In Nigeria the potential for leapfrogging is very promising. Key drivers that can enable the process are the large renewable resources endowment, the need to reduce dependency on imported fossil fuels and the objective to reach universal electricity access. Despite being the largest economy and first crude oil producer on the continent, Nigeria has one of the lowest power consumption per capita. A core obstacle to electricity access is the unreliability of the supply system, which has contributed to the development of a large oil-fired self-generation subsystem.

  • 201 million

    the population in 2019

  • 1.42 million barrels per day

    was the oil production in 2020

  • 200 kWh

    the annual consumptions of electricity per capita

  • 90%

    the electrification target by 2030

Despite positive efforts in the right direction, Nigeria still has to address significative lack of implementation and inconsistencies in the regulatory framework to accelerate its energy leapfrogging.

from fossil fuels to RES

Despite the large domestic oil production, Nigeria imports 90% of the consumed fuels due to insufficient refining capacity, leading to high energy-import bills and expenditure on subsidies. Oil and gas currently dominate power generation, largely due to the self-generation subsystem, and are followed by hydropower. The exploitation of renewables represents a priority to reduce dependency and provide a secure basis to Nigeria’s growing economy and energy needs. The potential for solar-power and hydropower are high, while for wind power it is limited. From a policy perspective, Nigeria has a strong commitment to expand renewables, that is reflected in the 2030 target to produce over 30% of grid-connected energy with RES.

  • 427 GW

    the potential for solar photovoltaic

  • 14,75 GW

    the potential for hydropower

  • 30 GW

    the target for new generation capacity by 2030

from centralised to decentralised-generation

In Nigeria, approximately 80 million people lack electricity access and even in areas reached by the grid the supply is often unstable. This is mostly due to outdated infrastructure, poor maintenance and transmission constraints. As a result, oil-fired self-generation is largely widespread and estimated to amount at 42GW capacity. This subsystem has a vast potential to be substituted by renewables off-grid solutions: in Nigeria the mini-grid market is deemed to have the potential to scale to over 100,000 sites by 2023. The Government showed commitment to support the RES off-grid sector through several policies and set a target of 40% rural population served with RES off-grid by 2040.

  • 56.5%

    the population with access to power in 2018

  • 12.9 GW

    the installed generation capacity

  • 14%

    the population share mini-grids could reach by 2023

from classical market to a novel business approach

In the mid-2000s Nigeria started the transition from a vertically integrated and publicly owned electricity network to an unbundled and largely privatized one. The privatization process was concluded in 2013 and determined a structure based on a single, government-owned entity, the Nigerian Bulk Electricity Trading (NBET). Several incentives have been introduced to stimulate private investments in the RES sector leading to early market growth. However, overlapping mandates and lack of interrelation between ministries and agencies on the numerous RES regulations have led to a widespread lack of effective implementation, which represents a major barrier to further market development.

  • 2013 the year the privatisation of the energy sector concluded

  • 2016 the year the first Power Purchase Agreements for solar plants were signed

  • 2015 the year the never implemented feed-in tariff Regulation was adopted

from analogic to digitalised systems

In Nigeria, the use of mobile money is still very limited with negative effects on the expansion of renewables off-grid technologies. The lack of a robust payment-collection system for off-grid services is generating a perception of high risk in the market, discouraging private investments. Changing the current regulations to increase the uptake of mobile money is an essential element to foster the growth of off-grid RES-based solutions in the country. Vast mobile and internet penetration make Nigeria well positioned for the digitalization of the energy sector, beyond pay-as-you-go systems. However, Nigeria is lagging behind in broadband speed, issue that has been addressed with a plan to achieve 90% population 4G/5G population coverage by 2025.

  • 88%

    The mobile penetration

  • 42%

    The internet penetration

  • 5.6%

    The population using mobile money