Cement makers race to alternative energy to tame rising power costs

Nigerian Cement Makers Racing to Switch to Renewable Energy Sources

Nigerian cement makers are actively pursuing the adoption of renewable energy sources to reduce their power and fuel bills, particularly diesel. In Africa’s largest economy, cement manufacturers primarily rely on self-generated power due to the insufficient stability of the national power grid infrastructure. The escalating energy costs faced by these companies highlight the urgency for sustainable solutions.

Financial Impact on Cement Manufacturers

1. Dangote Cement’s energy cost increased by 21 percent to N157.02 billion in the first half of 2023.
2. BUA Cement’s energy cost grew by 10 percent to N47.91 billion in the same period.
3. Lafarge Africa experienced an increase in production fixed costs, including personnel expenses and electrical energy expenses, reaching N13.55 billion in H1 2023.

Investment in Alternative Energy Projects

• Cement makers are heavily investing in alternative energy projects to diversify their energy mix and reduce dependence on diesel, coal, and Low Pour Fuel Oil (LPFO) sources.
• BUA Cement has started utilizing locally sourced Liquefied Natural Gas (LNG) at its Sokoto plant, reducing reliance on imported coal, low-pour fuel oil, and diesel.
• BUA Cement also signed an agreement with Wartsila OY of Finland in 2021 to construct a 70-megawatt dual-fuel power plant for its Obu Line 3 project in Edo State.
• Dangote Cement is exploring the feasibility of increasing the use of alternative energy sources, such as agro wastes, waste lubricants, tire-derived fuels, sawdust, and packaging materials.
• Lafarge Africa is substituting fossil fuel with renewable energy sources, such as biomass and other wastes, at its Sagamu and Ewekoro plants.

Commitment to Sustainable Development Goals (SDGs)

The cement industry in Nigeria is aligned with the Sustainable Development Goals (SDGs) and is actively working towards achieving them. These goals include:

1. Goal 7: Affordable and Clean Energy – Cement makers are adopting alternative energy sources to reduce emissions and promote clean energy.
2. Goal 9: Industry, Innovation, and Infrastructure – Investments in alternative energy projects demonstrate a commitment to innovative solutions and sustainable infrastructure.
3. Goal 12: Responsible Consumption and Production – Cement manufacturers are striving to reduce their dependence on fossil fuels and adopt alternative fuels to achieve a thermal substitution rate of 25 percent by 2025.

The efforts of Nigerian cement makers to transition to renewable energy sources are crucial for achieving the SDGs and promoting sustainable development in the country’s cement industry.

SDGs, Targets, and Indicators

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
   • Target 7.3: By 2030, double the global rate of improvement in energy efficiency.

   The article discusses how Nigerian cement makers are switching to renewable energy sources to reduce their power and fuel bills. This aligns with SDG 7, which aims to ensure access to affordable, reliable, sustainable, and modern energy for all. The targets under SDG 7 that can be identified based on the article’s content are increasing the share of renewable energy in the energy mix and improving energy efficiency.

   Indicators:

   • Percentage of energy generated from renewable sources
   • Energy cost savings achieved through the use of renewable energy
   • Reduction in greenhouse gas emissions from energy generation

2. SDG 12: Responsible Consumption and Production

   • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
   • Target 12.4: By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle.

   The article mentions that cement makers are adopting alternative fuels and implementing strategies to cut emissions of greenhouse gases. This relates to SDG 12, which focuses on promoting sustainable consumption and production patterns. The targets under SDG 12 that can be identified based on the article’s content are the sustainable management and efficient use of natural resources and the environmentally sound management of chemicals and wastes.

   Indicators:

   • Percentage of alternative fuels used in cement production
   • Reduction in fossil fuel consumption in cement production
   • Reduction in greenhouse gas emissions from cement production

Table: SDGs, Targets, and Indicators

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Source: businessday.ng

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