Finance
Financing
Nigeria seeks to reset the discussions around international support to transition and build a “new deal on climate finance” that focuses on clear, data-driven, action-backed, ambitious yet feasible emission-reduction commitments from developing countries supported by clear finance commitments from development partners.
This figure covers counter acting dynamics:
Most of the effort will be needed in the power sector: extra CAPEX is needed to finance the power sector generation capacity ($270Bn), and the T&D infrastructure ($135Bn)
Significant savings in terms of fuel costs for power considering the switch to 90% renewables (-$121 Bn) compensates for some of the CAPEX increases
Incremental investments from 2021-60 to reach Net Zero 2060, Bn USD
Infrastructure
This is largely driven by additional power transmission and distribution (T&D) infrastructure, gas T & D infrastructure and electric chargers.
Power T&D : ~$94.7 Bn
Gas T&D : ~$16.2 Bn (+7,000 km pipeline construction over usual spending at $2 Mn/km; refuelling stations $2.2 Bn)
Chargers : $16.0 Bn (~10.9 Mn home chargers at $250; 250 k fast chargers at $30k; 28k fleet hub chargers at $50k)
Industry
CAPEX spend driven by switch to zero-emissions technology. For instance, solar boilers are twice as expensive as gas boilers, driving about $8 billion of the cost differential. In addition, the use of zero emission fuels such as hydrogen in ammonia production and high temperature heating contribute to operational costs.
Power
Capital expenditure is driven by costs to build out generation capacity for electrifying full population as well as key sectors to aid decarbonization. To achieve net-zero goals, about 220GW of solar, biomass and hydro generation capacity, 90 GW of storage and 34GW of hydrogen systems need to be built:
Centralized Power:
About $189.5 Bn– $90Bn of solar utility scale (~200GW of at ~$440k/GW) + $42Bn of storage (90GW at av. 470k/GW) + $24Bn of hydrogen (34GW at ~$720k/GW) + $12Bn of hydro and 12Bn of biomass (6GW)
Decentralized Power:
About $82 Bn including ~$35 Bn for solar micro grids and ~$12 Bn for SHS in rural homes; $16.5 Bn for rooftop PV in urban homes and $6.6 Bn for grid connections
However, significant operational expenditure savings are expected due to minimal cost to operate low emissions appliances. For instance, natural gas cost of $0.007/MJ and diesel cost of $0.015/MJ compared to no operational fuel costs for renewable power.
Oil and Gas
There is minimal CAPEX spend beyond usual spending due to oil sector decline despite gas increase. Additional costs will be incurred for the application of Carbon capture and storage (CCS) in refining (~$6 billion) and gas expansion in the 2020s- 2030s (~$4 billion). However, OPEX savings are expected due to efficiency improvements as part of transition plan.
Cooking
CAPEX spend driven by switch to clean cooking technology. For instance, switch to grid-powered electric stoves costs $3 bn more than kerosene stoves. In addition, replacement of low/no OPEX fuels like firewood by electricity drive rise in operational costs.
Transport
