RENEWABLE ENERGY IN NIGERIA: A PEEP INTO...

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ISSN: Applied (FEBRUARY 2015, issue 1 volume 1)

For Citation: Onifade, T.T.2015. Renewable Energy in Nigeria: A Peep into Science, A Conclusion on Policy. IJISBT, 1, 49-

72. Available at: http://wwhsdc.org/ijisbt/articles/

RENEWABLE ENERGY IN NIGERIA: A PEEP INTO SCIENCE, A CONCLUSION ON

POLICY

Temitope Tunbi Onifade

Lecturer, Sustainable Resource Management, Division of Social Sciences, Grenfell Campus, Memorial

University of Newfoundland, Canada.

[email protected]; [email protected]

Abstract

Many scholars and other stakeholders trace environmental problems facing many oil-rich jurisdictions

to the current fossil fuel energy regime that oil-dependent economies rely on. In a quest for ways to

reduce environmental problems, an examination of the situation and prospects of renewable energy as a

complement, and where possible an alternative, to fossil fuel in an oil-dependent jurisdiction such as

Nigeria is necessary. The literature on renewable energy and related topics has not sufficiently

answered questions on why renewable energy has failed to thrive despite the interests governments have

shown in it. Nigeria’s renewable energy sector can succeed only if stakeholders develop jurisdiction-

specific policy frameworks addressing current renewable energy challenges. A peep into the scientific

literature on renewable energy reveals facts and figures specific to different geographical zones in

Nigeria, informing the right course of action for renewable energy policy and business in the country.

Nigeria has commercially exploited hydropower and commenced exploiting solar energy, but has not

exploited wind energy, bioenergy, and geothermal energy considerably despite their prospects across

the geographical zones of the country. Nigeria should fill this gap by developing suitable jurisdiction-

specific policy instruments and institutional frameworks.

Keywords: renewable energy; policy instruments; regulatory institutions; Nigeria

http://wwhsdc.org/ijisbt/articles/

mailto:[email protected]

mailto:[email protected]

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1. Introduction

Nigeria is blessed with resources that it can exploit for developing Renewable Energy (RE). The

major RE resources that the country has tapped are hydropower, solar energy, wind energy and

bioenergy. The potentials of some other resources such as geothermal, nuclear energy, waves, tidal

energy, and ocean thermal gradient still remain untapped and unqualified (Nnaji et al. 2010: 35). With

vast land resources, moderate wind power and varying heat degrees across the country, every part of the

country can efficiently and effectively host renewable power with the right regulatory frameworks in

place. This article argues that the success Nigeria can achieve in exploiting its enormous RE resources

depends on its policy framework, and provides policy indications suitable for developing RE in Nigeria.

It answers questions on why the RE industry has not thrived in Nigeria despite the interest the

government has shown in it, and the type of policy instruments and institutions suitable for a RE regime

in the country.

The paper proceeds in five parts. The first part comprising this introduction provides the research

context, question, and thesis. The second part peeps into the science of RE, highlighting its sources and

capacity in Nigeria while revealing clues for developing the sector. The third part justifies the science-

policy interface on RE matters in Nigeria, identifying policy concerns and issues. The fourth part links

the science of RE to its policy, highlighting relevant policy principles and provisions in the Nigerian

regulatory system. The fifth part concludes the paper.

2. Peeping into the Science

Nigeria is endowed with vast RE resources well distributed throughout the country (Akinbami 2001:

155; Idris et al. 2013: 11). The main sources of RE in Nigeria are hydropower, solar energy, wind

energy, bioenergy and geothermal power. The nature and distribution of these resources vary across the

geographical divides of the country, and the country has exploited them at different levels.

A. Hydropower

Hydropower supplies about 40% of the total electric power in Nigeria (Awogbemi & Komolafe

2011: 163). Its primary source is large rivers such as Niger and Benue and their several tributaries and

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natural falls possessing high hydropower potentials for the country. These large rivers constitute the core

of the Nigerian river system and offer a renewable source of energy for large scale hydropower above

100 MW (Idris et al 2013: 12). Several sources of small rivers and streams also exist within the present

split of 11 river basin authorities, some of which maintain minimum discharges all year round (Vincent-

Akpu

2012: 3). Governments and the private sector can harness these sources for small-scale

hydropower projects which Idris et al. (2013: 12) estimate at less than 10 MW.

Research estimates the total technically exploitable large scale hydropower potential of Nigeria

as over 10,000 MW, capable of producing 36,000 GWh of electricity annually, from which only about

one-fifth of this potential had been developed as at 2001 (Idris et al. 2013: 12). Scientists carried out a

study in 12 states and four river basins and identified over 278 unexploited small hydropower (SHP)

sites with total potentials of 734.3 MW (approximately 734 MW) (compare data by Idris et al. 2013; and

Aliyu & Elegba 1990). One should note here however that hydropower sites are not limited to the areas

under those studies as suitable sites exist in virtually all parts of Nigeria with an estimated total capacity

of 3,500 MW (Vincent-Akpu 2012: 3). As at 2012, hydropower accounted for about 29% of the total

electrical power supply (Vincent-Akpu 2012: 3).

