Renewable Energy Potential in Nigeria: Low-Carbon Approaches To Tackling Nigeria's Energy Poverty

Renewable Energy
Potential in Nigeria
Low-carbon approaches to tackling Nigeria’s energy poverty
First published by the International Institute for Environment and Development 2012
Author
Chris Newsom, Stakeholder Democracy Network
The SUNGAS project

The SUNGAS project aims to catalyse development of Nigeria’s natural gas and renewable energy
markets through innovation, demonstration, policy dialogue and advocacy. Small demonstration
projects for both renewables and gas-to-power will show that community-based energy facilities are
technically viable, financially sustainable, and can ensure better access to modern energy services for
rural communities. The project is funded by the European Union and is being implemented by the
International Institute for Environment and Development (IIED), the Niger Delta Wetlands Centre
(NDWC) and the Living Earth Foundation (LEF).
Disclaimer: This document has been produced with the financial assistance of the European Union. The
contents of the publication are the sole responsibility of the SUNGAS project partners and can in no way
be taken to reflect the views of the European Union.
The European Union is made up of 28 Member States who have decided to gradually link together their
know-how, resources and destinies. Together, during a period of enlargement of 50 years, they have
built a zone of stability, democracy and sustainable development whilst maintaining cultural diversity,
tolerance and individual freedoms.
The European Union is committed to sharing its achievements and its values with countries and peoples
beyond its borders.
For further information on the work of the European Union see http://ec.europa.eu/world/.
For further information on the SUNGAS project please contact:
Emma Wilson, International Institute for Environment and Development (IIED),

80–86 Gray’s Inn Road, London WC1X 8NH, UK.
Tel: +44 (0)20 3463 7399; Fax: +44 (0)20 3514 9055
E-mail: emma.wilson@iied.org
Cover photo: Solar water pump, NDWC
2 Renewable Energy Potential in Nigeria

executive summary
Executive summary
Renewable energy has considerable potential in The cost per unit of power of renewable energy ($0.26–
Nigeria, and could bridge the major energy gaps in 0.50/kWh) remains markedly higher than that of grid
rural areas, particularly northern Nigeria. The scale of electricity ($0.10–0.15/kWh), which is the main reason
opportunities is only just becoming apparent as new for subsidies and feed-in tariffs in most countries.
grid technologies such as concentrated solar power are Much of the planning and incentives overseas are based
emerging as in competitors with conventional power around climate change commitments and trends where
generation. the rapidly falling cost of renewable energy will make
it competitive without subsidies within a decade. In
Changes in technology also mean that solar power, with Nigeria, immediate renewable-energy competitiveness
the correct financing, could bring transformational is more likely because reliance on generators and
change to household energy needs. Robust small kerosene puts the real cost of energy needs in many
lighting products starting at under $30 mean that areas at over $0.50/kWh.
low-income households can benefit, although financing
even modest capital costs remains an issue at all levels. Finance for renewable energy remains a huge issue
Progress in lighting indicates advances that can be because the majority of costs for years of use are
made in addressing other needs, given continuing incurred immediately at installation. The high cost of
improvements in efficiency and affordability. loans in Nigeria, with interest rates over 20 per cent,
is an immediate disincentive to energy investments
The scale of renewable-energy potential is much which would recoup costs over even relatively short
larger than the public or policymakers realise. Recent periods (perhaps 1–3 years). This is a concern at all
studies credibly put concentrated solar thermal power levels—for poor families seeking to raise $30 for basic
potential in Nigeria at over 427,000MW. Present levels lighting, or for households and businesses which would
of power generation of around 5000MW meet only need to invest many thousands of dollars.
a fraction of demand, and renewable energy could
play an escalating role. Large-scale renewable power Major improvements in energy efficiency and the
generation could prove transformational, but small cost of renewable-energy products have meant that
consumer- and household-level systems could offer the amount of capital needed for key applications has
energy independence for the majority with presently declined dramatically. Adapting renewable energy
limited or zero access to reliable electricity. for water boreholes, lighting, refrigeration of medical
supplies, and IT uses for rural areas has rapidly become
The experience of the small number of renewable more affordable. There is still a need for capital
energy developers in Nigeria over the last decade is investment but costs have often fallen by more than 75
crucial to the emergence of viable markets. For the per cent in the last five years. Key steps are still needed
industry to grow, both practitioners and government to link capital, market development and reliability but
need to absorb lessons on correct adaption, servicing, growth overseas demonstrates that these are steps
installation and efficiency in new technologies. Without which could bring about swift changes.
incorporating this experience, there is a strong risk of
continuing the underperformance which has resulted Wide-ranging changes are needed for Nigeria to realise
in near market failure in recent years. Considerable its renewable-energy potential. These changes require
education of consumers and policymakers will also application together, and with adequate resources. The
be required for existing negative perceptions to be following key recommendations reflect the critical
converted into sound decisions on energy choices. need for a holistic approach to change.
3
Key recommendations
Develop integrated renewable energy planning
and investment
The federal government needs to reinforce its
existing initiatives by developing both an integrated
renewable-energy plan and a systematic major increase
in investment in research, market development and
regulation of renewable energy.
Provide incentives for renewable energy uptake

Government should also consider incentives, probably
through a feed-in tariff, for at least one major pilot of
solar thermal power generation in northern Nigeria.
Ensure sufficient and affordable capital

financing
Low-interest capital financing for renewable energy
needs to be systematically expanded, with increases in
available capital matching growth in the industry.
Improve public understanding of renewable

energy
Renewable-industry actors and government need to
make a significant investment in public education
that will improve consumer and policy choices and
overcome existing prejudices against the industry.
Cultivate collaboration between renewable

energy developers and policymakers
Policymakers and renewable-energy developers need
to work closely together to develop best practice
options for services in rural areas—particularly for
education, health centres and water provision.
Educate on energy use and efficiency

Energy use, particularly energy efficiency and
renewable energy, needs to be a core part of the
education system as swiftly as possible, with a view to
changing public behaviour and expanding participation
in a growing renewable-energy sector.

contents
Contents
Page
Executive summary��3
Key recommendations��4
1 Introduction: potential for sustainable energy development��7
2 Early days: niche applications for rural Nigeria��8

2.1 Solar water pumping: a model of simplicity�� 8
2.2 Small-scale solar lighting products�� 9
2.3 Refrigeration (vaccines and medical stores)�� 10
2.4 Off-grid IT centres�� 11
2.5 Lessons from early pilots��12
3 A bright future for renewable energy in Nigeria?��13

3.1 Technology for consumer-level products��13
3.2 Large-scale generation potential of ‘solar thermal‘��14
3.3 Other renewable energy sources��15
3.4 Exploring new territory��16
4 Renewable energy, households and efficiency��17

4.1 Energy needs and aspirations��17
4.2 Not a ‘single market‘��18
4.3 Household choices, energy efficiency and renewables��19
4.4 Consumer education, choices and supply chains��19
5 A broken market? ��21

5.1 Patronage contracting��21
5.2 Difficulties with solar street lighting�� 22
5.3 Variable quality of installers and vendors�� 22
5.4 Lessons and market therapy �� 23
6 Financing renewable energy in Nigeria�� 24

6.1 ‘Right-sizing’ capital costs�� 24
6.2 The reducing core costs of solar PV�� 24
6.3 Installation costs�� 25
6.4 The competition: generators and kerosene�� 26
6.5 Feed-in tariffs�� 26
6.6 Access to capital�� 27
7 Some key messages and recommendations �� 29

7.1 Time for a shift in energy policy�� 29
7.2 Understanding and educating the market��30
7.3 Cultivating developers, educators and partners��30
7.4 Matching capital growth to emerging capacity��30
7.5 Incentives for efficiency and demand reduction��30
7.6 Supply chains, customs and regulation��31
7.7 Government as a promoter of renewable energy��31
7.8 Key recommendations�� 33
5
Figures
2.1: Basic components of a DC solar water-pumping system �� 8
2.2: Examples of small-scale solar lighting�� 9
2.3: The Aleutia computer classroom system��12
3.1: Low-cost solar-powered lighting��13
3.2: Global opportunities for solar thermal power plants��14
4.1: Estimated electricity demand in Nigeria��17
5.1: Solar water project, Delta State, incorrectly installed��21
6.1: Projected costs of solar PV versus conventional electricity, 2005–2031�� 24
6.2: Projected costs of different energy sources, 2010–2035�� 25
Tables
4.1: Changing energy efficiency for household products in Nigeria��19
6.1: Challenges and responses on the costs of renewable energy in Nigeria�� 27

