The Nigerian government has been tasked with using regulations and incentives to stimulate innovation in renewable energy technology in order to diversify its energy sources, as the country has an unmet energy demand of roughly 20,000 megawatts (MW).
The company observes that although grid-connected electricity supply continues to be the most affordable source of energy in Nigeria; it is not always economically advantageous to build gas pipelines and/or transmission cables to some isolated settlements with low electricity demand.
With 23 thermal plants accounting for 76% of the country’s installed generating capacity, gas dominates Nigeria’s present energy mix. However, due to price limitations, regulatory barriers, and pipeline vandalism, the domestic gas market has underinvested for years, raising concerns about the commercial feasibility of gas delivery to the power sector.
The International Energy Agency (IEA) estimates that by 2026, renewable energy sources will be responsible for roughly 95% of the growth in the world’s power capacity, with solar photovoltaics (PV) accounting for more than half of that growth.
In the coming years, the world’s ability to produce electricity from renewable sources like solar cells, wind turbines, and other sources will greatly increase. Renewable energy is expected to receive $472 billion in investment in 2022, a 44% increase from the $326 billion invested in the sector in 2017.
With over 47% of Nigerians lacking access to grid electricity and those who do endure frequent power outages, the problems facing the country’s power sector are widely known, extensive, and cut across the whole value chain of the sector.
Agusto & Co also cautioned that although Nigeria has committed to reducing its greenhouse gas emissions by 20% between now and 2030 and to achieve net-zero emissions by 2060, those goals are rather lofty given that the nation still struggles with insufficient national grid electricity supply, with unmet demand estimated to be around 20,000 megawatts (MW).
Despite these obstacles, Agusto noted that potential exists because the nation has a significant solar energy potential and has access to abundant and diverse natural resources that allow it to produce significant amounts of clean and renewable energy (particularly solar energy). This is because the nation is situated within a high sunshine belt.
Agusto & Co. also thinks that renewable energy sources need to be added to the current energy mix.
The largest economy in Africa’s largest country receives 6.25 hours of sunshine per day on average each year, according to the Nigerian Meteorological Agency (NIMET). The Northern part of Nigeria experiences daily sun radiation on average of roughly 25.2MJ/m2 (megajoule/square metre), with coastal areas receiving 12.6MJ/m2 on average. Due to the vast amount of dry land in Northern Nigeria, wind speeds between 2.5 m/s and 6.5 m/s present opportunities for the production of wind power. Meanwhile, biomass remains a potential and untapped source of bio-energy given the amount of waste produced.
Instead of running several kilometers of transmission wires, which are vulnerable to vandalism, renewable energy facilities can be built in remote regions. Small-scale renewable initiatives for solitary houses are also made possible by the national grid’s inadequate and unpredictable electricity delivery.