Changing the narrative about energy transition

Energy transition is perceived in any quarter to mean an end to fossil fuel. While many have argued that oil will ‘peak’ by 2050, others say oil will continue to play a very significant role in industrialization across the globe: BENJAMIN UMUTEME writes. 

Energy transition refers to a significant shift in the global energy sector from fossil fuels like coal, oil, and natural gas to renewable energy sources such as solar, wind, and hydroelectric power. This transition aims to reduce greenhouse gas emissions and mitigate climate change by decarbonizing energy production and consumption.

Key drivers include declining renewable energy costs, technological advancements, and policy changes. Challenges include ensuring grid stability and managing the economic impacts on industries reliant on fossil fuels. The transition also offers opportunities for job creation and improved energy efficiency. 

Some of the challenges industry players say include: energy security; macroeconomic impacts; North-South divide; mineral supply chain; technical challenges, and policy and regulatory frameworks. 

Analysts have opined that to address the back and forth between the North-South divide in the energy transition there is need for strategic alignment and enhanced collaboration. It means advanced economies should deepen their engagement with developing countries to align priorities and pace of transition. 

Another way of addressing the North-South divide has to do with technology transfer and capacity building. Collaboration on technology, financing, and workforce development can help bridge the gap in the Global South. 

There are also arguments that advanced economies should provide incentives and subsidies to developing countries to help them transition to renewables while at the same time addressing energy security and affordability. 

Shifting investments 

While the global North has been vociferous in its energy transition drive, the global South has had to contend with trying to carve its own part. For Europe and America, its energy transition is on course and going in the right direction with several milestones already met. The increase in investments in renewables and the withdrawal of funding for fossil fuel projects. 

According to data from the International Energy Agency (IEA), spending on clean energy technologies and infrastructure in 2024 steadily climbed towards $2 trillion. This is even as higher financing costs hindered new projects, notably in emerging and developing economies.

The global energy watchdog noted that despite pressures, investments in clean energy almost double the amount that went into fossil fuels in 2024. 

“Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy. For every dollar going to fossil fuels today, almost two dollars are invested in clean energy.

“The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security. But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains. More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today,” said IEA Executive Director Fatih Birol.

The oil ‘peak’ myth

For decades, there have been talks about global oil demand topping out. According to Organization of Petroleum Exporting Countries (OPEC) data, oil demand was below 90 mbpd in 2012, thirteen years later, oil demand is above 100 mbpd. 

According to OPEC Secretary General Haitham Al Ghais, despite the assertion by the IEA in 2023 that it envisaged global oil demand peaking by 2030, calling for a halt to new oil investments. The OPEC scribe pointed out that the IEA had earlier said more investments are needed in the oil and gas sector. 

“Today, what is clear is that peak oil demand is not showing up in any reliable and robust shirt and medium-term forecasts. 

“For instance, take 2023 and 2024. At OPEC, we see oil demand growth of 4.7 mbpd over the two years, with ESAI at over 4 mbpd too, Rystad and Argus close to this level. Even the IEA sees growth of 3.4 mbpd over the 2023-2024 period,” the OPEC chief said. 

The implication for the global community is that there is still room for investments in the oil sector. 

With crude oil and its derivatives, a constant reminder that oil plays a key role in everyday human activities, analysts say oil is not peaking any time soon. 

“Moreover, technological improvements are allowing us to not only find new resources, but enabling us to take huge strides in reducing emissions, as exemplified by the availability of cleaner fuels, much improved efficiencies and technologies such as carbon capture, utilization and storage, carbon dioxide removal and direct air capture. 

“Ultimately, peak oil supply has never come to pass, and predictions of peak oil demand are following a similar trend. Time and again, oil has defied expectations regarding peaks. Logic and history suggest that it will continue to do so,” he further said. 

Clarion call

The Secretary General of the African Petroleum Producers Organization (APPO), Umar Farouk Ibrahim, opined that the ‘peak’ oil myth being bandied around does not align with realities on ground. 

In his address at the opening ceremony of the Nigeria International Energy Summit (NIES 2025), the APPO scribe said the narrative is a mindset that feeds into the stereotype that the continent cannot chart its own course. 

He noted that with the abundant natural resources at its disposal, the continent should be driving its own development and not waiting for outside support. 

“It’s a mindset that perpetuates a stereotype that Africans are incapable of charting their own course, of making progress or of exploiting their abundant natural resources without depending on others. In short, it’s a mindset that sees Africa and by implication, Africans as inferior beings, because they have come to accept that others shall lead, financially, technologically, militarily and they are content to become followers. 

“We have been made to believe that Africa is too poor to finance energy projects. That it is incapable of developing and mastering the technology of the industry, and so must always look up to others to develop the technologies and get the owners of those technologies to be transferred to us. That African people are too poor to buy energy, and so they have to produce their god endowed energy for others while they remain without energy. 

“How else, ladies and gentlemen, does one explain the paradox of a continent with the largest proportion of the world’s population, nearly a billion people living without access to modern energy for cooking and other domestic use, with some 600 million of its population not having access to electricity, yet we export 75% of the oil that we produce and 45% of the gas that we produce. 

“Excellencies, ladies and gentlemen, if Africa must change for the better and do so with the speed that is teeming youth population experts, we need to critically question many of the received wisdoms that shape the thoughts of our leaders and our people, including our academia, our media, our politicians, our military, our businessmen and women and our industrialists. It is the recognition of this need for Africa to look within to find solutions to its challenges that inform on our part the decision to partner with afreximbank to fund the Africa Energy Bank,” he said passionately. 

Blueprint