The Nigerian Electricity Supply Company (NESCO) and the federal government have installed 8

small hydropower (SHP) stations with an aggregate capacity of 37.0 MW, most of which one would find

around Jos at Kwali and Kurra Falls (Vincent-Akpu 2012: 3). As at 2010, Okafor and Joe-Uzuegbu

(2010:211) estimated the total technically exploitable hydropower potential Nigeria had based on its

river system to be about 11,000 MW, out of which stakeholders were only tapping and developing about

19%. These rivers, waterfalls, and streams with high potentials for hydropower, if properly harnessed,

will lead to a decentralized use of RE resources, and provide the most affordable and accessible option

of off-grid electricity services especially in the rural communities.

Despite its potentials, hydropower faces some problems in Nigeria. Developing and employing

hydropower in Nigeria suffers financial, physical and management disadvantages. Financial

disadvantages appear in form of huge debts, management disadvantages take the form of corruption, and

physical disadvantages show themselves in form of droughts and reduced energy generation as well as

harm to wild life and human ecosystems (Vincent-Akpu 2012: 3). Policy and regulatory systems that

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actors design for hydropower in the country must therefore be ones that do not only increase the

exploitation of hydro resources and production of hydro energy from them but also ones that address

these problems. This will encourage private sector participation while providing good guidelines for

doing business in the sector.

B. Solar Energy

Research shows that Nigeria lies within a high sunshine belt and as a result solar radiation is

fairly well distributed within the country (Idris et al. 2013: 12). Idris et al. (2013: 12) estimate that the

annual average total solar radiation varies from about 12.6 MJ/m per day in the coastal latitude to about

25.2 MJ/m2 per day in the far North. Vincent-Akpu (2012: 3) shows that there is an average solar

radiation of about 19.8 MJm –2 day-1 and average sunshine hours of 6hrs per day. Solar radiation

intensities range from 3.5-7.0 KWhm per day and sunshine duration ranges from 4.0 to 9.0 hours per

day (Idris et al. 2013: 12). Uzoma et al. (2011:1) show that if solar collectors could cover one percent of

Nigeria’s land area, Nigeria would generate 1850 x103 GWh of solar electricity per year. These findings

reveal that Nigeria has huge potentials for solar energy.

Nigeria exploits solar energy resources. Solar collectors or modules are perhaps the RE devices

most Nigerians encounter. Vincent-Akpu (2012: 4) establishes that Nigerians have installed several PV-

water pumping, electrification, and solar-thermal installations at various places in the country; in the

North with extreme heat, the Sokoto Energy Research Center (SERC) and the National Center for

Energy Research and Development (NCERD) under the supervision of the Energy Commission of

Nigeria (ECN) have undertaken several pilot projects, surveys, and studies to power daily domestic and

industrial activities including cooking, crop drying, incubation, and chick brooding with solar energy.

Such projects have also received attention at low and medium investment levels for activities such as

water pumping, village electrification, rural clinic, and schools’ power supply, vaccine refrigeration,

traffic lighting and lighting of road signs (Vincent-Akpu 2012: 4). Solar sources are particularly useful

in agriculture, for both subsistence and commercial practice. Farmers and other stakeholders employ

them for activities such as crop drying, poultry production, chicken brooding, chicken growing, manure

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drying, and swine production (Yohanna & Umogbai 2010). However, the rate at which stakeholders

employ solar energy for these activities vary across the country based on solar distribution and intensity.

Solar energy remains popular in Nigeria. When one takes a stroll around the streets, one sees

street lamps and roofing materials having solar devices; we find them in private houses, moderate to big

companies, and government infrastructures. Every level of government in the country has attempted to

harvest solar energy. Despite the interests stakeholders and business enterprises have shown in this

source of energy, it is yet to experience any significant development. While it is clear that solar energy

development has not been consistent because its resources vary across the country, it is not yet settled

whether there are more financial constraints than policy gaps. It seems safe to conclude that the sector

experiences a combination of both: the current level of technology for exploiting solar energy is not

business-friendly, and there are policy and regulatory gaps. This paper leaves further inquiries into these

findings to future research.

C. Wind Energy

Nigeria has wind energy resources. Vincent-Akpu (2012: 3) reveals that wind is available in

Nigeria at annual average speeds of about 2.0 m/s at the coastal region and 4.0 m/s at the far northern

region. With air density of 1.1 kg/m3, the wind energy intensity perpendicular to the wind direction

ranges between 4.4 W/ m2 at the coastal areas and 35.2 W/ m2 at the far northern region (Sambo 2009:

15). In addition, Nigeria has an annual average wind speed of I0m heights and it varies from 3m/s in the

coastal areas to 7m/s in the far North having less vegetation (Idris et al. 2013:12). As far back as early

1960s, a few number of stand-alone wind power plants were installed in 5 northern states mainly to

power water pumps and a 5 kW wind electricity conversion system for village electrification at Sayyan

Gidan Gada in Sokoto State (Uzoma et al. 2011: 1).