1 introduction
1 Introduction: potential
for sustainable energy
development
Popular perception of renewable energy in Nigeria faithfully implemented have delivered far greater
tends to focus on solar and occasionally wind power. stability in service than comparable interventions.
Renewables have a relatively short history in Nigeria, They also offer the most elusive of gains in rural
especially in the public view. However, renewable Nigeria—plausible long-term sustainability. In the
energy from hydropower has actually been at the areas of vaccine storage, rural water supply and lighting
core of Nigeria’s grid electricity production since for those on the lowest incomes, there are global
the 1960s. Until very recently, the Kanji and Jebba innovations and improvements in affordability at a
Dams (1300MW) accounted for around 50 per cent remarkable pace that can be adapted for Nigeria.
of Nigeria’s stable power sources, only recently being
overtaken by gas power stations whose role continues Renewable energy should never be considered in
to be constrained by the poor state of the national grid isolation. Progress in the field goes hand in hand with
and unstable gas supplies. improved energy efficiency, which has been vital in
driving down costs and making new applications
Power supplies are very limited in Nigeria: electricity feasible. Compared with the existing costs of power in
from the grid is available to only around 50 per cent of Nigeria (mainly generators), there is a very strong case
the population, and even then is erratic. This has been for quite radical interventions. This is also in contrast
at the core of early renewable-energy development with other developing countries which have a more
in Nigeria. It has provided a strong incentive to find stable grid electricity supply.
something more stable and that does not result in the
constant drain of cash associated with the high costs This paper seeks mainly to explore some familiar but
of power from the ‘stand-by‘ generators which have poorly understood territory—primarily solar power and
become the main source of power for many basic rural energy efficiency, with their implications and potential
services. for Nigeria. It links to work on the power sector, which
highlights some of the weaknesses for proposed rapid
Wind and solar power in Nigeria are poorly understood privatisation, with all the associated risks for those in
by the public and even policymakers. The successes rural areas and on low incomes.
are much less well known than the shortcomings,
which have been all too visible with failed solar Coverage of wind, hydro, and biomass power in this
street-light schemes dotted across Nigeria‘s major paper is very limited—not because they do not share
cities. In the public mind, solar power installations potential but because further work is needed before
have largely joined the many failed projects initiated they can be usefully assessed for Nigeria. The short
by government—testimonies to poorly installed discussion of energy policy and the recent scenario
technology associated with patronage and corruption. planning by a team working for the World Bank
highlights the (perhaps surprising to many) strong
Yet the successes for renewable energy in Nigeria potential for low-carbon energy growth in Nigeria.
should give pause to its critics. The small but growing This is based on the potential for broad development of
number of solar energy projects that have been renewable energy, particularly in northern Nigeria.
7
2 Early days: niche
applications for rural Nigeria
There have been various explorations of renewable The design of the NDWC borehole water supplies
energy in Nigeria since the 1990s, with almost all the relies on simplicity at all stages. Many solar systems
early experience being in photovoltaic (PV) panel solar use on a combination of panels, charge controllers,
power. The four applications of solar power featured batteries and inverters to capture, store and then use
in this section are included because as models they solar-powered electricity. Each of the key components
have provided key lessons showing how renewable has some requirements for maintenance and
technologies might best be adapted to local needs. vulnerability to failure. This is a significant challenge
in an environment where planning and resources for
In each case, the models developed are the result maintenance can be very poor, and knowledge of new
of years of iterative improvements by individual technologies such as solar power is limited.
organisations or partnerships drawing on both
experience and new technology. Only a limited part The NDWC response was to balance competing issues
of the evolution can be properly captured here, given to arrive at a design that was as simple and as robust
limited space, and it is important to note the role of as possible. By opting for a system that could pump
innovators—both socially progressive companies sufficient drinking water during the daytime, they
and NGOs—that have made persistent efforts to were able to opt for a DC (direct current) system that
demonstrate these new technologies in real-life rural eliminated the need for both batteries and inverters.
environments. This immediately removed two components that were
most expensive and most vulnerable to failure. As a
compensating measure, the system pays attention to
2.1 Solar water pumping: a model of
likely overall demand for water, with tank and daytime
simplicity
pumping and storage capacity adjusted accordingly.
The provision of drinkable water has been a
longstanding problem in Nigeria, with reliance in
many regions on water pumped from boreholes that
are privately owned, or sponsored or developed by
government. In all of these cases, there has been
perpetual instability because of the cost of operating
boreholes when grid electricity is either unreliable or
entirely absent. Boreholes in rural areas are normally
reliant on generators, which are expensive to maintain
and operate. Failures of water supply within relatively
short time periods are very widespread in many parts of
the country, particularly the Niger Delta.
The Niger Delta Wetlands Centre (NDWC) has been

experimenting with solar-powered water boreholes
since the mid-1990s. Part of the motivation is to mount
a direct challenge to the region’s reputation for being
‘too cloudy’ for effective use of solar power. The Centre
has been able to demonstrate model water boreholes
developed around several key principles and provide Figure 2.1: Basic components of a DC
direct evidence against the “too cloudy” hypothesis. solar water-pumping system
Source: la.solarworld.com

2 Early days: niche applications for rural Nigeria
There are a number of strengths of the system, which of system size to needs, and the relatively low cost of
are now well proven: regional technical support (see also Section 2.2).
• Investment in quality components is rewarded with

extraordinary durability. 2.2 Small-scale solar lighting products
As with other solar applications, there have been
• Maintenance costs are low enough to be viable in
experiments for some years in solar lighting in Nigeria,
rural areas.
but these have met with modest success at best. The
• There is a continuous fall in the costs of major aim of the few projects seen by the author has been
components, primarily solar panels. to provide lighting alternatives to kerosene lanterns,
and small generators for households on relatively low
• Efficiency of both pumps and panels continues to incomes.
improve.
However there are also outstanding issues which have The early systems relied on DC lighting with relatively
been highlighted: very small solar panels supported by batteries which
could also provide power to small appliances such as
• Low maintenance is not maintenance free—some radios. They appear to have suffered from the full range
trained support is still essential. of challenges confronting early solar pilots in Nigeria:
limited beneficiary buy-in, difficulties in maintenance
• Initial capital costs are still significantly higher than and supply chains, relatively high cost in the short run,
generator/grid systems. and questions about the aspirations of beneficiaries
• Capacity needs matching to demand management— with a range of needs. Nigeria was never really exposed
systems will pump only within their storage capacity to the early solar lanterns that started at $100 upwards,
for a 24-hour period and will not ‘top up’ overnight. with performance markedly below that of products
available today.
Present position
In the past three years, there has been a dramatic
The potential of this technology is well proven in one
increase in lighting options, affordability and
of the least sunny parts of Nigeria but several areas
commitment by developers focusing on other parts
need addressing if the technology is to reach its full
of Africa, with some laudable innovation also within
potential. Many of these have to do with financing,
Nigeria. This has been based on the development of
which is discussed in Section 6 of this paper, while
affordable and robust LED lighting attachments, better
eliminating sub-standard installations is considered in
battery options, along with dramatic falls in the cost of
Section 5.
solar-panel components. New products are compact,
with battery and LED life spans measured in years
After a period that included sponsoring many
(most batteries now being 3–5-year lithium variations),
disastrous installations, the Niger Delta Development
and small portable solar panels smaller than a shoebox.
Commission appears to have adopted the simplified
design first promoted in the region by NDWC as
standard practice in rural areas. However, many other
government agencies and departments continue to
fund either generator-based schemes (despite their
consistently high failure rate) or very poorly designed
solar systems. There is also very limited exploration
of ‘right-sizing’ drinking-water supply designs to
community needs, with a tendency towards single large
hubs regardless of practical need.
With shrinking payback periods (see Section 6.4),

Sun King Power Pack Junior
in which savings on fuel costs fully recoup the extra
by Greenlight Planet by Barefoot
capital cost between 18 months and 3 years, it seems
obvious that the technology should become standard
Figure 2.2: Examples of small-scale solar
for ‘off-grid’ or poorly supported locations across
lighting
Nigeria. Such a decision would also justify the modest
investments needed in research to improve the match
9
The new generation of products presently entering offer transformational changes—then the limiting
the market is swiftly creating a full range of choices factors again become finance (see Section 6) and the
for households and small businesses—from sturdy development of a small consumer industry. The radical
kerosene lamp replacements where price is kept to simplification and reduction in cost of solar lighting
a minimum (as low as $15 retail) to an upper end products also means that something new could be
that may reach $500 for a system capable of stronger encouraged to develop in Nigeria—modular mixing of
lighting across several rooms, also powering a laptop small solar products that can be matched and upgraded
and mobile phones. according to need, budget and the changing situation
of households. Crucially, small solar products have
There is improving targeting of design to specific reached a point where they represent modest but
potential needs. One design in conjunction with the durable assets that are relatively portable and have a
Federal Ministry for the Environment is targeted very significant lifespan.
specifically at small hairdressing salons, which have
an obvious modest power need where designs can
compete with a small generator. The World Bank 2.3 Refrigeration (vaccines and medical
‘Lighting Africa’ programme supporting the emergence stores)
of this new generation of products has tried to address
Early solar-power applications in refrigeration serve
issues of quality by having a robust quality assurance
a vital niche health need, as with solar-powered water
programme which can give consumers a high degree of
pumps. However, both applications also present
confidence about reliability. The technology changes
affordable household options as a key aspiration for an
and their potential are discussed in more depth in
overwhelming majority of Nigerians.
Section 3.1 of this report.
For some years in Nigeria, several companies have

Present position been installing solar-powered vaccine fridges able
In Nigeria, solar lighting for households has shifted to maintain a stable service in rural areas where the
from a marginal experiment with serious cost issues resources for fuel and maintenance are predictably
to one of significant potential. Collaborations and very weak. KXN Nigeria won an Ashden innovation
innovation driven by international initiatives have award in 2008 for its installation of solar-powered
resulted in exponential growth for small companies fridges across central and northern Nigeria.
operating in other parts of Africa, and a limited but
growing appreciation of the potential market and Since starting in 2002, the company reports installing
benefits in Nigeria. 767 fridge systems in health centres central to the
campaign to eliminate polio. The fridges were compact
The most obvious potential beneficiaries of this and even then consumed only 60 watts of electricity
new generation of products in Nigeria are the large thanks to insulation upgrades. In 2009, KXN estimated
proportion of the 70 million Nigerians estimated costs per system (including solar and fridge) of
to have no access to grid electricity. The prospect around $11,000. This included costs for a specialist
of reliable night-time lighting for both households company operating in a remote area. An equivalent
and small services, without a constant cash drain, is rural generator-based system would have cost at least
potentially transformational for many lives. Yet the $2500–3000, although fuel costs over time would
new products are making a modest start in Nigeria. be prohibitive, to ensure the constant temperatures
needed for storage. The cost of system failure (or
Even though household-level products have improved simply running out of fuel), of up to $5400 for a full
radically and come dramatically down in cost, they still batch of medicine stored in a single fridge, indicates the
require marketing, supply chains, product support and powerful incentives for stable power supply.
matching with both the means and needs of consumers.
Other countries have seen a number of potential Interviews with other consultants highlighted
methods applied to addressing these challenges, from successful trials of regional maintenance contracts
micro-finance to hire purchase. These solutions are —where a service provider covered a zone of several
not impossible in Nigeria but have often proved more states for any fault that arose. This was combined with
difficult than in other low-income countries. training on-site staff in coping with the most basic
faults and at the time was deemed highly successful.
Assuming that the present assessments of these The workload on the service providers was modest
products is correct—that over their lifespan they because systems proved highly reliable and basic

