Opinion
Global Concerns Over Solar And Wind
Amid rising global concerns following Japan’s disastrous March 11, 2011, nuclear catastrophe at TEPCO’s Fukushima Daichi nuclear complex and surging oil prices, renewable energy is receiving increased attention from investors.
The leading candidates are solar and wind energy, but both have problems beyond significant investment costs and the fact that they have yet to generate power at competitive rates with more traditional power sources such as oil, coal and natural gas.
Beyond issues of power storage, a further concern is the fickle nature of their sources – the sun does not always shine, and the wind is hardly a constant factor.
So, among renewable, which potential power source is so reliable that admiralties have been publishing detailed charts of its progressions for more than two centuries?
Tides are generated by the gravitational forces of the moon. Should these be disrupted, then investors, power companies and governments will likely have more immediate concerns than the quarterly bottom line.
Similar to solar power, currently battling between photovoltaic power and parabolic mirror steam-generated turbine driven systems, no industry-wide standard for tidal power has yet emerged, but smart investors will follow the money trail.
That said, Britain is swiftly emerging as the cutting edge country for tidal development. Proof?
On February 17, at the Anglo-French summit, a memorandum of understanding was signed to develop the FABLink interconnector between France, Alderney and Britain, which would help transport tidal power from an Alderney Renewable Energy (ARE) tidal project and French grid operator, Reseau de Transport d’Electricite (RTE).
ARE also signed an agreement with French industrial group Direction des Constructions Navales (DCNS) to develop tidal arrays in Alderney’s waters to provide up to four gigawatts of tidal power via the FABLink interconnector between Britain, Alderney and France, permitting the transfer of about four gigawatts of tidal energy from Alderney’s waters.
If all goes well, the contracts will result in the construction of one of the largest tidal power farms in Europe.
So, will tidal power trump its renewable competitors?
Consider – solar and wind power are struggling, in Europe at least.
Denmark’s Vestas Wind Systems AS, the world’s biggest wind turbine maker, since 2008 has seen its stock value plummet by 90 per cent and the US pre-eminent solar energy firm First Solar, has seen its stock decrease from more than $250 to just over $40 during the same period.
And in the Third World, given duelling photovoltaic systems versus steam turbine systems, even China’s photovoltaic solar-panel manufacturer Suntech Power Holdings and India’s alternative parabolic mirror solar-powered steam turbine manufacturer Suzlon Energy Inc have suffered significant stock losses over the past few years.
Even in Germany, which since Fukushima has declared its intention to shutter its nuclear power plants and make up the country’s electrical deficit from an expanded commitment to renewable energy has seen its massive solar panel manufacturer Q-Cells restructure its debt to stave off bankruptcy.
And wind and solar “First World” renewable energy is unlikely to recover anytime soon, for a number of reasons. Decreasing natural gas prices, China’s increasing production of photovoltaic cells have combined with the global recession, which began in 2008, to impel many governments to begin cutting budgets and subsidies to “go with what they know” in terms of power generation.
That said, British-French investment in a renewable energy source that harnesses a predictable power source is a strong sign of the future viability of the concept.
No less an authority than the International Energy Agency (IEA) is endorsing renewable energy. In presenting its upcoming “Deploying Renewables 2011: Best and Future Policy Practice,” to be published in July, IEA Executive Director, Maria van der Hoeven said in Berlin, “‘A portfolio of renewable energy technologies is becoming competitive in an increasing range of circumstances and countries.”
With both Britain and France mired in the EU’s economic downturn but nevertheless funding tidal power projects, maybe it’s time for smart investors to expand their portfolios and consider floating their boats with tidal power.
You read it here first.
Dr. Daly of Oilprice.com wrote from London.
John Daly
From all indications, Nigeria possesses enough human and material resources to become a true economic powerhouse in Africa. According to the National Population Commission (NPC, 2023), the country’s population has grown steadily within the last decade, presently standing at about 220 million people—mostly young, vibrant, and innovative. Nigeria also remains the sixth-largest oil producer in the world, with enormous reserves of gas, fertile agricultural land, and human capital.
Yet, despite this enormous potential, the country continues to grapple with underdevelopment, poverty, unemployment, and insecurity. Recent data from the National Bureau of Statistics (NBS, 2023) show that about 129 million Nigerians currently live below the poverty line. Most families can no longer afford basic necessities, even as the government continues to project a rosy economic picture.