Despite these resources, Nigeria had no commercial wind power plants connected to the national

grid as at 2012 (Vincent-Akpu 2012: 3). In an attempt to revive this source of RE in Nigeria, scientists

have conducted studies to assess the wind speed characteristics and associated wind energy potentials in

different locations in the country, leading to attempts by the Sokoto Energy Research Centre (SERC)

and Abubakar Tafawa Balewa University to develop capability for the production of wind energy

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technologies (Vincent-Akpu 2012: 3). So far however, the country has not developed a commercial and

business-friendly wind energy sector. The reasons for this low rate of development are similar to the

ones for solar energy: expensive technology not appealing to business, and inadequate policy

frameworks.

D. Bioenergy

Bioenergy is energy that one derives from biomass. Vincent-Akpu (2012: 4) reveals that Nigeria

is rich in biomass resources including crops, forage grasses and shrubs, animal wastes and wastes

arising from forestry, agriculture, municipal and industrial activities, and aquatic biomass. Of these,

Nnaji et al. (2010: 35) identify crops such as sweet sorghum, maize, and sugarcane as the most

promising feedstock for bio-fuel production. Vincent-Akpu (2012: 4) sums up the suitability of other

biomass brands for energy production and their advantages as follows:

Plant biomass can be utilized as fuel for small-scale industries. It could also be fermented

by anaerobic bacteria to produce a cheap fuel gas (biogases). Biogas production from

agricultural residues, industrial, and municipal waste does not compete for land, water

and fertilizers with food crops like is the case with bioethanol and biodiesel production

and, will reduce the menaces posed by these wastes. In Nigeria, identified feedstock

substrates for an economically feasible biogas production include water lettuce, water

hyacinth, dung, cassava leaves and processing waste, urban refuse, solid (including

industrial) waste, agricultural residues and sewage.

Vincent-Akpu’s contribution reinstates the fact that one derives biomass from biological organisms.

Biomass’ resources produce bioenergy, and may seek them from domestic and industrial wastes (Audu

& Aluyor 2012). Many biological wastes or byproducts are readily available in both rural and urban

communities in Nigeria, making their acquisition cheaper than other forms of RE resources. This

establishes that bioenergy is viable for rural areas in Nigeria, and rural areas constitute the larger part of

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Nigeria. Exploiters can also enhance bioenergy through recycling and composting schemes, making

further resources available for developing biomass.

Emphasizing the foregoing point, Vincent-Akpu (2012: 4) estimates that Nigeria produces about

227,500 tons of fresh animal waste daily, making it possible for the country to produce about 6.8 million

m3 of biogas every day. He illustrates further that since 1 kg of fresh animal waste produces about 0.03

m3 biogas, then Nigeria can potentially produce about 6.8 million m3 of biogas every day from animal

waste only (Vincent-Akpu 2012: 4). Other biomass resources that Nigeria has exploited include sawdust

and wood wastes. Small particle biomass stoves already exist for burning sawdust and wood shaving

(Vincent-Akpu 2012: 4).

Experience has shown one that researchers and other stakeholders have continued to work on

policy and regulatory aspects of exploiting these resources to produce biogas in Nigeria. For example,

some scientists have done research on reactor designs that would lead to process optimization in the

development of anaerobic digesters (Vincent-Akpu 2012: 4). This further underscores the potentials of

bioenergy in Nigeria, and the effort researchers are making to exploit them. Whether or not the research

provides any level of improvement is beyond the scope of the instant paper.

Despite the potentials of biomass in Nigeria, the country currently limits its investment on this

energy resource to thermal fuel for cooking and crop drying (Vincent-Akpu 2012: 4). There is no

considerable use of biomass for large-scale energy production. Also, some commentators have accused

bioenergy for its potentials of reducing food sources because it employs food stock as its energy

resource (Vincent-Akpu 2012: 4). In many Nigerian communities, food stock that many people may

otherwise regard as remains provides food for many poor people. The food stock that biomass employs

for energy production may also form the bulk of food resources available for domestic animals, and the

production of organic fertilizer for farming; one may secure evidence supporting this line of argument

by visiting local farms around the country. The concerns that this article has expressed concerning

bioenergy resources necessitate regulating how actors sanction the use of food resources for bioenergy.

Regulatory institutions should monitor policies governing both food production and bio-energy

development.

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E. Geothermal Power

Nigeria has not developed geothermal energy but some scholars speculate that there may be

potentials for geo-pressured systems and hydrothermal systems in basins such as Benue through the

Niger Delta (Adegbuyi et al. 1990). A survey of energy sources in the literature and other empirical

evidence however reveal that Nigeria is yet to take this source of energy seriously. The country does not

include it among the energy sources it considered in the Vision 2020 National Technical Working Group

on Energy Sector (see National Technical Working Group on the Energy Sector 2009). Many other

sector-specific and jurisdiction-specific energy conferences have not considered geothermal sources; for

example, the Nigerian Alternative Energy Expos which the Ogun State government has sponsored do

not take geothermal energy seriously. For these reasons, federal, state and local governments should

initiate policies that will enhance research on geothermal potentials in the country. This recommendation

is more important to the Southern part of Nigeria with basins and other specifics peculiar to geothermal

power.

