A report by the International Renewable Energy Agency (IRENA) has revealed that Nigeria is the highest importer of premium motor spirit (PMS) and diesel generators in Africa.
In the report titled ‘Renewable Energy Roadmap: Nigeria’ developed in partnership with the Energy Commission of Nigeria (ECN), IRENA also revealed that Nigeria’s on-grid generation is dominated by natural gas power stations at 86 per cent and large hydropower plants at 14 percent.
It, however, noted that operational performance of these power plants had been severely hampered due to unavailability of gas, machine breakdowns, seasonal water shortages, thus affecting power supply.
The report further pointed out that these power shortages have made many households and businesses resort to self-power generation, using diesel and gasoline generator sets as a backup with up to 84 per cent of urban households using backup power supply systems such as fossil diesel/ gasoline generators.
The report also showed that 86 per cent of the companies in Nigeria own or share a generator.
The report said in part: “Nigeria’s erratic power supply systems and the relatively expensive captive generation negatively impact the economy from the residential to the industry sector.
“Owing to the high costs of captive generation, households and small and medium-sized enterprises spend between two and three times more on kerosene, diesel and petrol than they do on electricity from the grid. In industry, government figures suggest that the cost of self-generating power makes Nigerian products approximately one-third more expensive than imports.”
The report said the Nigerian power sector will require substantially more investment to achieve a constant power supply.
“In terms of improving electricity access, around $34.5 billion in total investment will be required to provide electricity access to all households by 2030. The Transmission Company of Nigeria (TCN) suggests that rehabilitation and expansion of the grid will require an annual investment of $1 billion for the next ten years,” it added.
IRENA, therefore, emphasised the need for Nigeria to move towards renewable energy sources in place of domestic fossil fuels.
“The low penetration of variable renewables such as wind and solar shows the opportunity that lies in integrating them in the power sector given the substantial cost reductions of the technologies in recent years and the enormous natural resource that Nigeria has, especially for solar power,” it added.