2 Early days: niche applications for rural Nigeria
problems were amenable to solutions provided through New technology and basic improvements well away
a remote help desk. Yet cost was obviously a factor from the solar field—more efficient commercially
limiting this technology to this specialist application, available fridges and freezers—suggest another basic
and a full system of panels, batteries and inverters was rethink. Just a few years ago, refrigeration for medium-
required. income households was regarded as prohibitively
expensive. Now that readily available freezers are
More recently a UK company, Surechill, has offering a basic ‘stay cold’ provision of several days, the
demonstrated dramatic gains in combining further mathematics of what small home-solar systems can do
improvements in design and efficiency. It is marketing needs re-examining and explaining to the public. The
a fridge which can withstand 43°C for 7 seven days gains made by companies pushing the boundaries of
without any source of power, and requires only a 350W innovative design suggest that even more significant
solar panel array ( just over two standard panels) for gains should be available within the relatively short
completely off-grid operation. As with the innovations timeframes that characterise advancements in
in other areas, the efficiency gains here mean that renewable technologies.
the need for battery and inverter components is also
radically reduced. Consequently, this has produced a
2.4 Off-grid IT centres
radical drop in overall cost. Even at introductory prices,
Surechill solar units appear set to be about one-third of The IT sector provides striking examples of the
the cost of previously installed systems. improvement in options for systems supported by
renewable energy. There has been a longstanding desire
As with the example of IT centres (Section 2.4), the to improve access to information technology and the
efficiency gains in solar-powered refrigeration do raise internet for Nigerians, particularly for those on modest
the question of whether many of the benefits could incomes and living in rural areas. The social inclusion,
be achieved with a smaller petrol or diesel generator. education, access to information and governance gains
If a good, well-maintained generator was part of the that should result are all seen as significant in reducing
system, the short-term costs would be lower but the inequality gaps in Nigeria.
capital investment required for a solar alternative
has also dropped to a far less intimidating level. Solar However, the problems with maintaining IT centres,
options would still cost more initially, but would win particularly in rural areas, have been very similar to
over time compared to a generator. A solar system those of other small rural infrastructure projects, only
would require markedly smaller investments in worsened by the sensitive nature of the equipment.
either case compared to a few years previously, but The cost of power from generators, maintenance of
the stability and lack of daily inputs required for a equipment, and damage from power spikes, and general
good-quality system remains a winning factor for solar wear and tear, have led to a very high failure rate within
power. a relatively short period. Yet, when an NGO running the
STAND governance project in the Niger Delta sought
an off-grid solar option using conventional personal
Present situation
computers in 2006, the proposed cost was prohibitive—
Solar power continues to be a major factor in the
in the region of $120,000 for powering a relatively small
provision of stable fridges and supply chains for
centre.
vaccines. Yet interviews with both solar practitioners
and health organisations highlight lessons that appear
Just three years later, the successor project manager,
to have been lost over time. There is a significant failure
SDN, who inherited the same project, was able to
rate of fridge systems, and persistent concerns around
opt for a pilot based on newly developed low-energy
maintenance.
computers specifically designed for difficult rural
conditions. Aleutia PC systems have reduced the
Some of the issues are reminders that solar systems are
energy consumption of a base unit for a PC to around
not the only components requiring maintenance—with
9W (from around 200–300W in 2006) while flat-screen
basic fridge maintenance and replacement being
monitors have more than halved energy consumption
an obvious issue. Yet there are also cases of solar
for screens. Without even the advantage of recent falls
components failing for the most mundane of reasons
in solar-panel prices, costs for a complete centre fell by
(such as dust or leaves on panels), and earlier regional
over 75 per cent to under $25,000 while the ruggedness
support systems have not been maintained. There is an
of the computers allowed a five-year warranty.
obvious need to consolidate lessons from earlier years
and to take advantage of new technology.
11
Figure 2.3: The Aleutia computer classroom system
Note: Power use for 6 desktops is 180W (approximately the power use of a single conventional PC).
Source: presentation by Jeremy Weate, Aleutia Nigeria (for more details, see http://www.aleutia.com/solar-lab).
and tablets, the match on efficiency is straightforward

Present situation
(with high-end products already available overseas).
There have been several IT centres using the same
In Nigeria, there is a need for further refinement of the
technology in different parts of the Niger Delta and
mix of durable computing, affordable batteries, and
a few pilots in other parts of the country. Capital and
carefully matched solar power.
energy demands of systems have fallen further, making
it feasible to install stand-alone systems based around a
single modest solar panel. Yet, as in other areas of solar 2.5 Lessons from early pilots
technology, wider uptake has been limited.
All of the pilots and early experiences in Nigeria share
characteristics of obvious technical capacity and
The potential of solar combinations in IT seems
unfulfilled potential. A significant part of this obviously
even more clear-cut than in other areas. Continuing
has to do with finance and market development, yet it
advances in the efficiency of computing mean that
is worth reiterating the common factors linking these
carefully designed IT centres and classrooms could
applications.
run on very modest solar systems. Careful selection of
hardware could also mean extremely low maintenance
• Refined design, with emphasis on simplified
and would be likely to reduce the components needed.
combinations of well-protected components that
In schools, there is the potential to make this part of an
wherever possible are robust and solid state.
invaluable exercise in education about energy use and
renewable resources. • Improving technology and solar efficiency continue
to make solar products and systems more affordable
Many states and agencies are investing considerable and reliable.
sums in IT centres for schools and institutions in
both urban and rural areas. These projects often • Relatively economical maintenance capacity and
fail early due to limited initial contracting and basic training for end users remains essential to
poor maintenance. The combination of solid-state sustainable performance.
technology and solar power offers solutions to many
• Education of government and agency managers of
of the most common problems. However, progress will
development budgets is likely to be critical to market
require a level of public-sector commitment to the
development (see Section 6 for more discussion).
technology and a number of supporting steps. These
should include a continued development of the match • Access to applied technologies from other countries
already occurred in solar lighting—a full combination of should be a higher priority, so that adaption for use
efficient, robust and affordable components to deliver within Nigeria can be hastened.
overall products of extraordinary value. For laptops

3 A bright future for renewable energy in Nigeria?
3 A bright future for

renewable energy in Nigeria?
Despite the slow start for reliable renewable energy

technologies in Nigeria, there is reason to be optimistic
about their potential. This section discusses markedly
different levels of the same technology—from
consumer-level products through to grid-level
generation. The examples in this section are intended
to highlight developments, and capture only some of
the changes taking place. Recent progress suggests that
the fundamentals and range of options for renewable
energy in Nigeria are far stronger than has been
realised by most policymakers and the public, and that
dealing with obstacles caused by market and finance
issues (Sections 5 and 6) should take on renewed
urgency.
Figure 3.1: Low-cost solar-powered
lighting
3.1 Technology for consumer-level Notes: LED lights: extended life and more robust. Lithium
products batteries: with guarantees of up to five years.
Photo: author (Barefoot Power 1W light).
The improvements in technology described in the
pilots and specialist project applications of Section 2 The dramatic progress in lighting is based on
are occurring more broadly and extremely fast. Solar developments in different aspects of the end product:
lanterns and household lighting now actively promoted
• improved quality and price of solar panels
for those on low incomes highlight the pace of change.
In 2009, the technology was being promoted with • complete change in lighting technology
some enthusiasm by development organisations and
small specialist companies. The cost of a single lantern • new generations of affordable lithium batteries
was $100–$500—difficult to justify for low-income
• elimination of components—where stand-alone
households.
systems can run directly from batteries without
inverters or replacement bulbs.
Just three years, in 2012, the technology has
consolidated around a dramatically lower price, almost In addition to these improvements, there has already
unbreakable LED lighting, and battery life that can been one other key change in the market—the
genuinely be claimed to be in the range of 3–5 years emergence of a range of competing products of
and still improving. The cost of entry-level products is varying power which provide a choice for households.
now around $25 and the ‘payback‘ period for the capital There is little question that households using basic
costs of these products compared with the daily cost kerosene lanterns faced a lighting deficit, with
of kerosene lanterns is now justifiably being asserted lighting inadequate to complete basic tasks. The new
at well under one year, making a whole range of new generation of solar lighting products offers everything
financing options feasible. from a significant improvement on kerosene lanterns
through to small stand-alone systems suitable for
permanent use across a small house. As products
and markets improve, we can expect further gains in
matching affordable lighting options with actual needs.
13
At this level, major gains in affordability are being made 3.2 Large-scale generation potential of
by eliminating additional demands—there is no need ‘solar thermal’
for expensive (and energy-consuming) inverters, and
new batteries have improved reliability and portability. Because Nigeria has significant oil and gas supplies
The simultaneous improvement in the efficiency of (plus substantial coal deposits), renewable energy
lighting products and solar power has made products potential for power generation has been little
markedly more accessible. The opportunity for considered. All of the pilots described here have
meeting other needs in a similar fashion appears to be focused on stand-alone designs, with only the most
growing. There are improvements in the efficiency of isolated attempts to explore village-size installations.
a significant range of products used in households and
small-scale services, with electronic products making Figure 3.2, showing the intensity of solar radiation
particularly strong and consistent gains in efficiency. globally, was used by Lumina Decision Systems in
an outline of solar thermal power in Nigeria for a
The current everyday circumstances of most World Bank study. It puts Nigeria on a rough par with
households and small businesses in Nigeria are that Spain—the largest developer of solar thermal power
they use small computers, LED televisions, radios, outside the United States. Southern and eastern
and lighting powered by a petrol or diesel generator. Nigeria have extended periods of significant cloud
Section 4 will make the case that petrol generators cost cover, which reduces the intensity of solar radiation
well over 50 cents per kWh—well above the costs of significantly. This does not mean that solar power is not
unsubsidised solar power over even part of its lifetime. viable in southern Nigeria. Solar power has relatively
Figure 3.2: Global opportunities for solar thermal power plants

Source: Nigeria Low Carbon Plan: Power Sector: Interim Presentation October 2011, The World Bank, Nigeria.
Note: More detailed mapping and data can be found at http://re.jrc.ec.europa.eu/pvgis/countries/countries-europe.htm.

