Nigeria’s renewable energy industry enjoyed a remarkable level of success in 2022.
Some experts who spoke to Nairametrics attributed the successful adoption of renewable energy technology to some factors discussed below.
In the meantime, 2023 is projected to be an even more successful year for the industry.
Poor national grid performance combined with skyrocketing diesel prices
Olu Aruike, the Country Director at Husk Power Systems, told Nairametrics that Nigeria’s unreliable national grid as well as rising diesel prices propelled the solar mini-grid industry into the spotlight in 2022.
He explained further that mini-grids proved that they can do a much better job of providing clean, affordable, and reliable energy to off-grid communities, in a much shorter timeframe.
According to Aruike, companies like Husk grew quickly in 2022, and that pace will accelerate even faster in 2023.
Private sector investments
Chigozie Enemoh, the chief executive officer of Swift Tranzact, said that Nigeria’s Renewable Energy sector is ending 2022 on a high note because players in the industry have made significant progress in terms of investments.
According to him, players did tremendously well by attracting high levels of investment and projects to Nigeria in 2022. Companies like Engie Energy Access, Husk Power Systems, Shell, Darway Coast, Beebeejump, Greenvillage Electricity, Resource Energy, and many more, attracted over $200 million worth of deals to Nigeria’s renewable energy sector in 2022.
- However, the International Energy Agency (IEA) says that by 2030, annual spending on energy efficiency, electrification, and renewables for end users will be almost four times higher than today.
- According to the IEA, emerging and developing economies like Nigeria would need to grow at an annual rate of more than 25% for the rest of this decade to get on track for a net zero by 2050 pathway.
- Enemoh also told Nairametrics that with the launch of the energy transition plan (ETP) in August 2022 by Vice President, Yemi Osinbajo, industry players can also say that the government is beginning to show more interest in the renewable energy industry especially as it relates to achieving net-zero emissions with the country’s energy systems.
Public-private partnerships and programmes
The Director of Abuja-based Lumos laboratories, Ejikeme Nwosu, told Nairametrics that beyond private sector investments, the year 2022 experienced some level of public-private partnerships which could also increase renewable energy adoption in 2023. According to him, a solid combination of several public-private partnerships and programs were some of the events that capped Nigeria’s renewable energy sector in 2022. Some of these include:
- The July 2022 funding partnership between Lumos laboratories and renewable energy company, Hydrofuel Canada Inc.
- The October-November 2022 partnership between Lumos laboratories and the Federal Ministry of Environment to train youths on the generation of renewable energy from waste products to power households.
- The November 23, 2022, award of a urine-fertilizer invention patent right to Lumos laboratories by the Federal Government for the production of safe and NPK-rich organic fertilizer for Nigerians.
According to Ejikeme Nwosu, Nigerians will soon be able to make money from their waste products, as they will be paid a token to use the convenience.
On the flip side, Sustainable Energy Researcher and Advocate, Ifeanyi Ajuluchukwu told Nairametrics that although Nigeria has recently experienced a massive proliferation of renewable energy utilization, Nigeria is yet to completely maximize its demonstrated renewable energy resources. He highlighted the political reality that energy security will always take precedence over the net-zero plan as the reason why natural gas is rated above solar energy as the fuel to aid Nigeria’s energy security. He said:
- “This truth can be seen in Nigeria’s energy transition plan which launched in August 2022 and principally states that natural gas will be Nigeria’s only transition fuel. I believe this was the primary militating factor to renewable energy utilization in Nigeria in 2022 and could well be for many more years to come.
- “During the July 2022 Nigeria Annual International Conference and Exhibition (NAICE2022), Simbi Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) categorically said that there was no specific legislation yet on making solar part of Nigeria’s energy mix.
- “I am afraid Nigeria might have just become caught up in the habit of forging an ecologically responsible image in the global net-zero reckoning. One may also argue in Nigeria’s defence that Nigeria’s renewable shortfall is a result of a lack of capital to finance renewable projects. With the $350 million in loan from the World Bank to build a solar power grid by 2023 that will help generate power for hospitals, rural areas, schools, and households, it is safe to believe that we should begin to look forward to 2023.”
Key trends to expect in the sector next year
Aruike, quoted above, told Nairametrics that the key trends to expect in renewable energy for 2023 include:
- Solar mini-grids will start to power not only off-grid communities but also become a critical piece of the peri-urban power market through grid integration
- Local currency debt will become more widely available to mini-grid developers, which has been a major market gap.
- The use of mini-grids to scale agricultural productivity will increase.
However, some barriers that still need addressing are:
- The strengthening of the local supply chain for quality components and appliances (and reducing import duties until that happens)
- Further clarification within regulations on the relationship between grid and mini-grid.