Nigeria has a population of over 183 million people An estimated 55 percent of Nigeria’s population have no access to grid-connected electricity. According to the Director-General of Centre for Management Development, Dr. Kabir Usman in Abuja in 2012, about 60 million Nigerians spend N1.6tn on generators annually.
In Nigeria, electricity generation, transmission and distribution account for less than one percent of its GDP but fifty-four percent (54%) of the share of utilities (e.g. electricity and water supply). The electrification rate in Nigeria is estimated at forty one percent (41%).
There is an opportunity for renewable energy in Nigeria. In order to successfully integrate in this sector, the government must create incentives for the renewable energy sector. The 2006 Renewable Energy Master Plan (REMP) commits Nigeria to short-, medium-, and long-term goals of development and implementation of renewable energy resources. Successful implementation should result in the installation of enough wind, solar PV, solar thermal, and hydroelectricity sources by 2025 to provide the equivalent of the entire grid capacity in use in Nigeria today. The master plan also stressed the need for exploring renewable energy in quantities, and at prices, that promote equitable and sustainable growth.
While Nigeria possesses an abundance of access to renewable energy sources and a master plan for renewable energy, the country is still behind in renewable energy development and usage. This may be attributed to the cost of renewable resources when compared to costs associated with fossil-based fuels. Increasing the amount of renewable energy requires that exploiting these resources be made economically attractive.
Interests in shifting renewable energy to mainstream sustainable development are recently growing, due in part to the expanding commercial markets for renewable energy that are shifting investment patterns away from traditional government and international donor sources toward a greater reliance on private firms and banks.
Nigeria’s fossil fuel-based economy will undoubtedly come to an end, searching for alternatives early is of utmost importance. With an abundance of renewable resources and growing government support, the ability for Nigeria to incorporate renewable energy into its power grid is increasing.
The present administration has expressed its commitment to pursuing and developing alternative sources of power, with a focus on renewable energy. With respect to the renewable energy market, the FGN introduced feed-in tariffs (FIT) as a tariff regulatory mechanism to accelerate investment in renewable energy sources. The FIT regime guarantees a stable price for electricity generated from renewables for a fixed duration, thereby securing adequate returns on investment.
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