3 A bright future for renewable energy in Nigeria?
high-energy processes and needs, using mirrors and Put simply, northern Nigeria and the Middle Belt
concentration of light, while solar PV panels can appear to be sitting on an energy reserve of massive
tolerate a wider range of daily conditions, and have potential, which is becoming economically viable at
been successfully demonstrated in southern Nigeria. a remarkable pace. Given that it is precisely these
regions for which power distribution from southern
Solar thermal power is a classic example of an emerging Nigeria would be more expensive and complicated,
renewable energy technology where its history is very there is an overwhelming case for in-depth exploration
short but confidence is extraordinarily high about its of the region’s energy potential. The argument for
direction and ultimate potential. In a relatively short this is strengthened further by the wide geographical
time it has broken ground on two key challenges— cover of solar thermal potential. In many cases, it
bringing the cost of generation down markedly and should be possible to conceive minimal transmission
also developing efficient energy storage that can deliver distances and relatively swift construction compared
power overnight. Solar based around PV panels faces to gas plants relying on either long pipelines or lengthy
the obvious generation challenge of only being able transmission grids.
to provide direct power during daylight, and at night-
time is restricted to the relatively expensive option of One cautionary note—the anticipated competitiveness
batteries. of solar thermal plants is based around installations
of medium to large scale. The cost-efficiency gains
Thermal solar is able to use intensely heated salts are estimated at as much as 50 per cent scaling from
to provide an energy source for the same turbines it small pilots through to cumulative installations of
uses during the day to provide stable and continuous around 5000MW. This does not detract from its overall
power. The technology is sufficiently young that its cost potential, but does make it clear for now that there
is still based on few data points and a sharp trend in must be preparation for the technology to be treated as
reducing costs that is assumed to continue. However, a major capital investment.
the confidence in the technology has already led to the
development of the extraordinary Desertec project in
3.3 Other renewable energy sources
the Sahara desert. European companies are already
sufficiently confident of pricing trends to plan for a Away from the familiarity of solar PV, other renewable
massive installation across northern Africa with high- energy sources receive very little thought or attention.
voltage delivery of power all the way to Europe. The Nigeria’s strongest source of renewable energy by
first investments of over $1.5bn are already committed present size—hydropower—has been the cornerstone
in Morocco, with new-generation transmission costs of grid-powered generation for decades. In the present
already regarded as ‘modest’ additional costs. context, analysts are able to point to some significant
hydropower sources and even some plans, such as the
The analysis of Nigeria for the World Bank went on to dam for the Mambilla plateau in eastern Nigeria, but
estimate that if 5 per cent of suitable land in central the large investments and lead times have been cause
and northern Nigeria was designated for solar thermal for pessimism about their development.
then there was a theoretical potential of 42,700MW of
power production. However, in practice, the current Possibly the most significant change that can be
installed capacity of this technology worldwide is less anticipated in the short to medium term with
than 20,000MW. hydropower is an obvious and urgent need to overhaul
existing hydro-generation. Turbines in current use are
Cost is the main factor preventing a broad leap to this critically aged and producing little more than 50 per
technology but progress has been as remarkable as cent of their potential.
with the best of other solar technologies. Pilot plants
in 2004 were costing as much as $0.45/ kWh while The least well-understood source of renewable energy
third-generation systems just a few years later are in Nigeria definitely seems to be wind power. Until
costing $0.17–0.20/kWh. Although not yet competitive recently Nigeria was thought of by both local and
with efficiently installed gas or coal (see Section 6), this international policymakers as ‘not a windy country’ but
is already far below the costs most Nigerian consumers this conclusion is based on a very limited dataset. There
and businesses face for operating predominantly on has been a relative lack of accessible data to give this
household generators. support or to contradict it.
15
In 2005, Lahmeyer International assessed wind Yet, even more important should be the piloting of
speeds in 10 locations in Nigeria, finding average wind smaller schemes for rural areas that are beyond the
speeds of 4–5 metres per second at 30 metres height grid. Often not considered by large-scale mapping
(implying 5–6m/s at 80 metres height). These are exercises, generating combinations could moderate
moderate speeds that can certainly justify installations seasonal fluctuations and other constraints. The most
in locations at the upper end of this range, especially successful of these globally is wind power combined
those with the most stable conditions. The relative lack with diesel generation for when wind speeds are
of excitement about wind power seems to stem from low. The proliferation of large ‘community’ diesel
the fact that these figures do not indicate the massive generators in the Niger delta provides an obvious place
resources that exist in some ‘windier’ countries. The to examine alternatives to the status quo where fuel-
potential for wind power in Nigeria is obviously more supply problems often mean that electricity provision
modest than the massive potential indicated for solar from the generators is occasional rather than reliable.
thermal power. It may be for the same communities that solar and wind
are a plausible combination, given that their seasonal
Given the strengthening price-competitiveness of strengths complement each other’s weaknesses.
wind power, improving ‘niche’ applications at modest
wind speeds, and the relative ease with which it can be
3.4 Exploring new territory
deployed in modular size, wind power deserves better
research and pilot deployment in Nigeria. Detailed If there is anything that should be learnt from the past
mapping would provide answers about its potential two decades of hesitantly exploring renewable energy
for rural areas, particularly in combination with other in Nigeria, it is the value of keeping an open mind to
power sources. Mapping available in countries such as the progress of new and improved technology. The
the UK shows the level of variation that occurs once fossil-fuel industry is approaching its venerable fiftieth
highly averaged figures are abandoned in favour of year in Nigeria, while it is only in the last decade that
specific local data. While the potential for large-scale renewable energy other than hydro has even broken
generation might be restricted to a few locations, the into consideration at the margins.
‘off-grid‘ potential of wind power in isolated areas,
particularly the coastal Niger delta, has simply not been Section 6 will discuss the falling cost of renewable
explored. energy, as new technology becomes more accessible
and rapidly more efficient. Yet it is far from the cost
There is a relatively large wind pilot project being alone of generation that is driving new possibilities.
installed in Kano State of 30MW, and a further The following section will discuss one aspect of the
pilot being developed in Katsina State. These have key changes that have developed alongside renewable
the potential to provide the first locally accessible energy—the leaps in energy efficiency in a wide range of
evidence of how grid-level wind power operates in local devices from computers to air conditioners.
conditions for Nigerian policymakers and the public on
the potential role of wind power.

4 Renewable energy, households and efficiency
4 Renewable energy,
households and efficiency
The previous sections have discussed the potential least consensus that the scale of the issue is substantial.
of specialist applications of renewable energy and To give an example of the scale of divergence, we
large-scale generation, yet it is the ‘mass household need look only at estimates of suppressed demand for
market’ of Nigeria’s population of 160 million where grid electricity. Taking an end-point for aspirations
the majority of energy is consumed. With such varied of around 1KW demand per person—around what is
needs, it is not possible to analyse here the domestic found in many developed countries—then Nigeria has
energy demand of Nigeria, but it is possible to highlight a theoretical level of demand of around 160,000MW of
some of the vital themes that should be explored when generation, against the comparatively tiny level under
considering renewable energy. 5000MW presently being generated.
The consumer-level products highlighted in Section The prospect of matching demand and supply, even
3 provide some hints of the direction that affordable before taking into account industrial needs, appears
mass-market products could take. This direction will be overwhelming and far from the ‘stable power supply’
influenced by some of the improvements in technology promised by political actors for the next few years. The
that we have already highlighted, and some of the vital issues of power generation and plans are discussed
and constantly shifting context of generation and in an forthcoming paper by Lai Yahaya but Figure 4.1
demand that is discussed below. is intended to illustrate the likelihood of an ongoing
major gap between demand and supply of power in
Nigeria.
4.1 Energy needs and aspirations
There is relatively little agreed data on household-level Data for ‘off-grid’-generator power consumption (and
demand and energy needs in Nigeria but there is at demand) in Nigeria are notable for their extraordinary
60,000
50,000
Generation/Demand (MW)
40,000
30,000 Generation
Constant demand
Modest growth demand
20,000
10,000
0
2007 2011 2015 2019
Figure 4.1: Estimated electricity demand in Nigeria
Source: author.
17
range in estimates. While official figures put demand at 4.2 Not a ‘single market‘
20,000MW, other estimates for a population of over 160
For the purposes of this paper, it is possible to describe
million people put demand much higher. Although it
three basic tiers of energy consumer who could
has stronger industrial development South Africa with
consider the option of going completely or mostly over
a population of 50 million people is a useful indicator,
to solar power.
with generation capacity of 40,000MW barely meeting
demand. Figure 4.1 highlights the ongoing gap if 2007 1. Households and businesses ‘beyond the grid’.
demand was as low as 40,000MW with just three Consumers in rural areas, where there is no
per cent annual growth in power demand. The gap prospect of reliable grid power within around three
obviously becomes more dramatic if a starting point years, have only one source of competition for
of 60,000MW is treated as a more accurate estimate of renewable energy—petrol and diesel generators.
demand. With cost structures of $0.5/kWh or considerably
higher for generators, renewable energy can be
Actual suppressed demand is of course much more immediately competitive despite high initial
complicated than a single headline equation. Much of capital costs.
Nigeria’s population certainly cannot yet afford the
consumer goods that would routinely carry energy 2. Those ‘on the fringe’ of the grid. Despite a paucity
consumption to Western levels or beyond. Nor would of truly reliable data, it is clear that for much of the
they readily be able to afford the cost of the overall country being on the grid means an unpredictable
increase in energy consumption. It is this that has provision of power that could vary from anything
led to estimates of suppressed energy demands of between a few hours per week to 4 hours per
anywhere between 20,000MW and 80,000MW, with all day. A very large part of the population is in this
of the analysis relying on disturbingly small amounts group. Again renewable energy is competitive
of data. for this group, because grid supply is so limited
and unreliable. There is also the possibility that
At household level, there are two conclusions that can ‘optional’ heavier-energy-demand tasks can be set
be drawn from the limited data. First, the shortfall in aside for grid electricity, thus significantly reducing
energy supplies for the vast majority of the population the size of a solar system needed to support other
will remain very substantial for the next decade and needs.
beyond. Second, the real cost of power will remain that
3. Those ‘only partially blacked out’. In cities such as
of the business and household generators which have
Lagos and Abuja there are parts of the city that can
costs of $0.50/kWh and upwards. Power-sector reforms
reasonably expect 8–12 hours of electricity per day
will play a vital role in the economic growth that will
on a fairly predictable basis, compared to the rest of
come from more grid-electricity generation but there
the country. Realistically, this group is most likely
will not be enough power to go around, and many areas
to benefit from an efficient inverter and battery
will effectively remain locked out or facing substantial
backup system,1 which would take advantage of
rationing.
the cheaper cost of grid power while still providing
markedly better and cheaper options than a
Within this context of power rationing, and sourcing
generator when grid power is not available.
energy from other options, Nigerian households will
continue to prioritise a mix of what appears affordable
and accessible. In reality, the question of affordability
will be determined by factors beyond the control of
most consumers— primarily the reliability of power
supply to their area.
1 As with full renewable-energy systems, backup inverters still

require a significant capital investment with reliable small
home systems starting at N300,000 ($2000), with higher
costs if refrigeration and other heavier appliances are to be
supported.

