can meet the needs of its citizens in the 21st Century. On rural electrification, the primary policy objective is to expand access as rapidly as can be afforded in a cost-effective manner.25 The rural electrification policy includes a full menu of options – grid and off-grid, mini-grid, non thermal and renewables, while ensuring close co- ordination of rural electrification expansion with economic development objectives and encouraging states, local communities as well as the private sector to develop and contribute financially to rural electrification. It is imperative to state that the vision and mission of the Rural Electrification Agency (REA) which places so much emphasis on "private sector driven investment" "reasonable returns on investment" "appropriate tariff" and without a reference to the contribution of communities will defeat the obvious ends of rural electrification which in most instances can not be commercially and financially reward driven. The need for government subsidy or fiscal mechanism to guarantee access to electricity for rural dwellers, where the "return on investment" cannot motivate the private sector, needs to be emphasized in the conceptualizations of REA.26 Trust agents would be appointed to mange the Rural Electrification Fund while the Fund Management Team will develop policies and criteria for administering the Fund, ensuring equitable funds allocation to all six geo- political zones. It is acknowledged that REA has been in existence for just about a year now, so it may be considered too early in the day to undertake an assessment of its performance. But at the same time, it should be a matter of concern that about a year after this agency was set up, virtually nothing has been heard about it in respect of the activities it has carried out or plans to carry out in line with its vision, mission, functions, objectives etc. This is more so as one of its targets is increasing access to electricity in the rural areas by 10% in the year 2007. LEGISLATIVE AND REGULATORY FRAMEWORK FOR RURAL APPLICATIONS OF ENERGY EFFICIENCY AND RENEWABLE ENERGY What legislative measures can best advance rural applications of energy efficiency and renewable energy in developing countries?27 In most jurisdictions, a principal law of the power sector usually establishes an electricity regulatory board or other regulatory agencies with 25 powers to process and recommend applications for licenses, set, review and adjust transmission and distribution tariffs, enforce environmental and safety regulations, investigate complaints, ensure there is competition and approve power purchase contracts and transmission and distribution contracts. The provisions are usually broad and permissive, with the enactment of subsidiary legislation or regulations to deal with specific aspects of electricity regulation. Since the bulk of regulatory matters are usually addressed through subsidiary legislation or regulations in order to maintain a fair degree of flexibility in dealing with ever-changing and fluid power sector needs, an opportunity exist for regulating off-grid electrification in rural areas not easily accessible by the grid network. Additionally, other statutes may complement the electric power legislation in the regulation of the power sub-sector by paying specific attention to rural applications of efficiency and renewable energy. Regulations and energy policies have a direct impact on the success of energy markets generally, market participants and stakeholders, as well as products and services. However, the exact nature and scope of this impact will depend on the effectiveness of the implementing agencies or institutions. Regulatory institutions can either promote or defeat the goals of regulatory policy captured in legislation or regulations. Every regulatory institution needs at least to have: A clearly defined organizational structure; A hierarchical relationship within its structure; Sufficient qualified staffing and financing; Strategic policy goals; Internal and external reporting requirements; Licensing provisions; and Consultation, hearing and expeditious approval processes. Sec 5 The legislative and regulatory provisions for promotion and regulation of energy efficiency and renewable energy are addressed below for Nigeria, as typical of a developing country. The 1999 Constitution28 of Nigeria provides the legal basis for off-grid electrification in rural areas falling within each state of the federation in the form of renewable energy by empowering the House of Assembly of each state to establish electric power stations within their respective states, generate and transmit and distribute electricity to areas not covered by the national grid system within that state amongst others.29 The Nigerian Electricity Act30 of 1988 is stated to be "An Act to provide for the regulation and control of electricity installations, and of the generation, supply and use of electricity energy."31 Every undertaking in the development of the sub-sector must comply with this Act. Section 2 provides as follows: "This Act and the regulation made there under shall apply in respect of any undertaking for the manufacturing, distribution or 26 supply of electricity established by the Government of a State or any of its agencies to the same extent as the Act and regulations apply in respect of any such undertaking established by any other person or authority." The Electric Power Sector Reform Act (EPSRA) was enacted into law in March 2005 to consolidate and give legal backing to the reforms being undertaken in the sector. So far, the agencies expected to be set up under it to drive the reform process such as the Nigerian Electricity Regulatory Commission (NERC) and the Rural Electrification Agency (REA) have been functioning since May 2005 and March 2006, respectively. Also in line with the Act, the National Electric Power Authority (NEPA) ceased to exist and in its place emerged the Power Holding Company of Nigeria (PHCN). NERC has stated its rulemaking and regulatory functions. PHCN has in itself been restructured and unbundled into 6 generation companies, 11 distribution companies, and 1 transmission company, which are to be privatized. Negotiations for the management