In July, during the media parley held by Sterling Bank for its ASIS conference, Abubakar Suleiman, MD of Sterling Bank, spoke to journalists about the bank’s plans for energy transition in its Sterling Towers. He explained, “The ASIS summit aims to convince more investors to allocate capital for sustainable impact, not as something they do aside from their business but as something they do as part of the business. In line with our commitment, our building will be wearing a new look in a few months. We will be switching to solar energy, which keys into our renewable energy pursuit.”
A few months down the line, Sterling Bank headquarters now has the promised look, with about 6,500sqm of crystalline silicon PV glass lining the glittering surface of the Sterling towers. This energy system is called Building Integrated Photovoltaic (BIPV), which constitutes solar power generating products integrated into a building or part of building components such as façades, roofs or windows.
About 1 MWp of power would be generated through the energy system claimed to be the largest Building Integrated Photovoltaic (BIPV) energy technology in Africa. The applaudable development keys to one of the five focal sectors of the economy (agriculture, health, education, renewal energy, and transport) marked for intervention by the bank.
Importantly, not only will the BIPV establish the bank’s commitment and contribution to net zero emission but also as a viable option for Nigeria’s electricity crisis and its attendant fuel hike and scarcity, which has cost several industries and companies a fortune.
In the first half of 2022, top listed firms by market capitalisation, including Dangote Cement, BUA Foods, Guaranty Trust Holding Company (GTCO), and Zenith Bank, expended N207.54 billion on energy. This figure represents 33.16 per cent from N155.86 billion in the same period last year. Dangote Cement, which accrued the most energy cost, reported a 31.32 per cent increase to N129.97 billion from N98.97 billion in H1 2021. Dangote Cement’s energy cost made up 40.31 per cent of its total production cost of sales in the first half of 2022.
In the banking industry, Zenith Bank experienced a 55.27 per cent growth in fuel and maintenance costs to N13.12 billion in H1 2022 from N8.45 billion in the same period last year. Similarly, GTCO followed, with a 58.65 per cent increase in occupancy costs from N2.37 billion in H1 2021 to N3.76 billion this year.
The vast expense is not surprising, as the country has been through a roller coaster of energy-threatening circumstances. In 2022 alone, the national grid has collapsed at least five times, and the year is not over. Fuel, which has unavoidably become the resolve for many Nigerians, has had its production/availability strained due to factors like the importation of off-spec fuel into the country and the Russian-Ukraine war. These have significantly spiked the cost Nigerian firms use in running their operations.
Consequently, the management of the above-stated companies said it was strengthening its efforts to ramp up the usage of alternative fuels, which aims to leverage waste management solutions, reduce CO2 emissions, and source material locally.
So it will not be surprising to see companies follow in the footsteps of Sterling Bank’s BIPV, as the bank has now become a reference for modernity and sustainability in the country.
Future of BIPVs in Nigeria
BIPVs are not new architectural energy integration across the world, with countries such as the Netherlands, Japan, Germany, United States and Australia taking the lead. Globally, it harbours so much potential, with a market size expected to reach $7 billion by 2024, growing at an impressive CAGR of about 15% from 2018–2024.
However, its adoption in Africa/Nigeria is not widespread – one reason for this is the high cost of installation and subsequent maintenance of the energy system. Even the installation of small-scale solar panels for private homes has not experienced massive adoption in the country due to cost. Despite being among the fastest-growing in Africa, the Nigerian solar off-grid market still has a long way to go, as its installed PVs per capita amount to only about 1W compared to an average of 8W in similar emerging markets.
However, the future holds many promises regarding its adoption. The world is racing towards a low-carbon future, which puts it in a position of being massively desirable in the coming years. More adoption could mean less installation cost.
A good omen for Nigeria’s energy transition projects
A green economy is the priority of many governments globally. There have been both national and international efforts to achieve a global net zero emission by 2050, and in the case of Nigeria, 2060.
But funding climate-smart projects could be difficult. The rise of innovations powered by renewable energy has made it obvious oil will become less desirable in the global market in the coming years. Consequently, this poses a challenge for a country like Nigeria, where oil is integral to its economy. Sadly, the yearly US$100 billion pledge by wealthier nations to help poorer countries deal with climate change is yet to be fulfilled.
Therefore there is an urgent need for Nigeria to become innovative and look for ways to make Nigeria a desirable investment spot for renewable energy. For this to happen, a public-private partnership is necessary. More renewable energy projects, as exemplified by Sterling Bank, could serve as a light for investors in the budding green energy sector.
If adopted by government institutions, it could be a good selling point for subsequent Debt-for Climate swap agreement recently proposed by the federal government. Not only will this expedite Nigeria’s energy transition plan, but it will also reduce her rising debt burden.