3. Policy Issues and Concerns

While it is not an issue whether or not Nigeria has shown commitment to RE, it remains

unsettled whether the commitment that the country has given to it is sufficient to make it effectively and

efficiently enter the existing energy market. Nigeria has given RE policy commitments, but these

commitments have not encouraged the development of RE resources across the various geographical

regions of the country in the most beneficial and business-friendly manners. The attention the country

has given to RE has not been from jurisdiction-specific and subject-matter specific perspectives:

government policies and regulations have not sufficiently considered the strengths and weaknesses of

specific geographical zones’ RE resources, and the regulations that will suit such resources in the said

jurisdictions. These are issues that the literature needs to discuss more.

Also, despite the fact that Nigeria is well endowed with RE resources that offer sustainable

alternatives to petroleum and has shown commitments to developing them, it has left them largely

untapped (Lagos State Ministry of Energy and Mineral Resources. Jan., 2012). As at 2009, Ajayi (2009:

35) concluded that replacing fossil fuel with RE is the ultimate goal in Nigeria, but stakeholders were

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not realizing the goals because fossil fuel accounted for 80% of global energy demand with the result

that it was not possible for RE to replace it and sustain even a basic standard of living. The author

continued that although the volume of RE was increasing at an enormous rate, it was still being

outstripped by rising energy demands (Ajayi et al. 2009: 35). The lessons Ajayi’s findings present are

important for redefining policy frameworks that will enhance business prospects as well as effectiveness

and efficiency in the RE sector.

Nigeria’s energy sector has relied largely on petroleum and fuel wood, and some input from

hydropower. As at 2008, the energy consumption mix in Nigeria was dominated by fuel wood (50.45%),

petroleum products (41.28%) and hydro-electricity (8%) (Omokaro 2008: 55). Apart from hydro,

Nigeria has neither fully explored nor developed other RE resources such as coal, nuclear, geothermal,

tidal, wind and solar energy forms. While wood constitutes a RE resource, Nigerians have employed it

in a manner that is not environmental-friendly, as fuel wood that produces carbon. This leaves hydro as

the only RE resource that Nigeria has exploited in a fairly ideal manner consistent with environmental-

friendly principles to a reasonable extent. Apart from RE resources that this paper has identified that

Nigerians employ in a manners not friendly to the environment, other sources of RE have either been

neglected, not discovered or at their early stages of development (Ajayi et al. 2009: 35).

Comparing the findings of Ajayi et al. above with the empirical situation in Nigeria reveal some

lessons. Ajayi et al. were correct only to the extent that rising energy demand outstripped RE despite

the latter’s increase. Their assertion that replacing fossil fuel with RE is the ultimate goal in Nigeria is

unfounded, somewhat hasty and lacking sufficient supporting empirical evidence. What this paper posits

is that governments at different levels and the private sector have given RE a considerable level of

attention recently. Notwithstanding the increased level of attention however, current policy frameworks

and instruments do not suggest that stakeholders have prioritized RE.

Unlike countries such as China, India, and Brazil, Nigeria is yet to fully exploit the benefits of

RE. Awogbemi and Komolafe (2011) are of the opinion that Nigeria has not been fully exploited RE

partly due to ignorance and partly due to high cost of the conversion technologies involved. As at 2009,

renewable sources constituted 90% of the energy that the country’s rural population used (Sambo 2009:

15). However, one should note the point this paper has made, that the manner with which many

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Nigerians use RE is not environmental friendly. This is true of Sambo’s figure as well, because many

people in the rural areas depend on RE resources for food, housing, and other daily needs, hence

exploiting them in non-environmental friendly manners.

Concerning RE potentials in Nigeria, scientists commercially researched RE technologies mainly

relating to solar photo voltaic (Solar PV) development and usage as at 2005 (Sambo 2009: 13). The

survey reveals that a total of 33 companies, established within 1999 and 2009 as vendors or contractors

for the supply and/or installation of solar-PV equipment and systems, were active in Solar PV. Local

industries do not manufacture major solar-PV system components such as module controllers, inverters

and solar batteries. Local Nigerian manufactures only produce standard electrical components such as

cables, switchgear, overload protectors and consumers’ units (Sambo 2009: 14).

Hope is not lost as RE continues to develop in Nigeria. As at 2013, the International Renewable

Energy Agency (IRENA) estimated RE projects from both government and private sectors in Nigeria.

IRENA gave the summary as follows: 10 MW of wind capacity addition by 2012 (1 project), 2,930 MW

of hydropower capacity addition announced (3 projects), 80 million litres of biodiesel per year capacity

addition announced (1 project), 225 million litres of ethanol per year capacity addition announced (4

projects), 5 MW of biomass-fired capacity addition announced (1 project), 10 MW of dispersed solar

photovoltaic projects (for water pumping, street lights and mini-grids), 10 MW of wind capacity

addition by 2012 (1 project), 2,930 MW of hydropower capacity addition announced (3 projects), 80

million litres of biodiesel per year capacity addition announced (1 project), 225 million litres of ethanol

per year capacity addition announced (4 projects), 5 MW of biomass-fired capacity addition announced

(1 project), 10 MW of dispersed solar photovoltaic projects (for water pumping, street lights and mini-

grids) and the Kwale Clean Development Mechanism (CDM) project which was registered in Nigeria in

2005 (International Renewable Energy Agency [IRENA] 2013).