4 Renewable energy, households and efficiency
Table 4.1: Changing energy efficiency for household products in Nigeria
Power consumption (watts)
Product 2002 2012 Maximum efficiency (for a solar

installation)
Lighting 600 (6 bulbs, 100W each ) 120 (CFL bulbs) 80 (LED lighting]
Television 300 50 (flatscreen) 20 (LED flatscreen)
Fridge 500 300 150 or lower (energy-efficient versions)
Fans 150 (3@50W each) 150 120
Total 1550 620 370
4.3 Household choices, energy efficiency The final column of Table 4.1 indicates the reductions
and renewables that can be made with some additional investment—
even if still difficult to obtain in Nigeria where choices
The choices that households will make about consumer
remain very limited. The above options do not deal with
products to meet their needs will have profound effects
the occasional demand from heavy-use devices such
on both the level of energy demand in Nigeria and the
as irons, kettles and water heating, but dramatically
relevance of renewable energy. In simple terms, one
highlight the potential drop in energy needs to meet a
of the most critical barriers to the wider use of solar
core set of day-to-day demands.
power in countries like Nigeria is the high capital cost
at the outset. As has been seen in specialised pilot
The table also highlights another pair of issues: the
applications, choices of more efficient products to
need for consumers to be aware of their energy options,
meet need will have a dramatic impact on the cost of a
and the importance of affordable ‘high-efficiency’
complete system.
technologies. Without more efficient products in use
At consumer level, savings made by energy efficiency for local needs, these gains could remain theoretical
or by focusing on lower-energy-consuming needs make for many households and small businesses. The ready
an impact at every level of a solar power system: fewer availability of more efficient products is also critical for
panels are required, a smaller inverter is needed, and consumers considering the option of ‘going solar’.
the number of batteries is also dramatically reduced.
Therefore, it is not hard to see how energy-efficiency 4.4 Consumer education, choices and
improvements over the last decade have dramatically supply chains
improved the odds of modest solar installations
meeting household needs. Table 4.12 outlines changes It is possible to see a clear opportunity for renewable
that are relatively accessible in Nigerian markets. energy at household level in large parts of Nigeria.
Major falls in the price of solar power and in energy
For moderate-income households, using appliances needs provide a powerful combination to compete with
as shown in Table 4.1, energy needs have reduced by generators. Yet these remain only two vital pieces of the
almost two-thirds for those using new versions of what more complicated puzzle of consumer choices.
are now very normal consumer items. The gains are
variable, but in some cases progress in items such as Fundamentally, there will be no significant move
computers and lighting it has led to predictions that towards renewable options unless there are visible and
major advances will occur almost as swiftly as has accessible packages that meet household needs. Putting
become the norm in computing power.3 the capital costs aside, there is still only a minimal
number of retailers of household solar systems in the
market, and their reliability is highly variable. While
the supply of energy-efficient products is moderately
2 Figures for energy use are drawn by the author from ‘average’ better, the level of consumer and distributor awareness
commercially available products in Nigeria.
3 On the gains made in efficiency of computer products, many
about the energy value of these products is low or often
of which are now driving the revolution in smart phones non-existent.
and mobile computing, see http://www.extremetech.com/
computing/95913-koomeys-law-replacing-moores-focus-on-
power-with-efficiency.
19
There appears presently to be a simple ‘catch 22’ trap in Policymakers, vendors, donors and investors obviously
effect. The capital costs of solar systems are restricting have a common interest in breaking this ‘catch 22’
the development of supply chains in solar and efficient situation. Their task is not made easier by the present
products that would give consumers the options situation. The next section of this paper describes
they need to adopt affordable combinations that suit a badly damaged market for renewable-energy
their needs. Yet it is strengthened supply chains, products. Yet the basic path would seem reasonably
consumer education, and access to the latest affordable clear—technology has changed and been significantly
innovations that will provide a further step down in proven. What remains is the market research, further
cost that could drive significant demand. adaptation and combination of products to match this
with the needs of a very diverse population.

5 A broken market?
5 A broken market?

With the progress demonstrated by niche solar
applications and the rapid advancement of energy
efficiency and cost savings, one might expect
Nigeria’s renewable-energy market to be growing
rapidly. Instead, the Nigerian solar market is better
described as one in which isolated pockets of success
are swamped by a swathe of government-sponsored
projects that have an extraordinarily high failure rate.
Instead of a robust market growing in confidence, there
is a nascent industry held back by a reputation that
has worsened considerably over the past five years,
particularly in southern Nigeria.
In addition, there is a broad reluctance on the part

of private consumers to commit to renewable- Figure 5.1: Solar water project, Delta
energy systems (or even inverter-battery backup State, incorrectly installed
combinations) because of the high capital outlay.
This interplays with a lack of available evidence for Note: This solar system was installed by a contractor to SPDC.
It appears to be otherwise functional but was installed at a 15°
ordinary consumers that their investment is likely to tilt away from the sun. Image courtesy Niger Delta Wetlands
be successful. Finding reliable vendors and installers Centre.
for solar equipment (and evidence of successful
models) is difficult and time consuming. This is further
complicated by the absence in most cases of reliable Known examples include:
warranties or service providers who can provide both
• The Niger Delta Development Commission where
good-quality products and maintenance. This section
dozens of large solar water projects (costing more
looks at some of the prime causes of a collapse in
than $300,000 each) have been commissioned since
market confidence, and some of the possible remedies.
2006. Short surveys suggest that the vast majority of
this first phase of projects were never completed or
5.1 Patronage contracting failed shortly after installation.
The high capital outlay of solar projects has made • Millennium Development Goals projects. This
them relatively attractive to government agencies presidency agency either contracts out development
that prefer large projects and make investments with projects or works in collaboration with states.
very little knowledge of what is required in terms Concerns have been expressed by reviewers that
of goals, contractors and technical basics. This lack the majority of projects appear to be failing within a
of concern and accountability seems explicable short period with poor quality implementation and
only as a continuation of the patronage contracting maintenance the most common problem.4
phenomenon, wherein the interest of administrators
and contractors lies in maximising profit. These shortcomings are not unique to large federal
government agencies but also feature in a number
Project completion or even short-term sustainability of sweeping state initiatives in Nigeria. For example,
appear to be fluid requirements where ‘what you can Nassarawa state commissioned 147 solar water projects
get away with’ influences implementation much more in 2004 seeking to provide one to each ward within the
than best practice. Sadly, this is a condition that is not
unique to solar power. It is a symptom of development
contracting where many of the key actors are more
interested in patronage and questionable contracting
4 Interview with consultant who asked not to be named due to
opportunities than in the end result (Figure 5.1).
the status of reviews carried out
21
local governments of the state. A review5 by Iceberg state-installed systems are reported to have failed in
Consulting commissioned by the state government around six months. In Rivers State and Bayelsa, most
found that 83 per cent had failed.The reasons for failure solar systems installed around 2006 were removed and
are similar to those that the reader will see cited more replaced by standard lighting after failing within 12–18
than once in this report: months. In other states, failed solar street lights remain
as silent testimony on how to get solar installation
• poor technical system design and installation wrong.
• inappropriate procurement of both borehole and
solar array installation Effective solar street lights are challenging but not
impossible. The light demanded is at the upper end of
• little or no training given to the end users in the what solar power can deliver without excessive cost,
community although this has improved markedly with the advent
of LED lighting. Two rare cases that demonstrated
• lack of maintenance.
this in Nigeria are lighting at FERMA in Abuja and a
The practice of poor work carried out through complementary system installed by Iceberg Consulting
patronage contracting continues, with only limited in 2003 in Nasarrawa state that is still functioning eight
responses to obvious problems. As with many years later.6
development projects in Nigeria, there is no effective
monitoring of services delivered or consequences for 5.3 Variable quality of installers and
those who have sponsored large numbers of failed vendors
projects.
The marketplace for renewable energy seems feeble at
The damage to the perception of renewable energy, best when compared to other areas with significant grid
both within government and among the public, shortcomings such as Kenya. The massive generator
is substantial. There is an increasing number of market that has been established over decades in
communities with experience of a failed solar project of Nigeria to provide generation from the smallest scale
one kind or another, probably significantly outstripping of less than 1kva through to support for major hotels
the number of communities with positive experiences also highlights the massive growth that is required
where their system is still functioning well after several if renewable energy is to be a significant part of the
years of use. overall energy mix in Nigeria.
Until very recently, the few renewable/solar vendors

5.2 Difficulties with solar street lighting that could be found in the major cities seemed to rely
Solar street lighting projects have done more damage almost exclusively on contracts from government (or
to the perceptions of renewable energy in Nigeria than oil companies) for installations which they are often
any other shortcoming of the young industry. Since under-qualified to complete well. Vendors often seem
around 2003, they became fashionable with state to be a mixture of the inexperienced with good but
governments as a quick fix for the lack of lighting in sometimes naïve intentions, or quite cynical outfits
urban areas due to failing grid electricity. However, who have little concern about their products as long
the systems installed typically used cheap and poorly as they can limp past an initial inspection and official
integrated components, underestimated the demand commissioning. There are good-quality installers and
on batteries, and suffered from poor installation and vendors, but they are rare and often very hard to find
low maintenance. for those without existing networks.
Most of the designs seen in Nigeria have housed This weak standing is not helped by the reluctance
batteries in a metal box on the street-light pole. In of private individuals to spend the required funds to
tropical areas, this can be a disastrous choice because secure a small home system or other similar options.
battery life is usually seriously affected by high In fact, two of the solar vendors visited by the author
temperatures. Many systems will probably have died admitted that they did not have solar systems installed
simply because their batteries were cooked by the in their homes because of the expense (despite living in
very solar energy they were intended to store. Most cities where grid electricity was often available for as
little as 2–4 hours per day).
5 The review with detailed examination of each borehole is

available on request from Iceberg Consulting 6 Interview with Louis Gyoh (Iceberg Consulting) January 2012

