Nigeria is a significant player in the global energy market, primarily due to its substantial crude oil and natural gas production. The country also boasts extensive, largely untapped coal deposits and promising hydroelectric power generation prospects. Nigeria’s energy mix consists predominantly of fossil fuels—including coal, crude oil, and natural gas—alongside renewable sources such as hydro, solar, and wind energy.
Among those advocating for change in the sector is Winifred Eziafakaego Owunna, a rising star and author of Empowering Nigeria’s Energy Revolution. This comprehensive work explores Nigeria’s critical transition from fossil fuels to renewable energy, emphasizing that such a shift is optional and essential for sustainable development. The book will be launched on November 29, 2024, at the 100th Power Dialogue.
Natural gas accounts for approximately 86 percent of Nigeria’s electricity generation, with hydroelectric power contributing around 12 percent. The remainder is primarily sourced from local oil plants, while less than 1 percent comes from reverse-flow LNG imports. Despite its wealth of energy resources, Nigeria’s energy sector has had a limited positive impact on the quality of life for its citizens.
A significant portion of energy resources is exported raw, resulting in minimal value addition and local utilization. Fossil fuels dominate the sector, making up about 80 per cent of total primary energy consumption, while biomass accounts for an additional 18 per cent.
In 1972, through Decree No. 24, Nigeria established the National Electric Power Authority (NEPA) to oversee the electricity industry. During the tenure of former President Olusegun Obasanjo, the government initiated reforms by unbundling NEPA through the Electric Power Sector Reform Act (EPSR Act).
This led to creating the Power Holding Company of Nigeria (PHCN) in March 2005 as a transitional structure. In 2013, the EPSR Act further facilitated the privatisation of the power sector, aiming to improve efficiency and reliability in the supply of electricity to Nigerians. The Act provided a roadmap for these reforms, with the primary goal of ensuring that the electricity supply is adequate, reliable, and affordable for all citizens.
Empowering Nigeria’s Energy Revolution highlights a gradual policy shift from reliance on traditional fossil fuels to promoting renewable energy. This transition was initiated with the Ministry of Power’s publication of the Renewable Energy Master Plan in 2006 and solidified by establishing a dedicated Renewable Energy Division in 2010.
Despite these efforts, Nigeria faces a daunting electricity deficit of 45 per cent, with access to electricity growing at just 1.1 per cent compared to a population growth rate of 3 per cent. This gap creates significant energy challenges that affect access, availability, and consumption, ultimately hindering many citizens’ socio-economic development and quality of life.
Affordability remains another critical issue in Nigeria’s energy sector. Many states struggle with funding crises that exacerbate budget deficits, while heavily regulated electricity prices complicate the situation further amid a devalued Naira.
The electricity market operates under substantial subsidies, and investments in energy efficiency and rural electrification encounter multiple obstacles, including limited access to affordable capital and the operational challenges faced by Nigeria’s distribution companies (Discos). Issues such as load shedding, inconsistent billing, and infrastructure inefficiencies hinder progress.
Despite its abundant energy resources, Nigeria’s energy sector grapples with inadequate supply, poor infrastructure, high consumer costs, and subpar performance. These challenges manifest as power system instabilities—such as voltage fluctuations, harmonics issues, and transformer overloads—all impeding economic development.
Empowering Nigeria’s Energy Revolution underscores the urgent need for Nigeria to address the dual challenge of meeting growing energy demand while alleviating energy poverty, particularly in the health, education, and agricultural sectors.