Prospects of Renewable Energy in Nigeria

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In 2020, global energy demand plummeted by 4% due to grounded flights, idled factories, and home lockdowns for commuters. However, amid this downturn, a specific sector in the world’s electricity markets demonstrated resilience and growth. According to a recent report from the International Energy Agency (IEA), the generation of renewable energy experienced its most rapid rate of expansion in two decades. For instance, global renewable capacity was projected to have surged by 107 gigawatts (GW) in 2023, representing the largest absolute increase ever recorded and reaching over 440 GW.

Though gradual, Nigeria also witnessed an increase in renewable capacity. As of 2022, the nation boasted a total renewable energy capacity of 2.16 megawatts. Over the decade from 2011 to 2021, the renewable energy capacity inched up from around two megawatts to 2.16 megawatts, a figure overshadowed by energy produced from generators.

According to research, Nigeria’s power generation capacity stood at 7.5GW, with 15.6% generated by renewables as of 2019. In contrast, 74% of the energy consumed in 2019 was produced by generators, resulting in an estimated $29 billion in economic productivity losses, according to the Nigeria Electrification Agency.

As the harmful effects of pollution and greenhouse gas emissions become increasingly evident, and the imperative for sustainable development takes center stage in the global energy conversation, there is a consensus among key players worldwide that shifting focus towards renewable energy is crucial for driving economic growth, especially in developing countries like Nigeria, where the need for investment is greatest.

This global paradigm shift, coupled with various government policy initiatives to incentivize renewable energy development and financing, has led to unprecedented growth in renewable energy projects, especially solar and wind, in many countries. Even for a country like Nigeria, where renewable energy has always been a part of the energy mix (hydropower accounts for about 12.5 percent of its on-grid energy), the current trend presents an opportunity to promote and attract sustainable investment in its energy sector.

Nigeria possesses significant renewable energy resources, including solar, wind, hydro, and biomass, offering ample potential for diverse renewable energy sources. Investing in these resources plays a pivotal role in the country’s economy. Beyond enhancing the productivity of the energy sector, it also ensures the survival and well-being of the planet.

In terms of investments, a publication by a Nigerian media outlet (Punch) reveals that the Federal Government attracted over $2 billion in investments in the renewable energy sector, mostly solar, over the past decade. Excluding other investments by private and corporate bodies running into millions of dollars, these investments could reduce dependency on fossil fuel imports which currently run at over 488,000 barrels per day, thereby enhancing energy security and insulating the country from global energy market fluctuations.

The energy sector contributed 32.6 percent of greenhouse gas (GHG) emissions, second only to the land-use change and forestry sector, which contributed 38.2 percent. This emphasizes the need to adopt more renewable energy as it could help Nigeria mitigate the impacts of climate change by reducing greenhouse gas emissions and aligning with global sustainability goals.

The renewable energy sector offers opportunities for job creation, local manufacturing, and entrepreneurship, contributing to economic growth and development. Recently, the federal government stated that the country aims to create 340,000 jobs with a transition to renewable energy by 2030 and 840,000 by 2060. This seems viable, given how renewable job numbers (worldwide) have steadily risen over the past decade, increasing from 7.3 million in 2012 to 13.7 million in 2022.

Renewable energy projects can play a crucial role in extending electricity access to remote and underserved areas and addressing energy poverty in rural communities. Considering that most farm produce consumed in Nigeria originates from rural areas, access to electricity within these communities will not only address energy poverty but also introduce mechanized farming, leading to an increase in the production of farm produce.

In the near future, Nigerians are likely to fully adopt renewable energy technologies, specifically solar energy. The reasons are simple. Aside from being unstable, the privatization of the Power Holding Company of Nigeria has led to a constant increase in the cost of electricity. With the recent lift of subsidies on petroleum, the price of fuel per liter increased drastically, thereby reducing the consumption of fuels for energy generation. 

Finally, the use of solar energy is cost-optimized, stable, reliable, and sustainable, making it an undeniable solution to Nigeria’s energy problems. It’s important to note that addressing challenges such as policy implementation, investment barriers, and public awareness will be crucial in unlocking the full potential of renewable energy in Nigeria.