SUPPORTING THE OIL BASED ECONOMY (PT2)

Each time I have a reason to pack my car directly under the sun for more than 30 minutes, I always have to wait for a minute or two after opening the door before I step inside, because of the heat generated, what comes to mind thereafter usually is the enormous amount of solar energy and radiation available, especially in the Northern parts of Nigeria. This is Abuja, with solar irradiation average of 5.55 kW/m²/day and a wind speed average of 2.38 m/sec. I also imagine the enormous amount of solar energy available further north, in places like Birnin Kebbi with a solar irradiation average of 6.04 kW/m²/day and a wind speed average of 2.33 m/sec, Maiduguri with an average solar irradiation of 5.96 kW/m²/day and a wind speed average of 3.80 m/sec.

In the United States solar power is the largest available energy source. Renewable resources (solar, wind, geothermal, hydroelectric, biomass, and waste) provided nearly 12% electricity supply in 2003. Also as a result of the eight year extension of the 30% solar tax credit, it is estimated that an additional 28,000 megawatts (MW) of solar power will be installed by the end of 2016. The State of California is a model for the potential of alternative and renewable energy sources, it's Mojave Desert is home to the world's largest concentrating solar power facility. The State's solar irradiation averages between 4.0 - 6.0 kW/m²/day.

From the U.S. Solar Energy Industries Association (SEIA)- "2008 Solar Industry Year in Review" the U.S. solar energy capacity increased by 17% last year, with a total of about 8,775 megawatts (MW). Currently, a total of 342 MW of solar photovoltaic (PV) electric power, 139 thermal megawatts (MWTh) of solar water heating, 762 MWTh of pool heating, and 21 MWTh of solar space heating and cooling were installed in the U.S.

The question therefore is- what are the economic and energy implications of the ever increasing growth on the reliance of renewable/domestic energy sources in countries like the U.S on an oil based economy such as Nigeria? What will be the direct effect of all these indices on Nigeria in the next 20 years if current scenarios remain unchanged?

Even though Oil remains the most important and most consumed energy resource in the world right now, the simple rule of economics implies that reduction in demand due to alternatives will lead to reduction in prices and thus less revenue on the mid and long term for any state that cannot supply the preferred alternatives, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more or is more advantageous. Currently the U.S. is the biggest buyer of Nigeria's crude oil.

On the energy front, if there is a reduction in the purchase of crude oil and there is no adequate domestic refining and processing capacity, then the inevitable result will be waste.

What needs to be done is to build a structure that creates the balance between the available energy resources in the country, the paradigm shifts in the foreign market and sustaining a domestic economy.