In 2018, and despite the best efforts of the President Buhari led administration, approximately 98 million Nigerians do not have access to grid-connected electricity largely because the financial health of the sector is below par. All 11 successor distributions companies (DISCOS) are unable to collect sufficient revenue to meet their full market obligations and as a result, the upstream sectors (transmission and generation companies, gas producers) do not receive full compensation for their costs.
For Nigeria to realize its full economic and social potential the country will require robust power infrastructure to deliver affordable, clean energy to all of its citizens, including those in rural areas and this can only be achieved by a review of our energy sustainability strategy.
Nigeria is currently at a crossroads in how it will pursue the development of its power infrastructure. In one breath, the typical power infrastructure lenders like the African Development Bank (AfDB) are advocating for multi-million dollar loans and grants to the power sector in order to support the deployment of massive generation, transmission, distribution, and off-grid projects. In another breath, there is an emerging ecosystem of private companies and non-profit organizations who are trying to bring power to more people through market-driven approaches such as energy efficiency.
Globally, energy conservation and efficiency remain a critical tool to relieve pressure on energy supply. A new approach involving a complex combination of advocacy, research and development, energy policy and urban planning will be required to surmount the challenge of promoting energy efficiency locally. To promote the more efficient use of energy in Nigeria, our national energy policies remain crucial. Yet, market-based methodologies can be an effective element to channel private decisions in the right direction.
A 2016 report published by the World Bank puts Nigeria’s power deficit at 94,500 MW, similarly a recent research conducted by Energy Savers Nigeria estimates that Nigeria’s electricity demand should hit 96,000 MW by 2020. This is largely due to growing population and urbanization. Even if the funding were to be available, it’s impossible to bridge the power infrastructure gap required to realize our national power availability expectations within such a short time frame. The solution, therefore, is to find ways to do more with less energy and this is why the energy conservation and efficiency conversation is most critical.
Many young Nigerians may have heard the familiar refrain from a parent or guardian: “switch the lights off, shut the door, you’re wasting energy”. A key component of this approach to efficiency involves getting consumers to use less energy through simple behavioral and lifestyle changes.
Today, many industry players and experts continue to cite access to capital as the most important barrier to the deployment of energy efficient technologies as simple equipment retrofits and upgrades often require high upfront investment; however, behavior-based energy efficiency does not face the same funding challenges as capital intensive upgrades.
Saving energy is cheaper and faster than making energy and it is my firm belief that energy efficiency investments do not only bring financial returns to investors they also create public benefits in terms of lower greenhouse gas emissions, increased employment and most importantly increased power availability.
It is for these reasons that the current administration and industry regulators must start to aggressively support and promote energy efficiency initiatives as a way to complement its efforts towards improving electricity access as outlined in the Power Sector Recovery Programme (PSRP).
The future of the Nigerian Electricity Supply Industry (NESI) looks bright. With the right leadership, vision and policies, Nigeria can use its power infrastructure deficit as an advantage as it leapfrogs to building the energy system of the future while connecting millions of people to modern electricity services. In order to achieve this vision, all stakeholders within the industry will need to learn to see the problem holistically and work together to solve it.
The author Moses Nasamu (@Mos_Hygh) is an Electrical Engineer and a certified Management Consultant who practices in Lagos Nigeria. He is currently an Executive Director at Energy Savers Nigeria, a Non-Profit Initiative that seeks to educate communities on the benefits of energy conservation and efficiency.
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