Navigating the paradox: sustainable energy development in the face of Nigeria's fossil fuel legacy

What happens when an unstoppable force meets an immovable object? A lot of us would remember this famous quote. This statement is a classic paradox called the “irresistible force paradox” and it rests on the premise of two incompatible facts. In the Nigerian energy sector, we are faced with this exact paradox.

With the increase in population and economic activities, inadvertently, the energy needs of Nigeria only keep increasing. Nigeria needs an urgent modernization of the energy sector. This is a well-known fact, and important discourses and projects have been kicked off to this effect. 

Challenges with the current state of the sector heavily involve infrastructure. One of the biggest issues with the energy sector is the lack of maintenance of current infrastructure and the development of new infrastructure to meet the increasing energy demands of the country’s growing population.

Challenges with the electricity infrastructure

1. Low electricity generation as a result of limited generation capacity: 80 percent of Nigeria's electricity generated is from gas-fired thermal power plants and despite holding the largest natural gas reserve in Africa, there is a shortage of supply to its thermal plants, which has limited electricity production. And, despite the country having an installed generation capacity of about 12,522MW, the current generation capacity hovers around 4,700 MW in 2023. 
2. The metering conundrum: A big part hindering the energy sector is the viability of the sector and this can be attributed to the liquidity crisis as a result of aggregate technical commercial and collection (ATC&C) losses. About 43% of Nigerians do not have electricity meters and this contributes significantly to annual ATC&C losses from distribution companies. Despite various interventions and programs targeted at closing the metering gap, there has been no progress and the problem only continues to grow. Examples of these interventions are Credited Advanced Payment for Metering Implementation (CAPMI) Scheme, the Meter Asset Provider (MAP) Scheme, and the National Mass Metering Program (NMMP). An in-depth analysis of this can be found here.
3. Transmission and distribution misalignment: This misalignment has hampered the optimal capacity delivery of energy and there needs to be a recalibration between all energy systems involved in energy delivery to energy consumers. Transmission systems need to be upgraded to meet capacity demands while distribution feeder systems need to be upgraded to take in full operational capacity of energy.  

Countering these challenges

To reduce the energy deficit and boost economic growth, alternative energy sources are being explored and one of the possible solutions is reducing the strain on the main grid by utilizing off-grid renewable energy. This is a viable option and would create the opportunity to finally solve important issues such as electricity access to unserved and underserved communities, improving productive energy use and energy efficiency. However, implementing off-grid renewable solutions also comes with its own challenges, especially for countries like Nigeria which are highly dependent on fossil fuel energy sources. Examples of such challenges include:

1. Project design: Energy access using renewable energy is not only about connectivity. Vulnerabilities due to natural hazards and potential hazards need to be considered. Off-grid renewable solutions need to be designed efficiently and systemically to provide the most reliable and affordable solutions. A one-size-fits-all approach is not feasible thus the need for specific designs and models to suit each location commercially and financially. 
2. Financial constraints: Implementing alternative sources of energy are expensive and exploring funding opportunities through Private-Public Partnerships (PPP) is necessary to address these constraints.
3. Inconsistent policies: There are currently insufficient supporting policies surrounding off-grid renewable projects in Nigeria, and this has created uncertainties which is a major challenge in terms of boosting investor confidence. An example of policies that can be implemented is the government providing more tax incentives for renewable project developers. 
4. Grid integration: Renewable energy has created an off-grid solution that will help bridge the gap and provide energy to underserved and unserved areas. A system needs to be put in place which enables renewable energy integration into the main grid. This will help build a symbiotic relationship that ensures the continuous viability of the country’s energy mix. 

These challenges are some of the most consistent issues present with adopting off-grid renewable energy solutions in Nigeria and this brings us back to the beginning of this article, the paradox. This is a question I have presented to industry stakeholders over time. 

Moving forward

There is a need to focus on improving the existing energy culture, which is fossil fuel-based, as an “immovable object”, and the global need to adopt renewable energy solutions as the “unstoppable force”. In your opinion, what do you think should be the main focus for Nigeria? Will the unstoppable force be stopped or will the immovable object be moved? 

Infrastructure development and the continuous use of readily available fossil fuels in solving Nigeria’s energy crisis would still benefit the country, as it helps increase the quality of power supply, the number of grid-connected energy customers, and energy access as part of development targets. However, it risks redirecting resources away from more sustainable infrastructure, delaying the clean energy transition, and deepening dependence on fossil fuels.