Nigeria is embarking on a transformative journey to reshape its energy landscape, aiming to diversify its energy sources, reduce reliance on the national grid, and bolster the stability and sustainability of its energy infrastructure. The cornerstone of this ambitious endeavor is a proposed investment of $122.2 billion over 21 years, spanning from 2024 to 2045. This substantial financial commitment signifies a determined shift away from the current dependence on hydropower and gas-fired thermal plants, embracing a more diverse and sustainable energy mix. The proposed investment signifies a recognition of the critical need to modernize and expand Nigeria’s energy infrastructure to meet the growing demands of its population and economy.
The strategic allocation of this investment targets a range of innovative and renewable energy technologies. Solar photovoltaic technology takes center stage, attracting a significant portion of the funds, followed by hydroelectric power projects. Natural gas projects, complemented by carbon capture, utilization, and storage technologies, also receive a dedicated allocation, reflecting a commitment to mitigating environmental impact. Furthermore, investments in energy storage initiatives underline the focus on ensuring grid stability and reliability, particularly with the increasing integration of intermittent renewable sources. The government will have to determine its source of financing for these investments.
This comprehensive plan aims to achieve a significant increase in installed electricity generation capacity, targeting 194 gigawatts by 2045, a substantial leap from the current 11 gigawatts. A major portion of this projected capacity will be derived from renewable energy sources, highlighting the government’s commitment to a cleaner and greener energy future. This ambitious target signifies a paradigm shift in Nigeria’s energy policy, emphasizing sustainability and environmental responsibility. The plan also aims to boost the transmission capacity nationwide with a $192 million investment over five years, from 2024 to 2028.
Recognizing the crucial role of transmission infrastructure, the plan addresses the need for significant upgrades to the national grid. The current network, burdened by outdated equipment and high technical losses, requires substantial investment to enhance its efficiency and reliability. The proposed investment in transmission infrastructure underscores the government’s understanding of the interconnectedness between generation and distribution, ensuring that the benefits of increased generation capacity can be effectively delivered to consumers.
The newly released 2024 Nigeria Integrated Resource Plan and the National Integrated Electricity Policy provide the framework for implementing these ambitious goals. These documents, awaiting approval from the Federal Executive Council, outline a holistic approach to addressing the challenges facing Nigeria’s energy sector. They aim to create a more robust and sustainable energy system, capable of meeting the country’s growing energy needs while minimizing environmental impact.
However, the path to achieving these ambitious targets is not without its challenges. The original targets for universal electrification and phasing out self-generation by 2030 have been extended to 2035 due to the challenges in the distribution sector. Despite significant improvements in electricity generation, the distribution network lags, hindering the efficient delivery of power to consumers. This delay in reaching the electrification goals not only represents a significant setback but also carries financial and environmental implications, potentially adding billions of dollars in costs and increasing carbon emissions. The challenge now lies in addressing the bottlenecks in the distribution sector and ensuring that the investments in generation and transmission translate into tangible improvements in electricity access for all Nigerians.