5 A broken market?
The challenge for the public and potential sponsors of renewable energy at the Ministry for the Environment.
renewable installations in finding good, experienced It would seem reasonable to expect that projects driven
practitioners is considerable. Because of the hesitant and monitored for their lasting quality and ability to
start of renewable energy in Nigeria, those with 5–10 change mindsets could come from here.
years experience in the industry seem to be both rare
and relatively isolated. On several occasions while Other steps to address the problems in the market
preparing this paper the author encountered well- require a careful combination of market analysis,
intentioned individuals with the resources to invest in specific education of consumers, capital support to a
at least small solar installations but relatively little idea fledgling industry, improved vendor visibility, and the
where to find a suitable company to complete the work. use of regulation to build confidence in the market.
Such efforts to build ‘an industry’ can easily go awry
There are only limited associations of solar or or have unintended consequences. It is vital therefore
renewable practitioners in Nigeria, often through that these steps are carefully developed in close
other bodies. The Ministry for the Environment’s collaboration with practitioners who have already
renewable energy programme keeps a database of proven themselves.
actors but this does not overcome the relative isolation
of practitioners in a very small industry within a very The next section of this paper explores one vital
large country. element of market development—finance needs for
an industry in which capital investment upfront is a
defining feature. The key messages in Section 7 then
5.4 Lessons and market therapy
describe a number of broad steps, which together
The damage done to the market by the wave of failed would make a very significant impact on the market
sponsored solar projects in the last decade, along with failings that have occurred to date. If these issues are
some questionable small products, cannot be easily or addressed together as a coherent strategy, then this
quickly fixed. As much of the damage is to perceptions, opens a clear path towards a strengthening market in
this suggests one obvious area for attention—highly renewable energy.
visible ‘best practice’ projects which are specifically
placed both to demonstrate the best of new technology
and to change public perceptions.
Government has a vital role to play here as it could

provide venues and sites for installations that will
be seen on a daily basis. The government retains a
competent core focal point for its engagement on
23
6 Financing renewable energy
in Nigeria
The financing of renewable energy projects is seen by needs. Another example is the choice between an
both practitioners and commentators as the single investment of N40,000 for a generator versus a small
largest barrier to the expansion of improved uptake solar/inverter combination of N200,000. In all cases,
of renewable energy. Even those close to the small the challenge of finding the initial capital for solar
industry have held back on adopting systems because systems is considerable.
of the high capital cost and the relatively long ‘payback’
time in a difficult environment. This section will In making choices like these, the gains for consumers
discuss some of the evolving issues in terms of capital must be crystal clear for them to make a major
costs and the consequent financing needs implied for commitment to renewable options. In most cases,
households. this suggests that the process of matching some of a
consumer’s energy needs with the most efficient of
renewable options is crucial to winning both ‘buy-in’
6.1 ‘Right-sizing’ capital costs
and meaningful gains.
Whatever the level of income of consumers, the
relatively high capital costs of solar products has
been seen as a crucial barrier to uptake of the new
6.2 The reducing core costs of solar PV
technology. In both small-home and business Presently, with a very small market and only modest
systems, the gap is significant in what remains an turnover, it seems unlikely that the gains in reduced
overwhelmingly cash economy. This applies at all levels cost of solar PV electricity have fully reached Nigeria.
in the market. A householder may be considering a It seems equally unlikely that these costs will have
solar lantern costing N3000 with no energy inputs been fully factored into the calculations being done by
versus a kerosene lantern of N300 with constant fuel vendors and installers of solar equipment.
Figure 6.1: Projected costs of solar PV versus conventional electricity, 2005–2031
Source: Nigeria Low Carbon Plan: Power Sector—Interim Presentation, October 2011.

6 Financing renewable energy in Nigeria
$0.30
$0.25
LCOE Grid Technologies ($/kWh)
$0.20
$0.15
$0.10
$0.05
$0.00
2010 2015 2020 2025 2030 2035
Time
Grid technologies
Gas Single Cycle Coal Supercritical Wind Turbine
Gas Combined Cycle Hydropower Solar Photovoltaics
Coal Subcritical Biomass power Conc. Solar Power
Figure 6.2: Projected costs of different energy sources, 2010–2035
Source: Nigeria Low Carbon Plan: Power Sector—Interim Presentation, October 2011.
However, the drop in prices has accelerated over the Second, both figures compare renewable to existing
past four years. While there is some margin in the grid power alternatives. With so little access to grid
degree of optimism indicated in Figures 6.1 and 6.2, power in Nigeria however, reliable grid power is not
comparing PV to other energy sources, the message is a realistic option for most Nigerians. Section 6.4
the same: the marked improvement in solar technology attempts to provide some context for the comparison
means that the question is when rather than if solar between renewable electricity and the main realistic
power will be more competitive than existing fuels. competition of generators.
Figures 6.1 and 6.27 both highlight two common

6.3 Installation costs
themes. The first is the continuing drop in renewable
energy core costs. The impact of this at household For smaller projects, whether in Europe or Africa, the
level can be overstated (see Section 6.3) but the scale fall in the price of solar panels and reduced energy
of the fall in costs is still good news at both macro and needs have further highlighted one core issue. It is not
micro scales. It has implications in business planning the theoretical efficiency of a panel that is the greatest
even for the short term—where it underlines the determinant of cost and value, but the installation
importance of installers being able to access the best cost of a system. This makes labour costs and sector
of current products and the need for their customers efficiency all the more relevant in estimating likely
to be aware of options that give them the best of latest benefits for consumers.
developments.
In Nigeria, the very small size of the renewable sector
appears likely to hold good-quality installation costs
higher than in other countries, at least in the short
7 Figure 6.2 is a good example of the many estimates of trends
in power prices but it is important to note that it aggregates term. Yet this also draws attention to another key goal.
‘typical’ costs rather than highlighting real local conditions. With labour costs lower in Nigeria than in many of the
Due to the high cost of generation infrastructure projects countries for which installation comparisons are done,
in Nigeria, conventional power costs can be assumed to be
significantly higher, with a high reliance on gas for generation.
it seems vital to develop technicians who can provide
25
a professional and affordable service. Underlining the running costs of a generator or the daily cost of
this are the increasing number of analyses arguing kerosene for lanterns.
that most jobs associated with renewable energy
are in installation and maintenance rather than the When considering the case for household consumers,
increasingly automated manufacturing sector. Bermuda and other island nations give a good
indicative cost of isolated areas relying on diesel. This
In addition to cost- and energy-efficiency, quality is area is embarking on a huge drive for energy efficiency
also as important in terms of reliable components. and increased use of solar power, partly as a reaction
There are several hazards in Nigeria that can easily to grid power costing $0.45/kWh. Those engaged on
damage equipment, making renewable energy capital rural projects can further note detailed data from a
items a markedly more expensive option if difficult comprehensive review in Namibia,9 which tracked
repairs or replacements are required. Investment in plunging payback times as well as performance levels
some additional protection against risks ranging from consistent with the experiences of NDWC in the
lightning to accidental damage or abuse have proven Niger Delta. In both cases, data from earlier than 2010
to be of very high value to pilot projects, and the same indicated that the point at which the higher capital
principle seems likely to apply to most consumer investment for solar systems resulted in net savings
situations. was under three years and growing shorter. Savings
after this point would represent a considerable gain for
Finally, these costs emphasise why some smaller communities and investors.
‘product’ solutions have obvious advantages where
they are appropriate. Good-quality solar lanterns
6.5 Feed-in tariffs
or small DC lighting systems do not require
specialist installation skills and, with LED lighting, Both NERC10 and federal government representatives
are exceptionally resistant to damage and abuse. in Nigeria have stated their commitment (without
Therefore, small modular applications obviously have details) to setting a renewable energy feed-in tariff that
a major lead in being able to take advantage of recent will help the sector to grow. In most countries with
gains. developed renewable energy capacity “feed in tarrifs”
include payments that homes and small businesses
can receive for power that they generate in excess of
6.4 The competition: generators and their own needs and feed back into the electricity grid.
kerosene However, most analysts and stakeholders in the power
In comparing the costs of renewable energy, one sector, in informal discussions, have dismissed this idea
crucial factor often not taken fully into account is the as impractical in Nigeria given the fragile and confused
extraordinarily high cost that most Nigerian consumers state of the existing grid. This is almost certainly true
currently pay for lighting and electricity. With surveys for small installations or households, but may not be
arguing that 50 per cent of the population have no so easily disregarded for larger businesses that could
access to grid electricity8, and that many more people support significant renewable generation.
have access for just a few hours per week, the main
energy sources for a very large group lie elsewhere. If the federal government acknowledges that renewable
energy has a strong economic case for development
Obtaining full spending and cost estimates are in the medium term, especially in northern Nigeria,
challenging. Almost all consumers ration their use of then feed-in tariffs that give the industry an incentive
generators, lanterns and alternatives, while there is to develop should be carefully considered. In Europe,
considerable variability in the efficiency of the systems where many of these technologies enjoy less natural
in use. Further, some estimates do not account for advantage, the feed-in advantages are significant. The
the costs of poor-quality fuel (reducing generator United Kingdom is in the process of reducing its green
life), gathering fuel, and unpredictable price changes feed-in tariff to a still generous 21 pence (52 Naira) per
and shortages. Yet better analysis of these costs for kWh, from over 40p (104N).
most consumers will probably help convince them
that a well-designed solar system will save them
vital amounts of money over time—whether against
9 http://www.self.org/SELF_White_Paper_-_Solar_vs_Diesel.
pdf
10 Nigeria Electricity Regulatory Commission, which has the
8 World Bank worldwide energy assessment 2010 http://data. mandate for setting tariffs, licensing power generation and
worldbank.org/country/nigeria protecting consumer interests.