The Subsidy Question
The removal of fuel subsidy in 2023 by President Bola Ahmed Tinubu has been one of the most controversial policy decisions in Nigeria’s recent history. According to the president, subsidy removal was designed to reduce fiscal burden, unify the foreign exchange rate, attract investment, curb inflation, and discourage excessive government borrowing.
While these objectives are theoretically sound, the reality for ordinary Nigerians has been severe hardship. Fuel prices more than tripled, transportation costs surged, and food inflation—already high—rose above 30% (NBS, 2023). The World Bank (2023) estimates that an additional 7.1 million Nigerians were pushed into poverty after subsidy removal.
A Critical Economic View
As an economist, I argue that the problem was not subsidy removal itself—which was inevitable—but the timing, sequencing, and structural gaps in Nigeria’s implementation.
- Structural Miscalculation
Nigeria’s four state-owned refineries remain nonfunctional. By removing subsidies without local refining capacity, the government exposed the economy to import-price pass-through effects—where global oil price shocks translate directly into domestic inflation. This was not just a timing issue but a fundamental policy miscalculation.
- Neglect of Social Safety Nets
Countries like Indonesia (2005) and Ghana (2005) removed subsidies successfully only after introducing cash transfers, transport vouchers, and food subsidies for the poor (World Bank, 2005). Nigeria, however, implemented removal abruptly, shifting the fiscal burden directly onto households without protection.
- Failure to Secure Food and Energy Alternatives
Fuel subsidy removal amplified existing weaknesses in agriculture and energy. Instead of sequencing reforms, government left Nigerians without refinery capacity, renewable energy alternatives, or mechanized agricultural productivity—all of which could have cushioned the shock.
Political and Public Concerns
Prominent leaders have echoed these concerns. Mr. Peter Obi, the Labour Party’s 2023 presidential candidate, described the subsidy removal as “good but wrongly timed.” Atiku Abubakar of the People’s Democratic Party also faulted the government’s hasty approach. Human rights activists like Obodoekwe Stive stressed that refineries should have been made functional first, to reduce the suffering of citizens.
This is not just political rhetoric—it reflects a widespread economic reality. When inflation climbs above 30%, when purchasing power collapses, and when households cannot meet basic needs, the promise of reform becomes overshadowed by social pain.
Broader Implications
The consequences of this policy are multidimensional:
- Inflationary Pressures – Food inflation above 30% has made nutrition unaffordable for many households.
- Rising Poverty – 7.1 million Nigerians have been newly pushed into poverty (World Bank, 2023).
- Middle-Class Erosion – Rising transport, rent, and healthcare costs are squeezing household incomes.
- Debt Concerns – Despite promises, government borrowing has continued, raising sustainability questions.
- Public Distrust – When government promises savings but citizens feel only pain, trust in leadership erodes.
In effect, subsidy removal without structural readiness has widened inequality and eroded social stability.
Missed Opportunities
Nigeria’s leaders had the chance to approach subsidy removal differently:
- Refinery Rehabilitation – Ensuring local refining to reduce exposure to global oil price shocks.
- Renewable Energy Investment – Diversifying energy through solar, hydro, and wind to reduce reliance on imported petroleum.
- Agricultural Productivity – Mechanization, irrigation, and smallholder financing could have boosted food supply and stabilized prices.
- Social Safety Nets – Conditional cash transfers, food vouchers, and transport subsidies could have protected the most vulnerable.
Instead, reform came abruptly, leaving citizens to absorb all the pain while waiting for theoretical long-term benefits.
Conclusion: Reform With a Human Face
Fuel subsidy removal was inevitable, but Nigeria’s approach has worsened hardship for millions. True reform must go beyond fiscal savings to protect citizens.
Economic policy is not judged only by its efficiency but by its humanity. A well-sequenced reform could have balanced fiscal responsibility with equity, ensuring that ordinary Nigerians were not crushed under the weight of sudden change.
Nigeria has the resources, population, and resilience to lead Africa’s economy. But leadership requires foresight. It requires policies that are inclusive, humane, and strategically sequenced.
Reform without equity is displacement of poverty, not development. If Nigeria truly seeks progress, its policies must wear a human face.
References
- National Bureau of Statistics (NBS). (2023). Poverty and Inequality Report. Abuja.
- National Population Commission (NPC). (2023). Population Estimates. Abuja.
- World Bank. (2023). Nigeria Development Update. Washington, DC.
- World Bank. (2005). Fuel Subsidy Reforms: Lessons from Indonesia and Ghana. Washington, DC.
- OPEC. (2023). Annual Statistical Bulletin. Vienna.
By: Amarachi Amaugo