contract for the transmission company are at an advanced stage while the public notice for expression of interest to buy and manage the distribution companies has been published. Nigeria Electricity Management Company (NEMA) has been incorporated to manage the legacy liabilities of PHCN. The 2005 Act was aimed at deregulating the power sector, developing the capacity to transmit and distribute the envisaged higher level of generation. This involved a complete unbundling of the National Electric Power Authority into 18 other independent bodies. The federal government had hoped to generate 10,000 megawatts by December 2007, a figure that many people though was too low for a population of 140 million. But even this low figure has not been achieved. South Africa with a population of 47 million generates 36,000mw, Brazil with a population of 188 million generates 90,000mw while South Korea with a population of 49 million generates 43,833mw. It is estimated that Nigeria with a population of 140 million would need to generate 67,012mw to be at par with Brazil, the lowest of per capita among the three countries. It is further estimated that to have stable electricity, a country needs about 20 percent excess capacity. Considering our current constraints that seems a tall order.32 The reason why we are still far from the target might be that we did not fully appreciate the enormity of the problem or we did not anticipate that generator merchants might, as suggested by some people, have decided to sabotage the efforts of the government or the government itself did not appreciate that it takes about three or four years to build a power station and four or five years to build a transmission line, or the past governments did not understand the dynamics of electricity in development or they simply didn"t care. 27 President Musa Yar"Adua has now established an 11-member Presidential Committee for the Accelerated Expansion of Nigeria"s Power Infrastructure. He tasked the Committee to deliver within 18 months the 6,000 additional megawatts targeted under the National Integrated Power Project, NIPP, as well as add an extra 11,000 megawatts of power generation capacity by 2011 through diverse sources.33 With the coming into force of the EPSRA, and the subsequent inauguration of the agencies established by it such as NERC, one noticeable development in the sector has been the licensing of new IPPs. Between August 2006 and June 2007, twenty licenses were issued to IPPs in different parts of the country. Altogether, they are expected to add about 8,000 MW of electricity to the national grid when they go into full operation.34 Table 5: - IPPs, Licensee, Site Location, Capacity, Status and Fuel Type35 SN NAME OF SITE TYPE OF CAPACITY STATUS FUEL LICENSEE LOCATION LICENSE TYPE 1. Farm Electric Otta, Ogun Generation 150MW Project Gas Supply Ltd State on-Grid Planning 2. Ethiope Energy Ogorode, Generation 2,800MW Project Gas Limited Sapele Delta on-Grid Planning State 3. ICS Power Ltd Alaoji, Abia Generation 624MW Project Gas State on-Grid Planning 4. Suppertek Nig. Akwete, Generation 1,000MW Project Gas Ltd Abia State on-Grid Planning 5. Ikorodu Industrial Ikorodu Distribution Completed Gas Power Ltd Lagos State 6. Mabon Ltd Dadinkowa, Generation 39MW Under Hydro Gombe State Construction 7. Geometric Power Aba, Abia Generation 1,000MW Project Gas Ltd State on-Grid Planning 8. Aba Power Ltd Aba, Abia Distribution State 9. Westcom Sagamu, Generation 1,000MW Project Gas Technologies & Ogun State on-Grid Planning Energy Services Ltd 10. Anita Energy Agbara, Generation 90MW Project Gas Limited Lagos State on-Grid Planning 11. Lotus & Bresson Magboro, Generation 60MW Project Gas Power Company Ogun State on-Grid Planning Limited 12. First Independent Omoku Generation 150MW Gas Power Co. Ltd Rivers State on-Grid 13. First Independent Trans- Generation 136MW Gas Power Co. Ltd Amadi on-Grid Rivers State 14. First Independent Eleme Generation 95MW Gas 28 Power Co. Ltd Rivers State on-Grid 15. Ibato Power Ibato, Ogun Generation 200MW Project Gas Station State on-Grid Planning 16. Hudson Power Warawa, Generation 150MW Project Gas Limited Ogun State on-Grid Planning 17. Shell Petroleum Afam VI, Generation 642MW In Operation Gas Dev. Co. Ltd Rivers State on-Grid 18. Ewekoro Power Ewekoro, Generation 13MW Gas Ltd Ogun State off-Grid 19. Ikorodu Industrial Ikorodu, Embedded 39MW Gas Power Ltd Lagos State Generation 20. Westcom Buena Vista Generation 50MW Gas Technologies & Estate, off-Grid Energy Services Lekki, Lagos Ltd. State The total expected on-grid capacity is 8,136MW with 4,342 expected in the first phase while the second and third phases will produce 3,478MW and 316MW respectively. The status of the different IPPs gives an idea of what contribution they are making to the availability of electric power in the country at present. Many of them are still at the project planning stage. Some have moved on to the stage of plant construction, one has been completed (but ostensibly not yet in operation) while only one is in operation. So invariably, the licensed IPPs have made little or no contribution at all to the improvement of the electricity supply situation in the country so far.36 An independent source gives the following rating of functional IPPs: Table 6: - Current Generation of Functional IPPs Plant Rating MW June 2007 MW Ajaokuta 80 36 AES (Lagos) 270 216 AGIP Okpal 450 239 Rivers 30 53 Total 830 544 Source: Arif Mohluddin, Principal, CPCS Transcom, 2 nd Power Nigeria Conference, 2007, Embracing privatization of the Power Sector-Chances for Success at p.8 At a glance, it can be seen that even the IPPs in operation generate below their installed capacity. How then are the PHCN successor companies and the NIPP faring? In the case of the PHCN successor companies, it is obvious by the poor state of electricity that there has been no improvement in their performance as they are still producing below installed capacity. If in the past, the poor performance of PHCN"s predecessor NEPA, could be attributed to poor funding, this excuse can no loner be tenable because of the massive injection of funds into it in the past eight years. By PHCN"s admission, N264 billion had been released to it in the past