6 Financing renewable energy in Nigeria
Such a tariff might seem extreme in Nigeria, where be significant movement on broader power-sector
most analysts expect the gross tariff (before any reforms.
temporary mitigation) to jump from its present 10N to
between 20 and 30 Naira per kWh. Yet conventional
estimates of generator costs at around 70–80N
6.6 Access to capital
($0.45–0.50) emphasise the need to examine the Access to capital at affordable interest rates is crucial to
broad context of cost-benefit analyses. It is also worth enable investment in renewable energy—at household
considering that some of the challenges of renewable level or in large-scale generation. The great majority of
power could well be presented as merits in the context costs associated with any system of renewable power
of Nigeria’s difficult power situation (Table 6.1). generation are in advance. In systems with batteries,
there are also significant costs after 5 years (when the
There are other risks in the concept of a feed-in tariff batteries need replacing) but other components such
for Nigeria. Fuel subsidies have proven disastrous as panels are expected to last 15–20 years or more. This
channels for contract abuse and fraud. Any feed-in longevity is fundamental to the calculation of power
tariff would have to operate with outstanding cost from renewable energy systems, and at the core of
transparency in a challenging market context. Overall, justifying the higher costs when first installing systems.
there may be a strong case for feed-in tariffs to
promote swift deployment of large-scale generation Adequate capital becomes the critical issue for bridging
of renewable energy in northern Nigeria. This would the ‘payback period’ in funding renewable projects.
certainly have the potential to bring about rapidly This is basically the length of time required for savings
increasing access to power. However, the benefits from ‘free’ renewable electricity to overtake the costs
would be sustainable only if lessons about management of grid/generator power, with its constant bills or
of power, contracting and oversight could be fully demands for fuel. However, if the main source of capital
absorbed. The emergence of a more credible NERC is loan financing and interest rates are excessively high,
is a key first step, but the crucial factor is likely to the loan costs become a major factor in the overall cost
Table 6.1: Challenges and responses on the costs of renewable energy in Nigeria
Challenge Response
High initial capital cost of installing The upfront capital investment cost has some advantages in Nigeria—
renewable energy—whether wind, solar there are no questions about the ongoing financial and stability issues of
PV, hydro, or solar thermal. fuel and pipelines.
Solar and wind power are clearly better The areas with overwhelming solar potential (northern Nigeria) are very
suited to specific parts of Nigeria for the poorly served at present, and seem likely to face very high transmission
most competitive solutions. costs from growing power generation areas in the Niger Delta.
Renewable energy installations have Smaller installations near to target communities should mean faster
tended to be relatively small compared to deployment and much lower transmission losses than distant gas-
conventional grid generation. powered options.
Grid-level renewable energy is not an Nigeria’s power shortages are so acute that this may be an acceptable
‘always on’ generation solution. Both shortcoming initially. As the grid improves, Nigeria has a wide range of
solar and wind require complementary sources that should complement renewable sources well.
generation.
The feed-in tariffs used as a tool in other If structured correctly, a green feed-in tariff could prove attractive to
countries could prove expensive at a agencies such as the World Bank, with a good potential match in the
time when Nigeria has difficulties funding longer term between affordable interest rates and economically sensible
infrastructure. green outcomes. The existing cost of power to the private consumer is
extremely high, making even the more expensive renewable options
competitive.
27
of converting to renewable energy. With commercially In addition to low-interest capital, several other key
available interest rates starting at around 25 per cent actions need to be taken in tandem. Renewable energy
per year (plus tough guarantee requirements), this is a developers need to produce far more detailed costings
major issue in Nigeria. and realistic payback periods for the full possible range
of installations, from generation level to household
The need for affordable loans has been recognised for systems. For household or stand-alone systems, this is
some time in Nigeria. There is an evolving commitment not too complicated but publicly available data remain
through the Bank of Industry to provide loans at low scarce. More information on consumers’ willingness
interest (7 per cent per year, or less). However, this is and ability to pay bills is desperately needed, for both
far from fully realised at present, with blockages both potential investors and customers for renewable
in the provision of financing and in uptake. systems to see clearly the likely costs and benefits.
Loans will be utilised only when improved access to
capital is combined with credible information and
choices.

7 Some key messages and recommendations
7 Some key messages and

recommendations
According to the Nigerian federal government: energy still requires fundamental competence in
planning and development to succeed.
In view of the high capital costs and long lead
times required to develop commercial power This section does not attempt to describe fully the
generation through solar, wind, nuclear and detailed steps for assembling a ‘jigsaw’ of policy
biomass, the Federal Government will focus its responses, but identifies broad headlines under which
development efforts on hydro, coal and natural it might be possible to group key areas for action.
gas. The potential of natural gas, in particular, Aside from suggesting a change in policy stance at the
will be prioritised and incentives will be provided core of government, it suggests the relatively early
to investors to exploit this resource to its fullest steps that might be feasible with modest government
potential.11 commitment which could deliver real gains to Nigerian
households and promote broader buy-in to this
The purpose of this paper is to explore existing fast-developing area. It seems likely that a foundation
renewable energy in Nigeria, examine some of the of success at this level might prove crucial to broader
reasons for the sector’s under-development compared support for major next steps—such as competent
to other countries, and discuss emerging evidence investment decisions in larger-scale solar power
of the potential of renewable energy for a critical generation.
emerging role. Some of the arising suggestions are
relatively easy to summarise: Within these limits, this section concludes with
selected key recommendations that need to be read as
• Pilot initiatives have demonstrated both the early steps in an ongoing process.
potential of renewable energy in Nigeria and some of
the ongoing challenges.
7.1 Time for a shift in energy policy
• Continuing shifts in technology and costs have
The evidence from emerging research makes it clear
created major opportunities for both small- and
that Nigeria has a greater pool of renewable energy
large-scale interventions.
resources than has previously been recognised.
• Carefully designed work on markets, education, Furthermore, the international evidence is that these
and finance are now well justified investments for resources are becoming competitive with existing
renewable energy to meet its potential in Nigeria. power sources at a remarkable pace. Nigeria’s present
extraordinarily high-cost energy options mean that
Unfortunately, the practical steps required for a better renewable energy is already competitive or an obvious
energy future for Nigeria with a strong renewable winner in many specific situations—including targeted
sector are much more difficult to distil into a short assistance to those on the lowest of incomes.
number of bullet points. Although headlines for some
key steps can be clearly stated, the process is likely to There is a need for energy policy to acknowledge
involve assembling a complex jigsaw of actors, finance, that the dismissal of renewable energy as a short-
education, and technology. Some of these issues can to-medium-term option in the official Energy Road
be pursued independently but many require good Map (as quoted above) was a fundamental mistake.
co-ordination and collaboration. The spectacular This does not mean that renewable energy can be
failures of dubious solar projects involving significant rushed to centre stage but that there is a need for
government spending demonstrate that renewable systematic policy, research and financial support for
the development of the renewable-energy sector. An
attempt was made to lay out such a path in 2005 with
the Renewable Energy Masterplan which was never
11 Roadmap for the Power Sector 2010, page 10. http://www.
adopted. Swiftly developing and implementing an
nigeriapowerreform.org/index.php/downloads
29
updated plan for strategic investments in renewable 7.4 Matching capital growth to emerging
energy, which incorporates the lessons of the past capacity
decade, is a crucial first step.
Government-led financing in the power sector has a
troubled history in Nigeria, and disastrous levels of
7.2 Understanding and educating the corruption in the fuel sector have given subsidies a very
market bad reputation. Yet, as highlighted in Section 6 above,
Despite the importance of government policy, it is also there is a pressing need for capital for both consumer-
crucial for government and other actors to understand and grid-level products. Research for this paper with
that many of the best energy solutions will occur in the solar industry practitioners and consumers suggests
marketplace—where often the role of government may there is no magic bullet on the issue of financing, but
be only to minimise complications. For many needs, that the following will be useful to note:
renewable energy is already competitive with existing • Additional capital should not be considered in
sources, and the remaining issue is to align needs, isolation—it will be far more effective in the context
solutions and affordable capital. However, progress will of other measures.
be limited unless both the customers for energy and the
providers have a much better understanding of both • Business mentoring and strategy support seem
needs and viable energy solutions. to be sorely needed for small and medium-sized
businesses. This should be pursued in close
For market-driven demand to play its role, a highly collaboration with expanding the capital available to
visible range of pilots and education programmes businesses.
seems to be vital before widespread uptake by
justifiably sceptical consumers. There is a need for • In some consumer areas, capital support for payment
research that breaks down household needs, incomes by instalment seems viable—particularly for civil
and aspirations. The diverse situations of rural and servants and those on a stable income
urban households with massive differences in income • Subsidies for consumer products should not be
and cost of living mean that there needs to be a dismissed outright. New technologies appear to
matching range in renewable-energy solutions that can be offering better options for accountability and
be much more easily matched to individual situations. assurance that benefits are reaching their intended
It is on the basis of this data that renewable-energy target.
providers and vendors should be able to provide
products and systems that fit with real-world needs. Possibly the key role for government is to fund a
strategy in which available capital will grow in line with
the renewable industry reaching verifiable milestones.
7.3 Cultivating developers, educators and
Those investing additional effort in renewable energy
partners
need to be confident that, as they develop, affordable
This is much easier said than done—especially in a finance will continue to be available.
political climate which emphasises local content in
industry. However, as noted in the Renewable Energy
7.5 Incentives for efficiency and demand
Masterplan of 2005, there is a need for strategic
reduction
investment in both research and business development
that can elaborate and consolidate opportunities for an The roadmap for the power sector in Nigeria, and
industry in its infancy. almost all industry thinking, is presently geared
towards massively increasing supply. However, it has
There is a base of local knowledge valuable in been well demonstrated that the most economical way
developing practical projects. This could usefully be to meet overall power needs is to reduce demand where
paired with international experience, which can help this is possible without compromising the experience
Nigerian businesses and government to match the of customers. Put simply, reducing the consumption
rapid pace of overseas technical advances. of a million consumers by 10 per cent (or say just 500
watts of peak demand) can be swifter and radically
more economical than building another 500MW
thermal plant.