Investigations continue on the potentials of RE resources in Nigeria. RE research and

development centers of the ECN organized conferences at some selected Nigerian universities where

participants developed several prototypes of RE products and devices including solar cookers, solar

dryers, solar water heaters, solar stiles, PV applications, biogas digesters and stoves, and wind electricity

converters, most of which were ready for mass production and commercialization (Sambo 2009: 14).

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The ECN produced the RE master plan in 2005, serving as a blue print for developing the RE sector in

Nigeria.

4. Policy Principles and Provisions

Nigeria mainly regulates RE with non-law policy instruments. This is because most of the laws

covering RE issues in Nigeria have other mainstreams. These laws either have RE as a secondary target

or have inadequate scopes to sufficiently cover RE concerns. This research also discovers that there is

no primary government ministry or agency saddled with the exclusive regulation or/and development of

RE in Nigeria. The significance of these points is that RE currently largely receives indirect legal

support, although there are other policy instruments directly addressing its concerns. These are matters

requiring closer attention in the literature.

A. The Nature of RE Policy Instruments

One can largely associate the low rate at which RE develops to the absence of an efficient and

effective regulatory framework. The situation is difficult in Nigeria because the country currently lacks a

specific institution or statute focusing on RE (Sambo 2009: 24). The laws available only indirectly relate

to RE, although other non-law policy instruments directly address RE issues. Due to the absence of

reliable enforcement status such as the one people associate with laws (as against the obligatory status

that other non-law policy instruments have), state actors need to develop compliance frameworks that

will boost RE and its prospects.

Since the United Nations Conference on Environment and Development (UNCED) 1992

otherwise called the Rio conference, Nigeria has taken indirect steps in promoting RE and RE projects,

as the country’s policy and legal frameworks would reveal. Being a statute, the Electric Power Sector

Reform Act 2004 has been the most authoritative policy instrument supporting the development of RE.

Due to a dearth in statutes giving sufficient support to RE, policy statements and plans have become

popular instruments that the country employs for supporting RE development. So far, the FGN has

produced them as both environmental policy instruments, indirectly, and direct RE policy instruments.

These policy instruments include the Nigerian National Policy on the Environment 1999, National

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Electric Power Policy 2001, National Energy Policy 2003, Renewable Energy Master Plan 2005, RE

Policy Guidelines 2006, Biofuel Policy and incentives 2007, Nigerian Millennium Development Goals

(MDG) 2000, the National Economic Empowerment and Development Strategy (NEEDS) 2003-2007,

and the IRENA statute ratified in 2010. While most RE policy objectives and principles have become

obvious mainly in the country’s electricity industry, not until the 2005 Master Plan and the 2006 policy

guidelines did RE become a substantial part of the national power planning process. Nigeria is currently

developing a comprehensive Rural Electrification Policy and Strategies that meet international standards

and best practices ( Efurumibe et al. 2014:74).

The most insightful statute giving indirect support to RE is the Electric Power Sector Reform

Act(EPSR) 2005. The National Electric Power Policy (NEPP) 2001 is the precursor to the EPSR Act

2005. The EPSR contains most of the earlier provisions of NEPP. The Act liberalized the electricity

sector and the duo of the Nigerian Electricity Regulatory Commission and the Rural Electrification

Agency. The Act emphasizes the role of renewable electricity in the overall energy mix, especially for

expanding access to rural and remote areas. In Part IX under Rural Electrification, Section 88 (9)

stipulates that information shall be presented to the President by the Minister of Power and Steel on,

among others: (a) expansion of the main grid, (b) development of isolated and mini-grid systems, and (c)

RE power generation. The EPSR has created business opportunities in the RE sector, and has presented

a framework that gives grid access to not only large scale RE production but also small to medium scale

RE producers especially in rural areas. However, the Act lacks sufficient concession schemes which

would encourage investment in RE; it does not provide special and exceptional fiscal and regulatory

support incentives for RE, making it difficult for investors to shift to RE in view of competitions with

other energy sources in the market.

The Nigeria National Policy on the Environment 1999 is the most comprehensive environmental

protection document lending support to RE. It provides that the goal of the policy on the environment is

to achieve SD in Nigeria, and in particular to: secure a quality of environment adequate for good health

and wellbeing and to conserve and use the environment and natural resources for the benefit of present

and future generations (Ladan 2009: 24). Ladan (2009: 24) lays down the strategies for achieving these

goals as follow:

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(1) Implementing a detailed Environmental Impact Assessment (EIA) on all

planned energy projects backed by a detailed baseline ecological data

against which subsequent environmental changes and/or impacts can be

measured;

(2) Developing a rational National Energy Utilization Master-Plan that

balances the need for conservation with the utilization of premium energy

resources for premium socio-economic needs;

(3) Encouraging the use of energy forms that are environmentally safe and

sustainable, particularly solar energy;

(4) Promoting and encouraging research for the development and use of

various locally available energy sources especially non-conventional

resources such as geothermal, solar, wind and other complex forms of

hydrocarbons other than oil and coal.

