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As the most populous country in Africa – a mineral rich continent – it is poignant to reflect of on the issues affecting the energy industry and the role of renewable energy technology for Nigeria. With renewable electricity as focus, the challenges of its deployment, as well as a review of existing commercial risks and policy instruments that could enhance the growth of industry are discussed in this article, with strategic recommendations proffered by comparing tested risk mitigation approaches and solutions that have been successful in other Countries across the globe.

  COUNTRY BACKGROUND AND ENERGY CONCERNS

Nigeria is situated in western Africa, with a Population of 182 million people mostly rural, and an annual growth rate of 3.5 % (NPC 2016) .

Nigeria’s economy is fossil fuel dominated. With the largest proven Gas reserves in the continent (OPEC 2016), about 40% of its national GDP, over 80% of government’s revenue and over 90% of Nigeria’s foreign earnings come from crude oil related activities. It is highly vulnerable to negative impacts of climate change along its large coastal territories, such as, degradation of agricultural lands, desert encroachment, depleting water resources and low agricultural output among others (Nigeria and Climate Change: Road to COP15).  If the current trend is unabated, the long-term impact will be catastrophic for the future of the country. (Akuru U.B., et al 2015)

 Nigeria’s Energy Mix

Nigeria has wide range of energy sources. Amidst inefficient energy conversion processes, leading to significant losses, and the fact that most primary fuels are exported for government revenues, creates a huge shortfall for local consumption, Nigeria paradoxically imports the fossil-fuel products it currently uses, despite being a leading oil and liquid natural gas producer.

Energy Production

Nigeria’s energy production in 2014 was 260.02 Mtoe (IEA 2014b). Around 80.7% of that was from biofuels and waste, while natural gas was 8.3%, oil  8.3%, and hydropower and other renewables had a significantly smaller share of about 0.3%. Most of the Oil and Gas produced are exported, as well as with a portion of the Hydro generation under long term agreements schemes, while the Biofuels/Waste energy generation are  mostly from local wood harvested in rural areas.

   Energy Consumption

Nigeria’s Energy Consumption was 116.5 Mtoe for same period, (IEA 2014b), with about 85.3 % of this coming from Biofuels and Waste and shown in Figure 2.1 below.

The  predominant proportion of biofuels and waste in Figure 1.2 can only be explained as use for cooking purposes, given that about 69.8% of much of Nigerian’s population depends on fuel wood for domestic and cottage industry purposes. This use of biofuels also accounts for the single largest factor for the change in the country’s vegetation and the increased desertification (ANFP 2006), the situation is compounded by the predominant use of inefficient cooking methods, based largely on open fire with obviously low thermal efficiency and associated smoke related ailments, especially among women and children. This further prompts the need for other forms of renewable energy.

Energy utilization is a core attribute of humanity. With increasing population also comes an increase in the demand for energy. The IEA in its World Energy Outlook, projects about 83% increase in global energy demand in the next 20 years (IEA 2014a). Although countries naturally turn fossil fuels as part of their energy mix due to its plentiful and reliable nature the same report reveals that there would be significant increase in renewables.

Aside the fact that fossil fuels are exhaustible, their combustion also has immense adverse effect on the climate with (GHG) emissions, capable of bringing the world to an abrupt end.  Already, the cost of renewable energy is dropping across several countries, as at 2014, new wind power was cheaper than new coal and gas power in Australia, China and the United States (Sussams, et al 2015). Electricity from roof-top photovoltaic systems is also cheaper than grid supply in many countries and places across the world. (Chen 2014).

Being naturally replenishing resources, the place of renewable energy in the global energy mix is sacrosanct, and tireless effort is required in a bid to perhaps completely transition from fossil fuels to renewable sources of energy.

As the most populous country in Africa – a mineral rich continent – it is poignant to reflect of on the issues affecting the energy industry and the role of renewable energy technology for Nigeria. With renewable electricity as focus, the challenges of its deployment, as well as a review of existing commercial risks and policy instruments that could enhance the growth of industry are discussed in this article, with strategic recommendations proffered by comparing tested risk mitigation approaches and solutions that have been successful in other Countries across the globe.

 COUNTRY BACKGROUND AND ENERGY CONCERNS

Nigeria is situated in western Africa, with a Population of 182 million people mostly rural, and an annual growth rate of 3.5 % (NPC 2016) .

Nigeria’s economy is fossil fuel dominated. With the largest proven Gas reserves in the continent (OPEC 2016), about 40% of its national GDP, over 80% of government’s revenue and over 90% of Nigeria’s foreign earnings come from crude oil related activities. It is highly vulnerable to negative impacts of climate change along its large coastal territories, such as, degradation of agricultural lands, desert encroachment, depleting water resources and low agricultural output among others (Nigeria and Climate Change: Road to COP15).  If the current trend is unabated, the long-term impact will be catastrophic for the future of the country. (Akuru U.B., et al 2015)

   Nigeria’s Energy Mix

Nigeria has wide range of energy sources. Amidst inefficient energy conversion processes, leading to significant losses, and the fact that most primary fuels are exported for government revenues, creates a huge shortfall for local consumption, Nigeria paradoxically imports the fossil-fuel products it currently uses, despite being a leading oil and liquid natural gas producer.

 Energy Production

Nigeria’s energy production in 2014 was 260.02 Mtoe (IEA 2014b). Around 80.7% of that was from biofuels and waste, while natural gas was 8.3%, oil  8.3%, and hydropower and other renewables had a significantly smaller share of about 0.3%. Most of the Oil and Gas produced are exported, as well as with a portion of the Hydro generation under long term agreements schemes, while the Biofuels/Waste energy generation are  mostly from local wood harvested in rural areas.

 Energy Consumption

Nigeria’s Energy Consumption was 116.5 Mtoe for same period, (IEA 2014b), with about 85.3 % of this coming from Biofuels and Waste and shown in Figure 2.1 below.

Nigeria's Total Energy Consumption By Resources 2014

The  predominant proportion of biofuels and waste in Figure 1.2 can only be explained as use for cooking purposes, given that about 69.8% of much of Nigerian’s population depends on fuel wood for domestic and cottage industry purposes. This use of biofuels also accounts for the single largest factor for the change in the country’s vegetation and the increased desertification (ANFP 2006), the situation is compounded by the predominant use of inefficient cooking methods, based largely on open fire with obviously low thermal efficiency and associated smoke related ailments, especially among women and children. This further prompts the need for other forms of renewable energy.