For renewable energy, it seems worthwhile to consider coolers, low-energy light bulbs (especially LEDs), and
seemingly radical options—regulatory incentives for other low-energy devices as they emerge.
small systems, or even village-level schemes that go ‘off
grid’ entirely or maintain a very limited connection. With the growing problem of sub-standard
While technically divorced from the mainstream power components, it would be tempting to suggest that
sector, those taking this option are making a small but Nigeria should impose standards on solar products that
significant contribution to reducing overall demand are imported. However, in the current environment
with a corresponding improvement in the prospects both customs and other government agencies lack
of stable supply to those on the grid. Providing some the capacity to test or certify products credibly. This
additional incentives to an emerging area may well help should be an area for carefully planned development
speed the emergence of sensible off-grid installations, where regulation follows only when government can
which still face the higher costs of an emerging demonstrably implement policies both fairly and
technology and will often be considered for relatively effectively without unreasonably increasing cost for
remote rural areas with associated challenges. As legitimate suppliers. In the interim, this makes the
noted above, improving the efficiency of key appliances role of non-government actors in establishing credible
markedly reduces the capital cost of a solar system brands and reputations even more important.
of any size, creating a virtuous circle of demand and
market development. State governments, whose rural communities and
low-income residents stand to benefit from appropriate
low-energy products, should consider reducing
7.6 Supply chains, customs and
business costs for renewable-energy companies as
regulation
markedly as possible. The multiple local charges and
The tiny size of the renewable industry in Nigeria frequently unnecessary harassment of small business
creates significant problems for installers, especially by various arms of local government is a significant
when combined with the prevalence of sub-standard barrier to small and medium-sized businesses in the
products of key types such as batteries and inverters. renewables industry. Reducing such barriers would
Importation is an area in which there has been create a welcome incentive for rapid expansion.
theoretical progress with a zero tariff but in reality
the number of barriers for inexperienced importers Finally, government could play a vital regulatory role
are many and costly. The recent experience of a ‘Light looking towards the future. Building standards in
Up Africa’ vendor is instructive. Customs officers first Nigeria are poorly enforced but seem to be evolving in
chose to interpret integrated solar lights as lanterns some areas. Nigeria should consider building standards
(a 35 per cent tariff ) and then proceeded to follow up that, without imposing unreasonable cost, provide
with a range of other charges which brought the cost of both pressure and support for the adoption of low-
importation to 100 per cent of original cost. energy principles at every stage of construction. These
regulations could be progressively advanced as various
This situation seems to be unexceptional but is options become more feasible and readily accessible at
partly derived from entrepreneurs with limited affordable prices.
business experience who may also lack the networks
to overcome such hurdles efficiently. If low-income
Nigerians are to be assisted by renewable-energy
7.7 Government as a promoter of
technologies, it seems vital that relevant arms
renewable energy
of government actively recognise this as an area One of the main thrusts of the power-sector reforms is
for encouragement, requiring the sympathetic to remove government as an actor in the operational
interpretation of regulations at every stage. and much of the ownership sense, leaving its role
primarily as one of regulation. This is a strategy
It would also seem to be an appropriate time for founded on the state’s disastrous role in managing
government to consider a broad interpretation of the sector and investment over the past four decades.
solar and energy-efficient products, so that there is Therefore, promoting government involvement in
an incentive for mutually reinforcing products to the renewable-energy sector should be pursued with
enter the mass market belatedly in Nigeria. Suitable caution.
candidates would seem to be all deep-cycle batteries,
inverters, energy-efficient fridges, low-energy air There are obvious areas in which government could
address financial gaps. This would probably best be
31
in close collaboration with unquestionably qualified There is a major role for government in both
partners using models that adopt the many lessons of supporting and directly participating in public
international experience from the past two decades. education on energy. If any of the potential gains
These areas include: for renewable energy and increased efficiency are to
be widely realised, then communities, businesses,
• high capital cost of small home/business and the public need to be much better informed
installations, and difficulty in obtaining affordable about the principles of energy use. The secondary-
finance school education scheme started by the Lagos State
• investment support for new technologies where Government with an online component and focus on
private investors may lack experience and confidence energy efficiency12 is a laudable example of a simple
(solar thermal being a classic example) initiative that could have multiple positive ripple
effects. Integrating education on energy issues, and
• capital costs for proven renewable technologies such particularly renewable energy, into school curriculums
as solar PV and wind power in appropriate locations. and massively expanding the volume of accessible
written material seems to be an entirely appropriate
The federal government already sponsors a significant
role for government.
amount of solar PV installations through the Energy
Commission of Nigeria, NDDC and other agencies.
Education initiatives should not be limited to
However, as elaborated in Section 5, there is an urgent
schools however, as there is also a wide range of adult
need to review the quality and medium-term outcomes
audiences. Creative steps such as partnerships with
of these pilots. There is still value in government-
churches and mosques to demonstrate renewable
sponsored pilots to help establish these new
energy options should also be considered along with
technologies but it must come with a radically lower
other potential areas for promotion.
failure rate than is presently the norm.
Government must consider the place of renewable
Given the size of the federal and state governments
energy in the tertiary sector where credible investment
(including their services) in the Nigerian economy,
is needed in both education and research. Practitioners
there are obvious benefits from programmes for state
have rightly identified the urgent need for capable
bodies to adopt renewable and low-energy technologies
technicians, which will only grow if the sector is
progressively. In some areas there have been hesitant
encouraged to develop. However, with the case for
steps in this direction, such as policies to adopt low-
expansion there is also a credible case for investment in
energy lighting, but there is a great deal more to do.
all of the following:
As state services tend to suffer from chronic shortages • trade training for technicians that targets those
of funds for power (being as dependent as other actors with some existing electrical experience (generator
on generators), there are obvious multiple benefits vendors and repairers)
in converting more services to renewable energy
wherever feasible. Given recent history, the critical area • professional development for solar and renewable
is ensuring that any conversion is both cost-effective engineers—until local capacity develops, this will
and handled by reputable companies that have the certainly require overseas scholarships
latitude to recommend designs suitable for particular • supporting credible institutions that can research
local conditions. renewable energy with an early focus on appropriate
adoption of best available technologies for Nigeria
There are two initial steps:
• careful fostering of local manufacturing, repair and
1. Pilot partnerships that establish best practice support facilities that should evolve with growing
for several key areas (e.g. schools, health centres, experience of new technologies.
government buildings) of varying scale in highly
visible locations.
2. Swift research that identifies appropriate priorities

and quick wins for renewables and energy-efficient
options, along with key guiding principles for next
steps. 12 Although the main promotion has closed samples of the Lagos
Electricity Board campaign can be found at http://www.lseb.
gov.ng/content/campaign-materials

7.8 Key recommendations
Develop integrated renewable energy planning

and investment
The federal government needs to reinforce its
existing initiatives by developing both an integrated
renewable-energy plan and a systematic major increase
in investment in research, market development and
regulation of renewable energy.
Provide incentives for renewable energy uptake

Government should also consider incentives, probably
through a feed-in tariff, for at least one major pilot of
solar thermal power generation in northern Nigeria.
Ensure sufficient and affordable capital

financing
Low-interest capital financing for renewable energy
needs to be systematically expanded, with increases in
available capital matching growth in the industry.
Improve public understanding of renewable

energy
Renewable-industry actors and government need to
make a significant investment in public education
that will improve consumer and policy choices and
overcome existing prejudices against the industry.
Cultivate collaboration between renewable

energy developers and policymakers
Policymakers and renewable-energy developers need
to work closely together to develop best practice
options for services in rural areas—particularly for
education, health centres and water provision.
Educate on energy use and efficiency

Energy use, particularly energy efficiency and
renewable energy, needs to be a core part of the
education system as swiftly as feasible, with a view to
changing public behaviour and expanding participation
in a growing renewable-energy sector.
33

Renewable Energy Potential in Nigeria: Low-Carbon Approaches To Tackling Nigeria's Energy Poverty

Uploaded by

Copyright:

Available Formats

Renewable Energy Potential in Nigeria: Low-Carbon Approaches To Tackling Nigeria's Energy Poverty

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Renewable Energy Potential in Nigeria: Low-Carbon Approaches To Tackling Nigeria's Energy Poverty

Uploaded by

Copyright:

Available Formats

Renewable Energy

The SUNGAS project

For further information on the SUNGAS project please contact:

Emma Wilson, International Institute for Environment and Development (IIED),

Cover photo: Solar water pump, NDWC

2 Renewable Energy Potential in Nigeria

Provide incentives for renewable energy uptake

Ensure sufficient and affordable capital

Improve public understanding of renewable

Cultivate collaboration between renewable

Educate on energy use and efficiency

4 Renewable Energy Potential in Nigeria

6 Renewable Energy Potential in Nigeria

The Niger Delta Wetlands Centre (NDWC) has been

8 Renewable Energy Potential in Nigeria

• Investment in quality components is rewarded with

With shrinking payback periods (see Section 6.4),

For some years in Nigeria, several companies have

10 Renewable Energy Potential in Nigeria

and tablets, the match on efficiency is straightforward

12 Renewable Energy Potential in Nigeria

3 A bright future for

Despite the slow start for reliable renewable energy

Figure 3.2: Global opportunities for solar thermal power plants

14 Renewable Energy Potential in Nigeria

16 Renewable Energy Potential in Nigeria

Figure 4.1: Estimated electricity demand in Nigeria

1 As with full renewable-energy systems, backup inverters still

18 Renewable Energy Potential in Nigeria

Table 4.1: Changing energy efficiency for household products in Nigeria

Power consumption (watts)

Product 2002 2012 Maximum efficiency (for a solar

Television 300 50 (flatscreen) 20 (LED flatscreen)

Fridge 500 300 150 or lower (energy-efficient versions)

Fans 150 (3@50W each) 150 120

Total 1550 620 370

20 Renewable Energy Potential in Nigeria

5 A broken market?

In addition, there is a broad reluctance on the part

Until very recently, the few renewable/solar vendors

5 The review with detailed examination of each borehole is

22 Renewable Energy Potential in Nigeria

Government has a vital role to play here as it could

Figure 6.1: Projected costs of solar PV versus conventional electricity, 2005–2031

24 Renewable Energy Potential in Nigeria

Figure 6.2: Projected costs of different energy sources, 2010–2035

Figures 6.1 and 6.27 both highlight two common

26 Renewable Energy Potential in Nigeria

28 Renewable Energy Potential in Nigeria

7 Some key messages and

30 Renewable Energy Potential in Nigeria

2. Swift research that identifies appropriate priorities

32 Renewable Energy Potential in Nigeria

7.8 Key recommendations

Develop integrated renewable energy planning

Provide incentives for renewable energy uptake

Ensure sufficient and affordable capital

Improve public understanding of renewable

Cultivate collaboration between renewable