eight years, though if all money appropriated to it during the period were to 29 be released to it, its total receipts would have been N395 billion. This amount does not represent the overall government input into the sector during the period as several billions were spent separately on the NIPP and the Niger Delta Power Projects. Other funds that have gone into the sector during the period have come from private investors, state governments, debt relief gain and multilateral agencies, etc. As the box below shows, in 2006, the sum of N100 billion released from external debt services, known as Debt Relief Gains (DRGs) was allocated to fund projects in ministries, departments and agencies whose mandates are crucial to the attainment of the MDGs.37 Power and Steel came fourth, behind Health, Water and Education as the MDAs that received the highest allocation. This in itself further underscores the importance attached to the sector. Box 1: Sectoral Distribution of Debt Relief Gains Sectors % Amount Due Health 21.3 21,300,000,000.00 Education 17.8 17,800,000,000.00 Water 19.2 19,200,000,000.00 Works 9.9 9,900,000,000.00 Power and Steel 17.0 17,000,000,000.00 Agriculture 8.7 8,700,000,000.00 Environment 1.5 1,500,000,000.00 Women Affairs 1.0 1,000,000,000.00 Intergovernmental/Youth 1.0 1,000,000,000.00 Housing and Urban Development 0.5 500,000,000.00 OPEN38 1.0 1,000,000,000.00 Specifically, N16,961,839,096 of the DRGs was to be spent by the Federal Government on Rural electrification project. The projects, for good measure were classified into three groups. These are 443 ongoing rural electrification projects which were given the highest vote of N12,145,841,803; 119 ongoing projects at stringing level to which the sum of N3,217,047,369 was allocated and 113 ongoing substation building projects which received an allocation of N1,448,966,924.39 30 However, the issue of crucial concern is the use to which the N264 billion received by PHCN has been put. This money was meant to be used by PHCN to improve the performance level of its plants, now grouped into 18 successor companies. But instead of improvement, there has only been deterioration in the services these companies are offering. An independent source rates their current performance as follows: Box 2:- Current Performance of Successor Generating Plants Plant Rating MW June 2007 MW Kainji, Jebba 1,280 360 Shiroro 600 378 Egbin 1,320 545 Sapele 175 65 Afam 115 260 Ughelli/Delta 900 272 4,390 1,880 Source: Arif Mohluddin, Principal CPCS Transcom, 2 nd Power Nigeria Conference, 2007, Embracing Privatization of the Power Sector-Chances for Success, p.8. It is the belief of many stakeholders both within and outside the sector that much still needs to be done to make the 18 companies and by extension, the entire electric power industry in the country performance drive. For instance, there seems to be a misconception that electric power supply begins and ends with generation. Most of the discussions and planning about improvement of the supply situation always revolve around the megawatts of electricity that can or should be generated. But the transmission and distribution systems are not only crucial legs of the electricity tripod, but are also in terrible shape in the country.40 With respect to hydroelectric power, the Water Resources Act governs water resources development in Nigeria.41 This Act establishes the legal framework for the development of water resources. It places ultimate responsibility for the proper development of the nation"s water resources on the Ministry of Water Resources and Rural Development. The Act vests rights to the use and control of water resources in the state.42 This does not preclude the rights of individuals to take and use water for domestic43 or industrial purposes including the generation of hydropower.44 Nevertheless, a license is required for any person to operate any hydraulic work on the waterways or underground. 45 The mode of application is spelled out under Section 10 of the Act that requires an application for the grant of a license to carry out hydraulic works to be made to the Secretary in such form and manner and containing or be accompanied by such information and document as the Secretary may from time to time prescribe.46 Bio-fuels in the forms of wood, charcoal, and biomass constitute at least 70% of the energy consumed all over Nigeria. The demand for wood fuels, for example, is expected to rise by about 350% by 2030 and beyond, while urban 31 consumption is expected to grow by 250% within the same period.47 The requirement for an environmental impact assessment in respect of any project embarked upon by any private or public authority with likely environmental impact under the Environmental Impact Assessment Act No. 86 1992 all combine to reduce the trend towards massive deforestation in Nigeria.48 Other renewable energy resources that could in principle meet almost all Nigeria"s needs, such as solar power, wind power, geothermal energy and wave power are not given any specific regulatory prominence. Nevertheless, the Energy Commission of Nigeria Act established the Energy Commission of Nigeria and charged it with responsibility for coordinating and general surveillance over systematic development of the various energy resources of Nigeria including new and renewable energy sources.49 The Jigawa Alternative Energy Trust fund, with the United States Department of Energy is constructing a solar electric project in Jigawa State. The project is a result of a $600,000 solar rural electrification and water-pumping project for 3 villages in Jigawa State.50 In Nigeria, the regulatory institution specific to efficiency and renewable energy is the Energy Commission of Nigeria (ECN), which was established by the ECN Act No. 109, Laws of the Federation of Nigeria (LFN) 2004, as the agency responsible for the co-ordination and general surveillance over the systematic development of energy resources of Nigeria.51 S. 1(2) of the ECN Act provides for the composition of the Commission. The Departments of the Commission include that of Energy Planning and Analysis (including energy efficiency demand management and conservation, rural energy, and alternative and new and renewable