This paper finds all the strategies sound and the last three insightful. The last three recommendations

support the development and use of RE sources for creating a balance between energy needs and

environmental protection. They encourage the use of environmental sound technologies for power

generation unlike current fossil-fuel technologies that dominate the industry. They also encourage using

locally available RE resources for energy, and recognize conservation of resources as the hallmark of

energy and environmental sustainability. This article adopts these recommendations.

More direct RE policies contain important provisions addressing RE interests. The policy

overview of the National Energy Policy (NEP) describes its purpose as the “optimal utilization of the

nation’s energy resources for Sustainable Development”. The policy mandates the government to

harness hydropower, solar, biomass and wind energy potentials available in the country for electricity

generation. The policy on hydropower states that enterprises should harness hydropower in an

environmental-friendly manner, and advocates promotion of private sector and indigenous participation

in hydropower development in order to, among other objectives, increase the percentage contribution of

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hydro-electricity to the total energy mix, conserve non-renewable resources that stakeholders use for

generating electricity, diversify the energy resource base, and limit potential ecosystem damage arising

from hydropower development. The policy desires that stakeholders develop the science and technology

they employ for solar, wind and biomass energy generation and/or conversion.

The Renewable Energy Master Plan 2005 is also an important policy instrument in the RE

discourse. Produced with support from the United Nations Development Plan (UNDP), the document

articulates Nigeria’s vision for achieving SD and the road map for achieving the RE content of the

National Environmental Policy 2003. The federal government launched it in 2005. It contains the

following programmes with short, medium and long term targets: National Biomass Energy Programme,

National Solar Energy Programme, National Hydropower Programme, National Wind Energy

Programme, Emerging Energy Programme, and Framework Programme for Renewable Energy

Promotion. It articulates issues that are common to other subsectors such as legal, regulatory and

institutional frameworks, incentives (financial and fiscal), capacity building (human and infrastructural),

inter-agency/governmental collaboration, research and development, monitoring and evaluation, and RE

portfolios and feed-in-tariffs.

Other policy instruments for developing RE include National Energy Master Plan 2003 which

developed strategies for improving the energy sector and has considerable provisions on RE

development, Renewable Energy Policy Guidelines 2006 which created directives for developing

support policies for RE, Nigerian Biofuel Policy and Incentives 2007 which articulates using ten percent

ethanol (E10) and twenty percent biodiesel (B20) as automotive fuels and was approved by the Federal

Executive Council in 2007, Rural Electrification Policy which targets how rural areas could develop

their electricity resources especially while employing renewables, Nigerian Millennium Development

Goals (MDGs) 2000 which features how Nigeria could achieve sustainable development (SD) and

reduce poverty by employing RE, the National Economic Empowerment and Development Strategy

(NEEDS) 2003-2007 which projected how Nigeria could improve economic welfare including energy

interests which RE could provide, and the International Renewable Energy Agency (IRENA) Statute

2010 embodying RE development guidelines which Nigeria ratified.

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Although these energy reforms and the national resources expended on RE development in

Nigeria in the last 11 years are substantial, the total amount of RE investment is still insignificant when

one compares it to the amount governments at different levels and other stakeholders allocate to

conventional energy sources (petroleum) servicing less than 40% of the population (Vincent-Akpu 2012:

5). Meanwhile, RE presents the most efficient and effective means for achieving SD, integrating

community level scale energy goals with large scale industrial interests. Moreover, RE by its nature

reconciles developmental goals and environmental concerns, creating a balance between the two.

For RE to integrate development and environmental protection interests successfully, it needs

better regulatory frameworks than what it currently has. Ladan (2009: 13) emphasizes this point as

follows:

Sustainable development in developing countries can hardly be achieved

without rural applications of efficiency and renewable energy, thus

underscoring the necessity for a dynamic and efficient legislative and

regulatory system. All such regulatory systems must require a number of

tasks to be performed: as an exercise of policy-making. The goals of rural

applications of efficiency and renewable energy regime must be

established; those goals must then be translated into the principles and

rules that control behavior of the principal actors; and there must be

procedures for explicating and enforcing the principles and rules and for

the adjudication of disputes arising from them.

At a general level, there are already RE goals across environmental and energy-related policy

instruments and laws. To specifically cater for RE interests effectively however, policy instruments need

to prescribe rules of behavior for stakeholders and procedures for enforcing them. These rules should

also provide for dispute settlement procedures and suitable adjudicatory systems. These are minimum

features that one would expect in any regulatory system that may successfully integrate RE into the

current energy sector.

