Nigeria African economic powerhouse faces significant challenges and great possibilities for energy

Nigeria, an African economic powerhouse, faces significant energy challenges and great possibilities. The country's impressive human and natural resources can be the basis for a growing and highly diversified energy sector, one increasingly able to meet its own needs.  

Nigeria today sees expanding markets for its natural gas, a nascent yet growing field for renewables, and a promising opening to new green fuels. These resources, combined with ongoing reform in the power sector, offer vast potential to meet the needs of Nigeria's young and growing population while raising its capacity to supply international energy markets.

The challenges in the country’s power sector are clear. Nigeria is a country of more than 200 million people, about 40% of whom (some 80-90 million people) live in homes without electricity. Millions more have just intermittent access. Installed power generation capacity is approximately 13 GW, but actual available capacity is just (approx.) 5 GW. Lack of access to electricity is limiting Nigeria’s economic development and holding back the potential of its people.

Despite significant and ongoing reforms in the power sector, problems persist in transmission and distribution. As electricity supply through the country’s grid is relatively scarce and unreliable, many families and businesses rely on diesel generators for backup energy supply. Similarly, many households lack access to gas or electric cooking technology, putting pressure on wood resources. These deficiencies exasperate the climate threat facing Nigeria and the world.

Nigeria is Africa’s largest producer and exporter of oil, which accounts for much of the government’s revenues and most of its foreign exchange earnings. And the country enjoys enormous gas reserves, some 200 trillion cubic feet, which could go far to fuel its power sector. Yet infrastructure and refining capacity are lacking to allow the country to deploy these resources as low-cost domestic energy.  

Nigeria’s electricity generation is largely reliant on natural gas. The country must import large amounts for power generation, as well as gas products such as cooking fuel. Yet power plants are often idled for lack of fuel supply. The government is incentivizing gas pipeline development while investing in power transmission and distribution infrastructure to raise grid capacity.

Renewable power does make an important contribution in the power sector, mostly in the form of hydropower. However, solar PV plays a small but growing role, both utility-scale and distributed. Last year the federal government launched the Solar Power Naija (SPN) program to expand energy access to 5 million rural households, through home hook-ups or connections to mini grids.

Solar panels on rooftops are helpful and needed, but they will not be sufficient to power the country’s economic and industrial development at large scale. Ongoing upgrades to Nigeria’s power generation, transmission and distribution capacities will be required. The country will need to develop its natural gas resources for domestic power production even while it expands renewable power.

Meeting these complex challenges requires expert input, which will be forthcoming at this month’s Nigeria Energy 2022 in Lagos (20-22 September). Leaders in Nigeria’s energy sector, advocates, investors, and other African and international energy experts will convene, opening diverse perspectives on the key questions. They will share a stage to form partnerships and develop solutions to meet Nigeria’s energy challenges.

Participants will bring focus on key questions:

• what are the top priority areas and actions that the industry should focus on to bridge the energy access gap?
• what will be required to propel the Nigerian renewables market forward?
• what is required to advance the energy transition agenda, to build decarbonization solutions that meet Nigeria’s needs?
• what key roles will digital transformation have in the energy sector?

Nigeria Energy attendees will find opportunity to engage with the highest level of decision makers and international partners. They will meet key stakeholders from Nigeria’s energy sector, from government ministries and regulators, to gas companies supplying fuel to grid-connected plants, to independent power producers, distribution companies, and the bodies mandated to facilitate the development of renewable energy and off-grid solutions.

Nigeria Energy 2022 will provide a blueprint for Nigeria’s power sector in the coming years, opening pathways to improving access to electricity, driving economic growth and creating jobs for Nigerians.

Energy & Utilities has recent news from Nigeria’s energy sector on its home page, and insights from Nigeria Energy exhibition director Ade Yesufu.