energy sources).52 The ECN is charged with responsibility for the strategic planning and co-ordination of national policies in the field of energy in all its ramifications and, includes amongst others: preparation, after consultation with such agencies of government whose functions relate to the field of energy development or supply as the Commission considers appropriate, periodic master plans for the balanced and coordinated development of energy, including recommendations for the exploitation of new sources of energy as and when considered necessary. It is also charged with laying down guidelines on the utilization of energy types for specific purposes and in a prescribed sequence. The Energy Commission of Nigeria has produced a National Energy Master Plan for Nigeria. The Master Plan of 2003 which is expected to ensure a guided implementation of National Energy Policy focuses on all energy sources, energy utilization, manpower development, energy financing, energy, data bank, energy planning, implementation, monitoring and evolution and other cross- cutting issues. It was then described as a blue print for sustainable development, supply and utilization of the various sources of energy available within the country and for the use of these resources in international trade and cooperation. 32 The NEM is therefore an implementation plan and a roadmap for the realization of the energy policy objectives given the strategies enunciated in the NEP. For every sector in the economy, the NEM details the programs or activities required for each strategy together with their associated executed, collaboration and funding agencies and their timelines which are the short term (2006-2009), medium term (2010-2015) and Long term (2016-2030). Monitoring and evaluating strategies for the implementation plans have also been developed. The National Environmental Standards and Regulations Enforcement Agency (Establishment) Act, 2007 Act No. 25, provides under section 2 that the agency, shall, subject to the provisions of this Act, have responsibility for the protection and development of the environment, biodiversity conservation and sustainable development of Nigeria"s natural resources in general and environmental technology including coordination and liaison with relevant stakeholders within and outside Nigeria on matters of enforcement of environmental standards, regulations, rules, laws, policies and guidelines. Under section 3(1) of the NESREA Act 2007 the Agency shall: a) Enforce compliance with the provisions of international agreements, protocols, conventions and treaties on the environment, including climate change, biodiversity, conservation, desertification, forestry, oil and gas, chemicals, hazardous wastes, ozone depletion, marine and wild life, pollution, sanitation and such other environmental agreements as may from time to time come into force; Under section 20(1) the Agency may make regulations setting specifications and standards to protect and enhance the quality of Nigeria"s air resources, so as to promote the pubic health or welfare and the natural developing and productive capacity of the nations" human, animal, marine or plant life including, in particular: a) the most appropriate means to prevent and combat various atmospheric pollution; b) control of atmospheric pollution originating from energy sources, including that produced by aircraft and other self-propelled vehicles, industries, factories and power generating situations or facilities; c) standards applicable to emission from any new mobile or stationary source which in the Agency"s judgement causes or contributes to air pollution which may reasonable be anticipated to endanger public health or welfare; and d) the use of appropriate means to reduce emission to permissible levels. Although, existing legislations in Nigeria are skewed towards fossil fuels and secondarily hydro-power, there is recognition that an appropriate legal framework is a prerequisite for maximizing investment opportunities in the renewable energy sector. A Nigerian National Energy Policy similar to that of the 33 White Paper on the Energy Policy of the Republic of South Africa in December 1998 will better articulate the framework for rural applications of efficiency and renewable energy.53 PART THREE: - CHALLENGES AND STRATEGIES TO OVERCOME THE BARRIERS TO CLIMATE CHANGE MITIGATION/USE AND REGULATION OF RENEWABLE AND EFFICIENT ENERGY FOR ELECTRICITY IN NIGERIA 3.1 Challenges and Barriers to Climate Change Mitigation in Nigeria Substantial data gaps exist in the database for both the emissions inventories and mitigation analyses considered above.54 For instance, in the downstream energy sector, data is obtained from the Nigerian National Petroleum Corporation (NNPC) Annual Reports and National Bureau of Statistics (NBS) Annual Abstracts of Statistics, while other reports provide annual data on petroleum products consumption by the whole country, and for each state of the federation. These reports are lacking on sectoral energy consumption, which are necessary inputs to emissions inventories. The basic downstream petroleum products consumption data currently lacking include: gasoline consumption by road transport and other transport sectors, especially navigation; diesel consumption by road transport and other transport sectors, especially navigation; coal consumption by rail transport, households and industries; diesel and fuel oil consumption by industrial boilers; diesel and gasoline consumption for power generation in industries; diesel and gasoline consumption by private electric generators; diesel consumption by off-road transport sectors, forestry and agriculture; consumption of international bunker fuels. Similar gaps in the database were observed in all other emissions-relevant sectors such as the upstream energy sector, industries, agriculture, land-use change and wastes management. The back-up statistics, which could have made the estimation of petroleum products consumption in the downstream sectors possible, are also currently weak. For instance, there are no statistics on the total vehicles in Nigeria from year to year. The data published annually is the annual new vehicle registrations. This has been used to