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Scholars have addressed some issues on what the nature of renewable energy principles should

be, presenting lessons that one may draw from. For example, Emodi et al. (2014) have addressed the

issues of standards for renewable energy technologies; Chukwu et al. (2014) address issues concerning

the training and capacity of engineers generally; and Abam et al.(2014) discuss issues of resource

structure and sustainable development policy. Despite these attempts, there are other issues that need to

be clarified on what the nature of goals that promote RE should be, and how realistic the goals should

be.

The goals of renewable energy principles should be ideals that could drive realistic RE support

models. They should be statements of what ought to be, assuming all things are equal. While it does not

matter whether jurisdictions can fully achieve these ideals, it does matter that these ideals are feasible

and realistic. Their purpose is to guide rule-making and innovation in RE development. These goals

would guide and drive the policies and laws that suit RE support models. If jurisdictions comply with

the goals, they have the prospects of producing idealistic but yet realistic policy frameworks for RE.

One hopes that the federal, state, and local governments will pursue ideal principles for

developing renewable energy within their jurisdictions. They should look into the possibility of

codifying some of the principles for guiding the behavior of stakeholders. Codifying the principles as

rules in statutes makes the standards and rules of engagement that they set for actors and stakeholders

enforceable. The proposed codification should embody rules and principles that sufficiently address RE

issues in the context of development and environmental protection interests.

B. What Roles Should Regulatory Institutions Play?

A regulatory framework that aims giving efficient and effective support to RE should design not

only suitable regulatory objectives and rules but also well suited regulatory institutions that can enforce

them. These requirements are cumulative such that they should happen together. Ladan (2009: 26)

illustrates this point:

…regulations and energy policies have a direct impact on the success of

energy markets generally, market participants and stakeholders, as well as

65


products and services. However, the exact nature and scope of this impact

will depend on how effective the implementing agencies or institutions

are. Regulatory institutions can either promote or defeat the goals of

regulatory policy captured in legislation or regulations.

Regulatory institutions should be able to push regulatory policies. The purpose of the institutions should

be to promote the policy goals, and drive the policy instruments. Where regulatory institutions fail to do

these, they become ill-equipped for ensuring that RE succeeds in existing energy markets that petroleum

resources already dominate.

In order to consider the roles regulatory institutions play in RE development better, one needs to

draw practical examples from the electricity industry which is currently the biggest energy sector in

Nigeria engaging RE. The jurisdiction to establish a legal and regulatory framework for power

generation, which may be pro-RE such as the one that establishes a legal requirement to make

proportionate purchases of RE or one that stipulates a Feed-in Tariff (FIT) for RE, is largely within the

purview of the Federal Government of Nigeria (FGN), acting through its regulatory agency, the National

Electricity Regulatory Commission (NERC) (see Federal Government of Nigeria [FGN] 2004: section

13 as against section 14, and schedule Part II Item F; see also Lagos State Ministry of Energy and

Mineral Resources 2012: 6, 11). Similarly, the power to legislate on a fiscal and investment regime for

RE such as one creating key incentives for promoting utility-based electricity from renewable sources is

largely within the jurisdiction of the FGN (Lagos State Ministry of Energy and Mineral Resources 2012:

6). The FGN regulates the activities of the electricity industry, particularly the activities of operators that

connect to the national electricity grid which the Transmission Company of Nigeria (TCN) controls, and

this regulation is instrumental in the general energy sector as it largely affects the sector’s performance

(Lagos State Ministry of Energy and Mineral Resources 2012: 6).

Again, the FGN is solely responsible for legislating on incomes and capital gains taxes in

Nigeria, and it has the legislative authority to prescribe fiscal incentives and tax concessions for RE

companies in Nigeria. Fiscal and financial concessions and support determine the success of many

business ventures because investors are mainly interested in profit margins. These facts make the roles

66


of the federal government important in the process of designing implementation strategies for RE

business. This is not to say that state and local governments do not have roles to play.

The constitution of Nigeria vests the legal basis for off-grid electrification on rural areas falling

in each state of the federation (FGN 2004: Part II, section 14; Ladan 2009: 26). Commentators believe

that the government expects rural areas to generate off grid power from RE resources (Ladan 2009: 26).

State governments are expected to establish electric power stations within their states to generate,

transmit, and distribute electricity to areas not covered by the national grid system (FGN 2004: Part II,

section 14). State governments are also to take part in implementing monitoring schemes at the

grassroots (FGN 2004: Part II, section 14; Lagos State Ministry of Energy and Mineral Resources 2012:

9-11)

This article acknowledges the important roles state and local governments play at the municipal

level as they are the closest to the people. State and local governments can help promote RE at the

grassroots, thereby reducing environmental hazards that are closest to the people. As environmental

justice proponents usually argue, the poorest people suffer the most in environmental violations. While

this point presents further issues that may be relevant for knowledge in this area, this study focuses on

the roles of the federal government since many Nigerian state and local governments have different

policy approaches.

