For years, fossil fuels have been the lifeblood of Nigeria’s energy sector, with petroleum and natural gas serving as the cornerstone of the country’s energy supply. However, after decades of dependence on these finite resources, the country is gradually transitioning towards a cleaner energy paradigm. Renewable energy sources like wind, solar, and biomass are gaining traction, providing a more sustainable and eco-friendly solution to meet Nigeria’s increasing energy demands and marking a significant shift away from the country’s long-standing reliance on fossil fuels.

Trend Analysis Over the Last Decade

In 2020, fossil fuels comprised about 85% of Nigeria’s energy use. Renewables, including wind, solar, and biomass, accounted for roughly 12%, with the remaining 3% coming from other sources like hydroelectric power. By 2022, fossil fuels generated around 23.28 terawatt-hours (TWh) of electricity, mainly from natural gas.

Over the past decade, Nigeria has made impressive strides in increasing its renewable energy capacity:

• Solar capacity jumped from 1.5 MW in 2015 to over 150 MW in 2022.
• Wind capacity rose from 0.5 MW in 2015 to about 20 MW in 2022.

Some notable projects include the 140 MW Qua Iboe Power Plant in Akwa Ibom State and the 10 MW Katsina Wind Farm in Katsina State, showcasing the potential of renewables in Nigeria.

Driving Factors

Several factors are propelling Nigeria’s shift towards renewable energy:

1. Government Policies: Initiatives like the Renewable Energy Master Plan (REMP) and the Climate Change Act of 2021 aim to boost renewable energy capacity and cut greenhouse gas emissions. Projects like the NaijaSolar Power Project focus on expanding off-grid solar connections.
2. Economic Hurdles: Despite positive developments, Nigeria’s transition to renewable energy is hindered by inadequate infrastructure, high costs of renewable technologies, and dependence on fossil fuel subsidies, which create uncertainty and obstacles for the country’s sustainable energy future.
3. Major Solar Energy Investment: On November 19, 2023, Nigeria’s Minister of Power, Adebayo Adelabu, announced a significant $2.2 billion contract for solar energy projects. This agreement, in collaboration with Sun Africa LLC, a US-based renewable energy solutions provider, aims to deliver 961 megawatts peak (MWp) of solar photovoltaic (PV) generation infrastructure and 455-megawatt hours (MWh) of battery energy storage systems. Backed by ING Bank, Citi, and the US-EXIM Bank, which has pledged up to $10 billion in the coming years, the project is a key component of Nigeria’s wider strategy to improve its power infrastructure, address growing energy needs and advance economic and energy sustainability.

Trend Analysis and Future Projections

Over the past ten years, the trend shows a steady increase in renewable energy capacity. From 2013 to 2023, government initiatives and international investments have driven growth in the renewable sector. Projections for 2024-2034 indicate a compound annual growth rate (CAGR) of 9.88%, potentially reaching approximately 5.01 gigawatts (GW) by 2029. By 2025, renewables could account for 23% of Nigeria’s energy mix, rising to 36% by 2030.

Recommendations

To drive progress and achieve a sustainable energy future, consider the following strategic recommendations:

1. Comprehensive Renewable Energy Policy: Establish clear targets and incentives for renewable energy to create a stable environment for investors.
2. Invest in Grid Expansion and Modernization: Enhance grid infrastructure to accommodate increased renewable energy integration, ensuring reliable and efficient energy distribution.
3. Streamlined Regulations: Simplify approval processes for renewable projects and offer incentives for private investments.

Nigeria is at a crucial crossroads in its energy sector, ready to transition towards a more sustainable and diversified energy mix. Through strategic policy implementation and investments in renewable energy infrastructure, Nigeria can diminish its dependence on fossil fuels, improve energy accessibility for its expanding population, and play a significant role in global climate change mitigation efforts.

This Post was submitted by Climate Scorecard Nigeria Country Manager Michael Johnson.