build up the vehicle population statistics using vehicle survival statistics from the gasoline consumption by road transport and other transport sectors, especially navigation; diesel consumption by road transport and other transport sectors, especially navigation; energy consumption by public and business sector enterprises, including hotels, schools and other institutions; the partition in the consumption of aviation kerosene between local and international aviation; and United States, which may be 34 remarkably different from that of Nigeria. The aircraft fleet and their fuel consumption capacities and annual flying houses could have been used to evaluate fuel consumption from domestic and international aviation. However, such data are not yet accessible. Also, the industrial consumption of petroleum products could have been inferred if energy consumption per unit production in various industrial sectors was available. This means that substantial effort must be made in the next few years to build up these support statistics for more accurate estimates of downstream energy sector fuel consumption. Apart from a few local emissions factors measurement undertaken for gas-flares, gas-fired power plants and oil-field facilities such as turbines, pumps and heaters, the majority of emissions factors used in the national inventory are obtained from existing literature. The largest source is the Intergovernmental Panel on Climate Change (IPCC) default emissions factors (1995), EPA AP-42 and OECD/IEA/IPCC (1991, 1994). Other sources were from journal articles, which were adequately referenced in the reports. The question, which arises from this, is how representative are these emissions factors of the local emissions relevant technologies which they represent? This forms the basis of the level of uncertainty currently associated with the emissions estimates. The quantification of such uncertainties is yet to be undertaken. There were also mitigation assessment data gaps identified in the forestry section, as follows: The mitigation analysis for both the energy and forestry sectors was carried out for only CO emissions. Non-CO GHG emissions were not considered. For other sectors such as agriculture, land-use and wastes management, both CO and non-CO emissions mitigation analyses were not carried out. The current data on CO and non-CO emissions coefficients for Nigeria are grossly inadequate. Default values from IPCC data sources are still being used. A number of barriers to implementing and/or improving future national mitigation analysis identified in both the energy and forestry sectors include: low literacy level; lack of/low level of awareness of the mitigation technologies and their potential benefits; inefficient energy use; inappropriate energy pricing; financial constraints; low income-level; technological incapability; and pressures from population growth. Although national GHG inventories have been undertaken to cover all the broad sectors for the year 1988, 1990 and 1994 as well as for limited sectors such as industries (1996 to 1998), savannah and land-use change (1994, 1995), the data 35 obtained were lacking in many respects and could be improved. Additionally, the tempo of activities have not been sustainable, which explains why Nigeria has not been able to update national GHG inventories beyond 1994, even as the earlier data contain substantial gaps in time and by activities/sectors. A number of barriers were identified as militating against sustainable assessment of GHG emissions in Nigeria: lack of adequate spread of human resources; lack of coordination for data collection and data archival storage, and restricted access to raw data files of relevant agencies collecting emissions- relevant data; lack of a network of institutions established with the mandate to undertake national GHG inventories and the dissemination of material from such a database; lack of back-up data sources that are needed to improve downstream energy consumption data, land-use change data, agricultural and industrial databases, etc.; most of the studies carried out for other purposes that could have provided backup data are already obsolete; lack of local financial resource commitments and budget for inventories and mitigation assessment by the Federal Ministry of Environment despite the value of GHG inventories and mitigation options assessment data to the national economy; and the non-availability of electronic data archival storage and retrieval systems for activity data, emissions factors and previous emissions estimates. 3.2 Challenges and Barriers to Renewable and Alternative Electricity Sources in Nigeria 3.2.1 Renewable Electricity In accordance with the provision of EPSRA Act 2005, it is expected that targets on access to electricity will be met through grid based extension, independent mini-grids for remote areas with concentrated loads where grid service is not economical or will take many years to come and stand alone renewable electricity systems for remote areas with scattered small loads. The interest here is on renewable energy which is defined to include energy from solar, wind, biomass cogeneration and gasification, less intrusive hydro, geothermal and hydrogen energy.55 The Federal Ministry of Power and Steel has developed guidelines for renewable electricity.56 The objectives of the Guidelines include the diversification of sources of electricity, improvement of energy security, increasing access to electricity nationwide particularly in the rural areas, stimulation of employment generation through expanded renewable energy sources, enhancing technological acquisition through domestic manufacture of 36 renewable energy components. Other objectives include the reduction of household and outdoor air pollution as well as to contribute to the abatement of green house gas emissions, and thus contribute to improved health and overall social development. The current total contribution of renewable energy to the energy mix is about 35MW composed of 30MW small hydropower and 5MW solar PV.57 A number of barriers were identified as militating against the development of the renewable electricity industry and they include: Policy and regulatory issues, including guarantees