There is currently no single federal government institution (as well as state government and local

government institutions) with the mandate to solely regulate the RE industry in Nigeria. Nigeria does not

give RE technologies that could, in principle, meet almost all its energy needs such as solar power, wind

power, geothermal energy, and wave power any specific regulatory prominence (Ladan 2009: 32). The

institutions that perform regulatory roles in the RE subsector have mandates that are too broad, making

them unable to fully support RE interests.

Nigeria established the ECN by Decree No. 62 of 1979, amended by Act No.32 of 1988 and Act

No. 19 of 1989, later codified as Energy Commission of Nigeria (ECN) Act No. 109, Laws of the

Federation of Nigeria (LFN) 2004 (Energy Commission of Nigeria [ECN] 2013). ECN commenced

operation in 1989 after the meeting of the Heads of States of the Economic Community of West African

States (ECOWAS) in 1982 at Conakry where the participants made a declaration that each member state

67


should establish an agency called “Energy Commission” and charge it with the responsibilities for

coordinating and supervising all energy functions and activities within the country.

Nigeria established the ECN as an agent of the FGN responsible for the strategic planning and

coordination of Nigeria’s policies on energy in all its ramifications (ECN 2013). The ECN is also

responsible for overseeing energy resources in Nigeria including RE (UNDP 2010: 14). Its mandate

covers specific areas including making strategic energy plans, coordinating policy and monitoring

performance in the entire energy sector, laying down guidelines on the utilization of energy types for

specific purposes, and developing recommendations on how to exploit new sources of energy (UNDP

2010: 14). What one learns here is that ECN has broad mandates on RE, but other areas which its

jurisdiction covers serve as distractions to specific RE interests it may have. Interestingly, the Nigerian

National Petroleum Corporation (NNPC) also created a Renewable Energy Division (RED) in 2005,

saddling it with a mandate to midwife the birth of RE initiatives in furtherance of the dictates of the

Kyoto protocol. There is yet to be any evidence of considerable contributions that this department has

made to the development of RE.

With Nigeria establishing the ECN and lately the Renewable Energy Division (RED) of the

Nigerian National Petroleum Corporation, institutional support for RE ought to be a done deal in

Nigeria. Apart from regulatory institutions and other state actors, non-government stakeholders are also

showing interests in developing RE. For example, One Sky Network has been organizing workshops and

seminars in order to sensitize Nigerians on the benefits of RE and thus making a case for the use of RE

(Efurumibe 2013: 11). Nonetheless, the failures RE continues to experience despite these developments

show that loopholes still exist. Many of these loopholes relate to not only policy instruments, but also

prevailing institutional frameworks. This paper has addressed many of these loopholes, and believes RE

will profit if Nigeria’s decision makers adopt its recommendations.

5. Conclusion

Despite the institutional challenges that this paper has identified, the gestures of the Nigerian

federal government so far show the interest it has in diversifying the energy sector. The central question

that remains unanswered is on the reasons for the low ebb at which RE develops despite the increased

68


interests the FGN and other stakeholders have shown in it. This paper has made some attempts in

answering this question, associating the problem to not only institutional defects but also the entire

policy system.

Nigeria has considerably exploited hydropower and commenced exploiting solar energy, but has

not exploited wind energy, bioenergy, and geothermal energy considerably despite their prospects in

different geographical areas of the country. State actors should enact RE statutes providing for

integrative development schemes for RE. Such schemes should consider the manner with which RE

resources exist in different geographical zones in Nigeria, while considering the interests the local levels

up to the federal level of government have. State actors should not consider the factors determining the

design of RE policy instruments without putting in mind how renewable resources would affect the

people’s needs. This will enable them put in place appropriate mechanisms for mitigating possible spill-

over effects on food and other needs. In addition to prescribing the rules of behavior, the statute should

also provide compliance mechanisms that will ensure enforcements.

RE policy instruments should create more incentives and concessions for investors. The current

schemes do not place RE fairly alongside its petroleum counterpart which has enjoyed incentives for

many years. Considering the environmental advantages RE has, increased government incentives will

cushion the current exorbitant capital investment requirements many commentators have associated with

RE technologies, hence encouraging the private sector to invest in RE. Fiscal and financial incentives

should cut across business stages, from incorporation to production. However, actors should support

production-based incentives more because they guarantee productivity.

The last recommendation is that federal, state, and local governments should establish

institutions that focus on RE. These institutions should have clear mandates and jurisdictions. To avoid

overburdening them with responsibilities, they should not implement actual RE projects. Instead, they

should focus on regulation, while streamlining actual business involvement and development processes.

They should ensure that stakeholders adhere to the provisions of policy instruments and the rules of

behavior that the instruments provide. They should follow up on productivity in the RE subsector, and

make necessary recommendations for modifications or/and improvements from time to time.

69


If state and non-state actors adopt the recommendations this paper has set out, the chance of RE

entering existing energy markets will increase significantly. These recommendations will also influence

existing policy frameworks enormously, and may lead to reducing the support petroleum currently

receives in relevant statutes. Enacting new statutes focusing on RE may also necessitate altering other

statutes relating to many sectors including energy, environment, finance and business. Jurisdictions

within Nigeria may also need to restructure existing public institutions and/or establish new ones.

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