Nigeria’s Power Crisis: Expert calls for renewable energy investment

Tosin Clegg

In the heart of West Africa, Nigeria stands as a giant with feet of clay. As Africa’s largest economy and most populous nation, Nigeria’s potential for growth and development is immense. However, a persistent and crippling challenge continues to hold the country back: its unreliable power supply.

For decades, Nigerians have grappled with an electricity grid that is as unpredictable as it is insufficient, leaving millions in darkness and hampering economic progress. This longstanding issue calls for a paradigm shift, with renewable energy emerging as a beacon of hope for Nigeria’s power sector.

A Renewable energy specialist, Ayomide Ayoola, spoke about the recent flag-off for the construction of an 11 MW Independent Power Plant(IPP), which is said to be completed by the second quarter of 2024. The project was flagged off on December 12, 2021 . Ayoola in his remark lauded the effort of the Governor, Engr Seyi Makinde,” this is a great step in the right direction into power diversification by state governments. It is a welcome development and we expect more to help bridge the gap of areas with no access to the grid”

He also said as of 2024, the country’s power generation capacity hovers around 12,500 megawatts (MW), a figure that falls drastically short of the estimated 40,000 MW required to meet the nation’s needs. Even more concerning is that only about 3,500 to 5,000 MW of this capacity is typically available for transmission to end-users due to gas supply issues, water shortages, and an aging infrastructure. The Nigerian Electricity Regulatory Commission (NERC) reports that the national grid experiences an average of 32 system collapses annually, plunging large swathes of the country into darkness. These frequent outages have become so commonplace that they are euphemistically referred to as “light off” periods by locals, who have grown accustomed to living with intermittent power supply.

The economic impact of this power crisis has been staggering. The World Bank estimates that power shortages cost Nigeria about $28 billion annually, equivalent to 2% of its GDP. Large and small businesses are forced to rely heavily on diesel generators, significantly increasing their operational costs and reducing competitiveness. A survey by the Manufacturers Association of Nigeria (MAN) revealed that energy-related expenses account for about 40% of production costs for the average Nigerian manufacturer, compared to less than 10% in most developed countries.

Ayoola asserted that amidst this bleak scenario, renewable energy emerges as a promising solution to Nigeria’s power woes and that the country is blessed with abundant renewable resources, including solar, wind, hydro, and biomass. According to the International Renewable Energy Agency (IRENA), Nigeria has the potential to generate over 68,000 MW from renewable sources alone, more than five times its current total installed capacity.
“With an average of 6.5 hours of sunshine per day and solar irradiation levels ranging from 3.5 to 7.0 kWh/m²/day across the country, Nigeria’s potential for solar power generation is vast. The Nigerian Electricity Regulatory Commission estimates that the country could generate up to 427,000 MW from solar energy alone”, he emphasized.

Ayoola called for more investment into the renewable energy sector in Nigeria as it presents a wealth of opportunities for both local and international investors.

The project shows the Oyo Government Initiatives and Policy Framework in energy generation for sustainable and rapid development. Recognizing the potential of renewable energy, the Nigerian government will create an enabling environment for the economy’s growth, consequently affecting the GDP.