By Yange Ikyaa
A recent report by the Renewable Energy and Energy Efficiency Association-Alliance (REEEA-A), showed that Nigeria will need to invest $34.5 billion into financing energy supply projects that the nation will need to plug an existing electricity deficit and also grant its over 200 million citizens access to electricity by the year 2030.
Titled “The Renewable Energy Roadmap Nigeria,” a breakdown of the report revealed that Nigeria will require an annual investment of $4.93 billion in the next seven years in order to meet the target of delivering 20,000 megawatts (MW) to a population of over 200 million people.
The country’s current electricity supply is around 4,500 megawatts, as against the 13,000-megawatt generation capacity, according to data from Nigeria Electricity System Operator. This is indicative of the struggle to meet the electricity demands of Nigerian citizens, which is largely due to transmission challenges, as the national grid can hardly cope with the transmission of over 4500 megawatts without experiencing a sudden collapse.
“The situation was fueled by problems, including a lack of gas, machine breakdowns, seasonal water shortages and limited grid capacity,” said the REEEA-A report. “This has resulted in frequent blackouts, while many households and businesses take to self-generation off-grid electricity using diesel and gasoline generator sets,” the report added.
While affirming that around $34.5 billion in total investment will be required to provide electricity access to all households by 2030, the report also grouped electricity supply system in the country into two, namely centralized or grid-connected and decentralized or off-grid systems.
The centralized system consists of the large-scale generation of electricity at centralized facilities such as large hydro and thermal plants. The decentralized electricity supply system consists of a few kilowatts to megawatt capacities such as captive diesel and gasoline generator sets, as well as renewable energy technologies, such as solar home systems, streetlights and mini-grids.
REEEA-A maintained that “the total installed capacity of grid-based systems is around 13 gigawatts (GW). However, today’s available on-grid peak generation varies and hovers around 4.5 GW.”
Nigeria’s on-grid generation is dominated by natural gas power stations (86 percent) and large hydropower plants (14 percent). However, unavailability of gas, machine breakdowns, seasonal water shortages and limited grid capacity have severely limited the operational performance of these power plants.
With this challenge of sourcing energy from conventional grid options, the country may do well to look the way of more renewable options apart from hydro.
While it remains difficult to know the actual renewable energy generation capacity in Nigeria, figures from the Nigerian Electricity Regulatory Commission (NERC) show a target of 2000 megawatts from renewables by 2030, which is certainly not enough or encouraging for the “Giant of Africa”.
This is because as other countries continuously add renewable energy capacity against coal, natural gas and petrochemical oil combined, Nigeria remains at the back of the queue in this “smart” economic option, which holds immense potential for economic growth and environmental sustainability.
This is dwarfed by more ambitious efforts even from Nigerian peers, as Kenya plans to generate 3,000mw of electricity in 2030 from wind power alone, according to data from the German Energy Desk in Nairobi.
The size of the global renewable energy market is valued at $1.1 trillion, according to 2022 figures by Grand View Research, which also reported the projected market growth at a compound annual rate (CAGR) of 16.9% from 2023 to 2030.
This is a leap from the global renewable energy economy that was worth $614.92 billion in 2015, and was growing at the rate of 7.5 percent annually, as was tracked by MarketsandMarkets (M&M), a global market research and consulting firm based in the United States.
Renewable energy refers to energy produced from sources that are replenished by natural processes, as against fossil fuels, such as coal and petroleum which pollute the environment and cannot be recovered after consumption. They include solar, hydro, wind, geothermal and biofuel.
As far back as the first three quarters of 2015 alone, China added 9.9gw (9,900mw) of new solar powered initiatives, which was valued at that time as the equivalent to more than a tenth of the UK’s entire domestic power generation. Meanwhile, renewable energy penetration exceeded 25% in the UK in 2015 and overtook coal generation for the first time in the same year.
On the contrary, about 80 percent of Nigeria’s estimated 7,500mw electricity capacity is produced by gas fired plants, with the remaining 20 percent shared among coal and hydro.
The Benban in Egypt is said to be home to the largest solar park in Africa. It spans 37 kilometres and has a total generation capacity of around 1.8 gigawatts, which is enough to power hundreds of thousands of homes.
In West Africa, Ghana’s £248 million Nzema project is the largest solar energy plant. The 155 megawatt plant is projected to power more than 100,000 homes and increase Ghana’s electricity generation capacity by 6 percent.
Then, in South Africa, a total of 64 projects worth $14 billion were on ground as far back as 2015, with a capacity to generate 3,922 megawatts of renewable energy.
However, since 2012, South Africa has ranked among the top 10 countries globally in independent power project (IPP) investments, signing up in less than three years, more IPPs than the rest of Africa combined in the past 20 years.
This is based on reports from the Public Private Infrastructure Advisory Facility (PPIAF), a multi-donor trust fund that provides technical assistance to facilitate investments into infrastructural development in developing countries.
Apart from environmental risk reduction, renewable energy development comes with multiple economic benefits, as the low carbon economy employs over 500,000 people in France, and in the UK, where it contributes more to GDP than the automotive industry.
The UK’s Renewable Obligation (RO) policy makes it mandatory for electricity suppliers to procure a certain amount of electricity from renewable sources.
In Germany, where renewable energy producers statutorily receive payments for any unit of electricity exported to the grid, about 12.8 gigawatts (12,800mw) of solar capacity was installed only between 2012 and 2014.
The United States government also made a number of policies to support investment in the sector, with 1,133 megawatts of solar photovoltaics (PV) installed in the second quarter of 2014 alone, said GTM Research and the Solar Energy Industries Associations (SEIA). Between 2012 and 2014, the grid-connected utility segment in the country quadrupled from 1,784 megawatts to 7,308 megawatts.
Surprisingly, these countries do not even enjoy the high intensity of solar radiation that is found in Nigeria. The solar radiation in some of these countries is considered acutely sub-optimal.