of access to the grid for renewable energy; Financial and investment barriers since renewable energy have high initial costs and Nigeria lacks manufacturing capacity for components of renewable energy. Average electricity tariff in Nigeria is about 6.75 per KW-h – about 5cents. The average cost of sources of renewable electricity for mini hydro is 5-10 cents, solar PV is 20-40 cents, biomass power 5-12 cents, wind power 6-10 cents. Thus, financial incentives for Market entry are currently lacking. Incidentally, these relatively higher cost initiatives may be needed to satisfy the electricity needs of the poor who cannot afford high tariffs and are not in governments to influence favourable policies for renewable sources of energy; Technological barriers of full import dependent renewable facilities; Low public awareness and poor standards and quality control from the regulatory agencies (such as SON); Inadequate resources assessment; and, Intermittency of resource availability. While not dismissing the idea of the relatively high cost of renewable energy, it is important to appreciate the concept of cost in its totality. It has been postulated that while commodity cost depend on the volume of supply, the economic of conservation and end use efficiency is built on reduced supply, focusing instead on quality of service. Similarly, micro-turbines and appropriately scaled power plant (under 50MW) may have higher unit cost, but their advantage is in being more easily sited near loads than large power plants – thereby saving transmission and distribution losses, and their much lower capital and environmental risks, can offset higher generation costs.58 3.2.2 Alternative Sources of Electricity –Nuclear Energy Even if the country were to be able to generate sufficient electricity for its population from the thermal, hydro and gas sources, there would still be the need to explore other available options. This is the practice world wide. Countries are trying out electric power sources that may not only be cheaper but are also sustainable and environmentally friendly. Coal, solar energy and nuclear 37 energy are for the above three reasons currently being promoted as alternative sources of electricity. The focus of this discussion will be on nuclear energy. a) Nuclear Energy There have been expressions of interest at the highest levels of government in the country for the deployment of nuclear technology for electric power generation. Former President Olusegun Obasanjo while inaugurating the Board of the Nigeria Atomic Energy Commission (NAEC) in July 2006 had stressed that the country"s aspiration to acquire nuclear power was to deploy it to peaceful purposes, particularly, electricity generation. Thus he declared: "The global picture on the utilization of nuclear energy for the generation of electricity is becoming brighter by the day, and holds some good promise for the developing world, particularly for us in Nigeria."59 The brighter global picture he was referring to was the new policy initiative of the United States Government on nuclear energy called the Global Nuclear Energy Partnership, which seeks to popularize and expand the generation and use of nuclear electricity in the world while at the same time making the world more nuclear weapons proliferation resistant. It was Obasanjo"s hope that nuclear technology would enable the country to diversify the electricity generation base beyond oil and gas. About a year later, his successor, President Umaru Yar"adua was to reiterate this aspiration. Speaking after a briefing on the National Program for the Deployment of Nuclear Power for Generation of Electricity by Dr. Franklin Erepamo Osaisai, Director General of National Atomic Energy Commission (NAEC), he said the country needed to embrace nuclear power to meet its growing energy needs.60 Nuclear plants are said to have the advantage of not putting carbon dioxide in the atmosphere and the cost of its energy is also said to be relatively cheaper, especially in the long run. Nigeria"s nuclear roadmap, according to Osaisai, is in the shape of a three- phase framework developed by NAEC and approved by the government which hopes to generate at least 1,000 megawatts of electricity through nuclear power by 2017 and to increase this to 4,000 by 2027.61 But there are reservations in some quarters about the country"s quest for nuclear power, even if for electricity generation purposes. For one, the country"s energy infrastructure, including its power grid are considered primitive by international standards. Unless upgraded, they cannot be compatible with a nuclear energy source. Secondly, the cost of building a nuclear power plant is enormous as conceded by even Osaisai. While declaring that running a nuclear power plant was more cost effective than other technologies, Osaisai admitted that initial funding is usually capital intensive. Jon Wolfsthat, a non proliferation fellow at 38 the Centre for Strategic and International Studies in Washington expects the country to spend between $1 and $2 billion for a single light water reactor.62 Procurement of the raw material needed could also be a problem. Though the country has some deposits of uranium, they remain largely untapped and of indeterminate quantity. Worldwide, it is estimated that there are enough uranium reserves to last for at least one hundred years. Finally, considering the risks and environmental disasters associated with improper handling and management of nuclear power like the Chernobyl disaster and the Three Mile Island disaster in Russia, it is obvious that Nigeria"s preparedness in terms of technology and manpower to run nuclear power plants needs to be doubled. The world is yet to develop a fool-proof technology for safely handling and storing spent uranium fuel as it remains radioactive and continues to pose health and environmental danger63 for thousands of years. PART FOUR: - CONCLUSION It is evident from the above that the use of renewable energy can lead to the development of rural industries with attendant job opportunities and thus contribute to poverty alleviation. The proper management of renewable energy resources in the rural areas can play an important role in environmental protection.64 