From Oil to Renewables: Nigeria’s Path to Sustainable Energy and Economic Growth

Curated by the Research Partnership Group (RPG) of Clean Technology Hub

Written by Okechukwu Ebuka Agbasi, PhD (August, 2024)

1. Overview

Nigeria, as Africa’s largest oil producer, has long relied on its petroleum sector as the backbone of its economy. Accounting for about 90% of export earnings and 60% of government revenues, the sector is undeniably critical to Nigeria’s macroeconomic and fiscal health. However, this heavy dependence on fossil fuels comes with significant environmental and socio-economic costs. The extraction, refining, and burning of petroleum products significantly contribute to greenhouse gas emissions, air and water pollution, habitat destruction, and health issues. In Nigeria, gas flaring and oil spills exacerbate these problems, causing climate change, acid rain, and contamination of the Niger Delta. Integrating renewable energy — solar, wind, and bioenergy — can mitigate these impacts, reduce emissions, and improve economic resilience, energy security, and job creation while aligning with global climate goals.

Nigeria’s energy landscape is characterized by a paradox: despite its abundant energy resources, the country faces significant energy poverty. With a population exceeding 200 million, Nigeria’s per capita energy consumption remains low compared to global standards according to SEfor All. The country’s energy consumption is dominated by traditional biomass and waste, which account for about 80% of the total energy use, primarily in rural areas where access to modern energy services is limited. This reliance on biomass, such as wood and charcoal, for cooking and heating has adverse health and environmental consequences.

Nigeria holds substantial oil and natural gas reserves, making petroleum products and natural gas significant components of the national energy mix. The electricity sector relies on natural gas-fired power plants, which contribute approximately 70% of the grid electricity, while hydropower accounts for around 30%. Renewable energy sources such as solar, wind, and biomass are still in the nascent stages of development and contribute minimally to the overall energy supply.

Figure 1: Potential of Renewable Energy Sources in Nigeria

2. Challenges in the Petroleum Sector

Despite its economic importance, Nigeria’s petroleum sector faces several challenges:

• Infrastructure Deficiencies: Aging infrastructure disrupts production, transportation, and refining, increasing operational costs and causing frequent breakdowns.
• Oil Spills and Environmental Damage: The Niger Delta suffers extensive environmental harm from oil spills, contaminating water, destroying land, and impacting local communities’ health.
• Gas Flaring: Nigeria’s high rate of gas flaring wastes energy and releases greenhouse gases, contributing to global warming and local air pollution.
• Regulatory and Governance Issues: Corruption and regulatory inefficiencies undermine sector performance, leading to inconsistent policies and discouraged investment.
• Economic Dependence and Market Volatility: Reliance on petroleum makes Nigeria vulnerable to global oil price fluctuations, causing economic instability.
• Energy Access and Distribution: Despite abundant resources, unreliable electricity supply and off-grid reliance on diesel generators persist.
• Security Concerns: Militant activities and sabotage in oil regions disrupt production and cause financial and environmental damage.

3. Economic and Environmental Benefits of Renewable Energy

Integrating renewable energy into Nigeria’s energy mix offers substantial economic benefits. Although initial capital costs for solar panels, wind turbines, and bioenergy plants are high, the long-term savings are significant. Renewable systems have lower operating and maintenance costs compared to fossil fuels. For example, solar PV systems, with minimal running costs, can last 25–30 years. As technology advances and costs decrease, renewables become more competitive with traditional energy sources. Additionally, renewable energy projects create jobs in construction, operation, and maintenance, addressing Nigeria’s high unemployment rates. A growing renewable industry can attract foreign investment and drive technological innovation, further boosting the economy.

3.1 Impact on Greenhouse Gas Emissions and Environmental Health

Adopting renewable energy in Nigeria offers substantial environmental benefits. The primary impact is a reduction in greenhouse gas (GHG) emissions, largely stemming from the petroleum sector’s fossil fuel combustion and gas flaring. Renewable sources like solar, wind, and bioenergy produce no direct GHG emissions during operation. This transition helps combat climate change, improves air quality by reducing pollutants, and promotes better health outcomes. Additionally, technologies like biogas digesters address waste management, turning organic waste into energy and minimizing environmental pollution, thereby supporting ecosystem and community sustainability.

4. Feasibility of Renewable Energy Sources in Nigeria

Nigeria is endowed with a wealth of renewable energy resources, ranging from solar and wind to hydro and biomass. However, the feasibility of harnessing these resources effectively is influenced by several factors, including regional variations, the scale of technology deployed, and the type of renewable energy considered. Understanding these nuances is critical to developing a sustainable and regionally tailored approach to renewable energy in Nigeria. The following describes this briefly.

