Nigeria’s energy sector faces challenges with regard to inadequate electricity access, leading to reliance on costly generators. Transitioning to renewables offers solutions. Samuel Ajala reports.
(Photo by Sandra Parra on Unsplash)
Nigeria has the largest economy in Sub-Saharan Africa, with an estimated population of 226 million as at 2023. A significant amount of the economy is powered largely by small-scale generators, and almost 50% of the population have limited or no access to the grid.
This is because the country’s electricity supply sector is characterized by inadequate production, transmission and distribution of electricity, which continues to rise. The electricity access rate in Nigeria was 59.50% as of 2021, while there are about 92 million people without power in the country.
As a result, Nigerians and their businesses spend almost $14 billion annually on inefficient generation that is expensive ($0.40/kWh or more), of poor quality, noisy and polluting.
According to a report by the Rural Electrification Agency (REA), developing off-grid alternatives to complement the grid could create a $9.2-billion-per-year market opportunity for mini-grids and solar home systems that will save $4.4 billion per year for Nigerian homes and businesses.
The country’s energy mix is largely dominated by non-renewable, thermal (natural gas and coal) energy sources, which make up 81% of the total installed capacity.
Nigeria has shown its commitment to the global transition to a sustainable energy future and increasing its share of renewables in the energy mix.
Renewable sources – solar, wind, biomass and hydro – potential in Nigeria has been estimated at over 68,000 MW, which has led to a rapidly increasing demand for energy services.
Nigeria signed and ratified the Paris Agreement, a landmark agreement to reduce global greenhouse gas emissions to limit global temperature increase to below 2°C, and has made commitments to develop its energy system in line with these goals.
In 2021, the Nigerian government launched its energy transition plan to achieve universal energy access by 2030 and a carbon-neutral economy by 2060. The plan aims to bring modern energy services to the full population.
Getting off-grid solutions to scale and commercial viability in Nigeria will unlock an enormous market opportunity with smaller demand and/or less robust economies.
Energy poverty challenges faced by local communities
Damilola Hamid Balogun, co-founder and chief executive officer of Youth Sustainable Development Network, said in an interview with Energytransition.org that many rural communities in Nigeria faced severe energy poverty. He said that only about 30% of the rural population had access to electricity, leaving the remaining 70% underserved.
According to Balogun: ‘The national grid favored urban areas due to higher demand and better payment capabilities, neglecting remote communities. Residents often relied on expensive and polluting diesel generators. This lack of reliable electricity hindered economic activities, access to clean water, healthcare services, and educational opportunities and slowing down development.’
Chibueze Ekeh, CEO of Ceesolar Energy Limited, also noted that local communities faced perpetual power outage with no access to the grid. He noted that lack of electricity made it difficult for businesses to operate efficiently, increased the cost of operations due to reliance on generators and negatively impacted essential services like healthcare and education.
Roles played by governments and private companies
The Nigerian Rural Electrification Agency is tasked with the electrification of rural and unserved communities.
Balogun added that local governments and private companies have played crucial roles in supporting renewable energy projects in Nigeria. He said that the REA has been instrumental in funding and overseeing the deployment of renewable energy solutions:
‘The recent Rural Electrification Agency (REA) projects have resulted in the generation of 600 megawatts (MW) of electricity, impacting about five million people across the country. Solar mini-grid systems powered six communities with a 100 kilowatts (kW) system, providing energy for over 8,155 people, including 5,000 active farmers.
‘Clearly, this shift to renewable energy has reduced the reliance on expensive and unreliable fossil-fuel generators, leading to lower electricity costs and enhanced energy reliability, which has substantially improved the quality of life in rural areas,’ he continued.
Local renewable grids positively impacting communities
Ekeh said that local renewable grids have made a significant impact on Nigerian communities by providing affordable and reliable electricity. He said his team carried out the Abaribara project in Cross River State to install a 27 kWp solar hybrid mini-grid that has drastically improved the power supply of the whole community.
According to Ekeh: ‘Before implementing the renewable grid in Abaribara, the community faced perpetual power outage with no access to the grid. Only a handful of privileged local community members had the small “I better pass my neighbor” generator.’
He added that: ‘This lack of electricity made it difficult for businesses to operate efficiently, increased the cost of operations due to reliance on generators, and negatively impacted essential services like healthcare and education. The community’s agricultural productivity was also hampered because they couldn’t use modern processing equipment without a reliable power source.’
Balogun also alluded to the fact that local renewable grids have significantly transformed communities in Nigeria by providing more affordable and reliable electricity.
He said collaborations have enabled the installation of solar mini-grids in local communities with the implementation of SHS technology, and innovative solutions like the CoolCycle initiative led, by his team and Kamim Technologies, which repurposes discarded generator materials to create solar-powered cooling systems: ‘These partnerships have been essential in scaling up renewable energy projects and ensuring their sustainability.’
He also said that in line with global trends, Nigeria’s focus on solar energy mirrors the recent S&P Global Commodity Insights projection that solar will receive the largest share of clean energy investments in 2024, accounting for about 55% of the total $800 billion expected globally: ‘This alignment shows Nigeria’s commitment to harnessing solar power for sustainable development.’
Finally, Balogun said that the integration of renewable energy grids in Nigeria’s rural communities exemplifies the transformative potential of sustainable energy solutions.
‘Beyond addressing immediate energy needs, these initiatives contribute to broader goals of environmental sustainability by reducing carbon emissions and reliance on fossil fuels. As such, I believe that by continuing fostering partnerships between government, private sector, and local communities, particularly in boosting renewable energy investments, Nigeria can continue to expand energy access, promote economic development, and improve the overall quality of life for its rural population,’ he concluded.
The views and opinions in this article do not necessarily reflect those of the Heinrich-Böll-Stiftung European Union.