As Nigeria"s economy improves, its per capita greenhouse emissions may approach those of the developed nations of the world today. This, combined with continued gas flaring and a large population will further worsen Nigeria"s standing as a key emitter of greenhouse gases globally, with all the attendant consequences on all sectors of the economy, particularly, the energy and industrial sectors a well as the rural populace and urban poor. Although the reforms in the electricity industry has started on the right note, by the enactment of a new sector law in 2005, the establishment of the regulatory agency, rule making and fair management of the sector by the agency, the crises in the energy sector today justifies the need for the sector to be disciplined by accountability and transparency mechanisms in the management of energy resources and budgetary allocations for effective separation, transmission and distribution of electricity nationwide. The legislative and regulatory framework for rural applications of efficiency and renewable energy is a combination of policy instruments seeking to set clear goals, legislative requirements and subsidiary instruments that provide legal bases for policy perspectives as well as institutional mechanisms for policy implementation. Renewable energy has a large and geographically widely spread resource base. However, the following have been observed as obstacles in its application: The lack of or inadequate awareness on alternative energy options; The lack of reliable data to undertake specific projects; 39 Poor or no research and development base or even commercial business models contribute to the difficulty of accessing the latest renewable energy technology, Limited financial resources; Insufficient number of personnel qualified to administer energy efficiency and renewable energy programs; The lack of supporting policies, up-to-date and comprehensive regulations, inefficient infrastructure and equipment for their use; and Other constraints such as competition from other energy resources, mainly fossil fuels. An adequate regulatory framework must, therefore, specifically address these issues in order to put renewable energy squarely on the national agenda. Additionally, a law on renewable energy must contain provisions on qualifications, application, grant, as well as conditions of licenses and incentives to harness any form of renewable energy including procedures for facilitating renewable energy technologies through effective implementing institutions. Such a law must provide for the rights and obligations of both host country, or rural community and private investors and impose standards. An example of the regulatory needs to promote renewable energy may be found in the treatment of small hydro projects. Hydropower for rural electrification can help minimize local, regional and global environmental impacts in the long run, while ensuring people"s livelihoods. These benefits, not just of hydropower, but for all renewable energy resources, can hardly be realized without a coherent and adequate legislative and regulatory framework that sets out the policy, laws as well as institutional mechanisms for concretizing the gains that will flow from rural applications of renewable energy. Furthermore, the sustainability of a national GHG emissions inventory and climate change mitigation measures require the following, among others: - the determination of future emissions and to establish the extent of mitigation measures needed to lower emissions without compromising sustainable development; provision of local financial resource commitments and budget for GHG inventories and mitigation options assessment by the Government to support the activities of institutions working in this field; the identification of relevant projects and activities needed in the short-to- medium term to improve current national data on emissions inventories and mitigation analysis in Nigeria; use as many adaptation strategies as possible to mitigate the adverse effects of climate change on, particularly, the energy, industrial and agricultural sectors of the Nigerian economy as well as on the rural populace and urban poor; 40 not one, but a creative range or mix of policy instruments to deal effectively with the issues involved in adapting to climate change in Nigeria. 41 ENDNOTES AND REFERENCES 1. See A. S Sambo et al: Nigeria"s Experience on the Application of IAEA"s Energy Models (MAED & WASP) for National Energy Planning (2006). A paper presented during the Training Meeting/Workshop on Exchange of Experience in Using IAEA"s Energy Models and Assessment of Further Training Needs, held at the Korea Atomic Energy Research Institute, Daejon, Republic of Korea, at p. 9. 2. According to President Umaru Musa Yar"adua: Over 30 million out of 140 million Nigerians from various states of the federation are threatened by climate change which leads to increased degradation of the ecosystem, desert encroachment and deepens poverty of the populace. Quoted from Leadership Newspaper, Abuja, Wednesday March 26, 2008, p. 28. 3. Epileptic electric power supply is crippling Nigerian small, medium and large scale enterprises/industrial sector of the economy: Northern Nigerian State Legislative Speakers warned. Quoted in Business Day Newspaper, Abuja Wednesday, February 20, 2008, p. 1. 4. See National Energy policy of Nigeria, (2003), in Policies of the Federal Republic of Nigeria, (1999-2007) section 8, at pp.271-2. 5. See National Bureau of Statistics, Abuja (2006): - National Core Welfare Indicator Questionnaire (CWIQ) Survey, Summary Sheet, at p.2. 6. See "The Energy Crisis in Nigeria", in the NewsWatch Magazine, Lagos, Nigeria, March 3, 2008, pp.1-29. 7. See Umar, I.H., Keynote address delivered at a one-day workshop on Nigerian Urban Poor: - energy needs and sustainable livelihoods, Lagos, 23rd June 2004, pp.1-13. 8. Ibid at pp.3-7. 9. Ibid, at p.10, table 5. 10. See Sambo A.S., et. al, (2006): - Nigeria"s Experience on the application of IAEA"s energy models for national Energy Planning. A paper presented at a Training/Workshop on exchange of experience in using IAEA"s energy models and assessment. Held at the Korea Atomic Energy Research Institute, Daejon, Republic of Korea, 24-28 April 2006, pp.1-32. 