• Solar Energy: Nigeria is exceptionally well-suited for solar energy development due to its geographical location, which provides abundant solar radiation throughout the year. The country experiences an average solar radiation level of 5.5 kWh/m²/day, with the northern regions receiving the highest solar insolation. This makes solar power a highly viable renewable energy source.
• Wind Energy: Wind energy potential in Nigeria is more varied. The wind speeds in Nigeria range from about 2 to 9.5 m/s based on reported data and the trend show that wind speeds are low in the south and gradually increases to relatively high speeds in the north. While these speeds are moderate, they are sufficient for small to medium-scale wind turbines. However, large-scale wind farms might face challenges due to lower wind speeds compared to global wind energy hotspots.
• Bioenergy: Bioenergy offers substantial potential in Nigeria, particularly through the use of agricultural residues, animal waste, and other organic materials. Biomass resources such as crop residues (e.g., rice husks, maize cobs), forest residues, and urban waste can be converted into biogas, bioethanol, and biodiesel. Anaerobic digestion and gasification are viable technologies for harnessing bioenergy, which can provide a reliable energy source while simultaneously addressing waste management issues.
• Hydropower: While large-scale hydropower has been a cornerstone of Nigeria’s electricity generation, the focus is now shifting towards small and mini-hydropower projects. These smaller installations can provide decentralized power solutions, particularly in remote and off-grid areas.

4.1 Assessment of Resource Availability and Technological Readiness

Nigeria’s renewable energy resources are diverse and promising. The country has significant solar potential with high irradiation levels and viable wind energy in coastal and northern regions. Biomass from agriculture offers a sustainable source for bioenergy, and there is notable potential for small-scale hydropower. Solar PV technology is well-established and relatively affordable, while wind energy is growing with international support. Bioenergy technologies are effective, though small hydropower needs better infrastructure and regulatory support. Challenges include high initial costs, inconsistent policies, limited technical capacity, and inadequate infrastructure. To overcome these, Nigeria should pursue policy reforms, foster public-private partnerships, invest in R&D, and enhance local expertise through training. Addressing these issues while seizing opportunities is key to expanding renewable energy adoption.

5. Technological Innovations and Infrastructure Adaptation

Nigeria’s transition to renewable energy leverages several current technologies for effective integration into both national and off-grid systems. Solar Photovoltaic (PV) Systems are the most widely adopted, with advances in efficiency and cost making solar power viable for urban and rural areas, especially through off-grid solutions like solar home systems and mini-grids. Wind Turbines, though less common, are emerging in coastal and northern regions, with hybrid systems combining wind and solar to enhance reliability. Energy Storage Systems, such as lithium-ion batteries, are crucial for managing the intermittent nature of solar and wind energy, ensuring stable power supply.

5.1 Future Technological Trends and Infrastructure Needs

The future of renewable energy integration in Nigeria hinges on several key technologies. Smart grids use digital technology to manage electricity flows, improving efficiency and accommodating more renewable sources by balancing supply and demand in real time. Advanced energy storage technologies, including flow batteries and solid-state batteries, offer greater capacity and stability, crucial for managing renewable energy fluctuations. Microgrids provide reliable power to remote areas by integrating renewable sources and storage solutions. Floating solar PV increases solar capacity without using land resources, while green hydrogen from renewable sources can decarbonize multiple sectors. To realize these technologies, significant investments in infrastructure are needed, such as upgrading transmission networks and enhancing grid resilience, along with robust regulatory frameworks and private sector incentives.

6. Way Forward

Nigeria’s petroleum sector, while economically beneficial, poses significant environmental and health risks, including greenhouse gas emissions from oil spills and gas flaring. These activities degrade ecosystems and harm public health. Despite abundant resources, Nigeria faces energy poverty, relying on traditional biomass and lacking modern energy access. The potential for renewable energy is promising, with viable solar, wind, and bioenergy resources. Small hydropower projects also offer solutions. Integrating renewable energy could reduce greenhouse gas emissions, lower costs, create jobs, and improve air quality, enhancing economic resilience and reducing dependency on volatile fossil fuels.

Future technological innovations and infrastructure adaptation are crucial. Key strategies include:

• Smart grids for efficient energy distribution.
• Advanced energy storage solutions.
• Development of microgrids for rural and remote areas.
• Implementation of floating solar PV systems.
• Exploration of green hydrogen technologies.

Significant investments in infrastructure, regulatory frameworks, and public-private partnerships are needed to support the transition to a sustainable energy system.

In summary, decarbonizing Nigeria’s petroleum sector through renewable energy integration is critical for achieving a sustainable, resilient, and low-carbon future, with substantial economic, environmental, and health benefits.

BIO: Dr. Okechukwu Ebuka Agbasi is a Petrophysicist and principal consultant at OKNA Geoservices Nigeria Limited. His expertise includes sustainable environments, oil and gas, environmental geophysics, and energy transition, and he is a member of CTH RPG.

Email Address: agbasi.okechukwu@gmail.com