In the global pursuit of achieving net-zero emissions by 2050, the transition to clean energy has become paramount. Nations worldwide are channeling investments into the renewable energy sector, and Nigeria, a significant player in Africa, is no exception. With a bold commitment to generate 30GW of electricity by 2030, of which 30% will be from renewable sources, Nigeria is poised to shape its energy landscape.
As solar panels adorn rooftops, wind turbines grace the countryside, and biofuels gain prominence, the clean energy revolution paints a promising and sustainable future. However, beneath the surface of this sustainable vision lies a complex world of manufacturing costs and critical minerals that are often overlooked but are fundamental to our clean energy aspirations.
Since the release of the International Energy Agency (IEA) analysis on the Role of critical minerals in clean energy transitions in March 2022, nations like Nigeria and organizations around the world have intensified their efforts in this direction.
In this blog post, let’s embark on a unique journey, one that unravels the tapestry of renewable energy within the Nigerian context. We will navigate the path paved with critical minerals, the elemental keystones that empower our clean energy dreams, and delve into the dynamic world of manufacturing costs, with a primary focus on solar energy systems. We aim to explore how these intricacies impact the affordability and accessibility of renewable energy technologies within our nation.
Critical Minerals Clean energy technologies, such as solar photovoltaic (PV) plants, wind farms, and electric vehicles (EVs), rely on a diverse array of minerals. This chart illustrates the increased demand for critical minerals in renewable energy compared to traditional hydrocarbon sources:
Lithium, nickel, cobalt, manganese, and graphite are essential for battery performance. Rare earth elements are vital for wind turbines and EV motors, while copper and aluminum are cornerstone materials for electricity networks.
Nigeria, richly endowed with critical minerals, including lithium, tantalite, tin, nickel, and rare earth elements, stands to benefit from the global demand surge for these materials.
The transition to clean energy places significant demand on critical minerals. According to Minister of Mines and Steel Development, Olamilenka Adegbite, World Bank estimates indicate that demand for battery storage minerals is projected to surge by 10 to 30 times by 2040. Nigeria, richly endowed with these critical minerals, including lithium, tantalite, tin, nickel, and rare earth elements, is well-positioned for this shift. Lithium mining occurs in Kogi, Kwara, Ekiti, and Cross River States, while tantalite, tin, and nickel are found in Plateau, Nasarawa, Kogi, and several other states. Additionally, substantial rare earth mineral deposits have been discovered in pegmatite and granites across Nigeria, and graphite is abundant in Kaduna State.
Meeting the goals of the Paris Agreement, particularly the aim of limiting global temperature rise to “well below 2°C” as outlined in the Sustainable Development Scenario (SDS) with the stated policies scenario (SPS), would necessitate doubling mineral requirements for clean energy technologies by 2040. In the pursuit of an even faster transition to achieve global net-zero emissions by 2050, the demand for minerals in 2040 is projected to increase sixfold compared to today.
The chart below shows the 2022 global demand for solar and wind and battery storages in relation to their stated policies scenarios and the net zero emission by 2040 & 2050.
Manufacturing Costs
Solar PV and Battery Manufacturing
Manufacturing costs play a pivotal role in shaping the affordability of renewable energy technologies. In Nigeria, manufacturing of solar equipment remains limited due to a lack of necessary materials and minerals. Only 10% of demand is met through local assembly.
In comparison to ten West African countries, Nigeria ranks 7th in terms of the feasibility of manufacturing solar energy products based on some criteria with Morocco, south Africa and Egypt topping the list (SEForAll African Manufacturing Report).
Manufacturing costs for solar PV systems in Nigeria remain high due to the importation of components. Most of the manufacturing takes place outside the country. Nigeria has potential for improvement in solar module assembly, which could help reduce manufacturing costs domestically.”
Battery manufacturing, particularly lithium-ion batteries, is another area with growth potential. While Nigeria possesses the raw materials, most batteries are imported from China.
Investing in a domestic lithium-battery value chain could unlock the potential for battery manufacturing in Nigeria, reducing import dependence and fostering local industries.
Manufacturing costs and critical minerals are at the heart of Nigeria’s journey toward affordable and sustainable renewable energy. As the nation strives to meet its ambitious energy goals, investing in local manufacturing capabilities will not only reduce reliance on fossil fuels but also stimulate economic growth and job creation, positioning Nigeria as a regional leader in renewable energy production.
In the pursuit of a cleaner, more sustainable energy future, Nigeria’s role in manufacturing and resource development is more critical than ever.