11. Ibid at p.7, table 1. 12. See generally, The Nigeria Environmental Study/Action Team (NEST), Ibadan, Nigeria, and Global Change Strategies International (GCSI), Canada, Project on Nigeria: - Climate Change, March 2004, Executive Summary, pp.1-17. 13. See generally, UNEP, Nairobi, Kenya, (2007): - UNEP Handbook for Drafting Laws on Energy Efficiency and Renewable Energy Resources, at pp.1-10. 14. See Worika, I.L., Comparative Law Evaluations of Sustainable energy: - The African Perspective. A paper delivered at a Colloquium in Shangai on The Law of Energy for sustainable development, November 2003. 15. For case studies around the world on micro-financing of rural energy enterprise employing energy resources and technologies, see www.energy.house.com/casestudy_world.htm. 16. Worika, Supra note 14. 17. See generally, NEST, Supra note 12: - Review of GHG Emissions Inventories Mitigation Assessments and the Framework for the implementation of a national emissions data system in Nigeria (Synthesis Report), 2001-2004, pp.1-10. 18. See Energy Commission of Nigeria: - Brochure on Major Achievements, (2007) pp.1-7. 19. See UNEP Handbook, supra note 13 at pp..25-105. 20. See section 7, Policies of the Federal Republic of Nigeria (1999-2007), pp.207-253. 21. Ibid at pp.221-2. 22. See policies of the Federal Republic of Nigeria, supra note 4, at pp.257-351. 23. On rural Electrification Policy, see chapter 7 of the National Electric Power Policy 2001, supra note 20, at pp.240-241. 24. Ibid at pp.216-218. 42 25. Ibid at pp.240-241 26. See The Guardian Newspaper, Friday, April 27, 2007, p.7, Lagos, Nigeria. 27. See UNEP Handbook (2007) supra note 13, at pp.106-237. 28. Cap. C.23 Vol.3, Laws of the Federation of Nigeria, 2004. 29. Ibid, Section 14 to Part II of the Second Schedule to the Constitution. 30. Cap.E7 Vol.5, Laws of the Federation of Nigeria, 2004. 31. Ibid, See the preamble to the Act. 32. See Newswatch Magazine, supra note 6, at pp.1-15. 33. Ibid at p.13. 34. See Eze, O., and Jimmy E.,: - Electric Power Sector Reforms: - Challenges for NEEDS II (2007): - Social and Economic Rights Initiative, Lagos, Nigeria, at pp.13-14. 35. Ibid at pp.14-15, table 2. 36. Ibid at p.16. 37. See Understanding Budget 2006, Federal Ministry of Finance, Abuja, p.9. 38. OPEN stands for Oversight of Public Expenditure under NEEDS Policy document in Nigeria. 39. See Federal Ministry of Finance, supra note 37. 40. Osakue, G.O., Operating an effective economic transmission system: - The post deregulation challenges, Power Nigeria Conference 2007, held between 3-5 September, at Abuja, p.7. 41. Water Resources Act Cap. W2, Vol.15, Laws of the Federation of Nigeria, 2004. 42. Section 1(1) provide of the Water Resources Act provides: "The right to the use and control of all surface and groundwater and of all water in any water course affecting more than one state as described in the schedule to this Decree together with the bed and banks thereof, are by virtue of the Decree and without further assurance vested in the Government of the federation." 43. See S.2 of the Water Resources Act. 44. Section 3 of the Act states as follows: "Any person or any public authority may acquire a right to use or take water from any water-course or any ground water described in the schedule to this Decree for any purpose in accordance with the provisions of the Decree and any regulation made pursuant thereto." 45. Section 9(1) ibid. 46. The Secretary referred to here is the Secretary charged with the responsibility for matters relating to water resources. The Federal Government with the Japanese government"s technical assistance through the Japanese International Co-operation Agency (JICA) prepared a National Water Resources master Plan. URL: http://www.fao.org/ag/agl/aglw/aquastat/countries/Nigeria/index.stm. 47. See Adesanya Olugbenga M. "Elysian Energy for a Sustainable Nigeria" URL:http://www.worldenergy.org/wec- geis/publications/default/tech_papers/17th_congress/2_3_03.asp. Regulations to stem the tide of dwindling forest resources in size and volume can be traced to the basic norm, 1999 Constitution of Nigeria, which provide in Section 20 that: "it is an obligation of the state to protect and improve the environment and safeguard the water, air and land, forest and wild life of Nigeria." Under Article 24 of the African Charter on Human and Peoples" Rights (Ratification and Enforcement) Act, Cap. 10 L.F.N. 1990, "All people shall have the right to a general satisfactory environment favourable to their development." http"//www.nigeria- law.org/African%20Charter%20on%20Human%20and%20Peoples"%20Rights.html. 48. For Nigeria"s EIA Act No.86 of 1992, see http://www.elaw.org/resources/text.asp?id=2690. 49. See S. 1(2) of Cap. 109 L.F.N. 1990. See generally http://www.nigeria-law.org/LFN- 1990.html. But see author for actual law. 43 50. See Jigawa State, NIGERIA, "Extending Opportunities to the Edge of the Desert" http://www.self.org/nigeria.asp. 51. http://www.nigeria-law.org/LFN-1990.html. 52. S. 1(2)(b). 53. See "South Africa Energy Policy Discussion Document" http://www.pollicy.org.za/html/govdocs/green_papers/energy1.html?rebookmark=1. See also http://easd.org.za/sapol/energywp98-01.html. 54. See NEST, supra note 17. 55. Defined by the Nigerian Energy master Plan as small (below 30mw), mini (below IMW), micro (below 100kw) and peco (below 1kw). 56. In collaboration with the International Centre for Energy, Environment and Development, Abuja. 57. See Federal Ministry of Power and Steel: - Renewable Electricity Policy Guideline, December 2006. 58. See John B., and Mun Y.M.: - Rethinking Reforms in the Electricity Sector: - Power Liberalization or Energy Transformation (2006), Centre for Energy and Environmental Policy, Abuja. 59. See Vanguard Newspaper, Lagos, Nigeria, August 1, 2006, p.1. 60. See Earth Times, Analysis: - Nigeria"s Nuclear Ambitions, July 26, 2007, p.1. 61. Ibid at p.2. 62. Ibid, p.1. 63. See Ladan M.T., Materials and Cases on Environmental Law (2004): - Econet Publishers, Zaria, Nigeria, at pp.2-5. 64. See Ladan M.T., Biodiversity, Human Rights and Access to Environmental Justice in Nigeria (2007): - Faith Publishers Ltd, Zaria, at pp.15-20. 44