What do you believe is the single most important factor driving up the cost of living in Nigeria?

With the nation still struggling with an unstable electricity supply, more people and companies are turning to alternate energy sources to meet their power needs.

As per the World Bank, South Africa, which has a population of over 60 million, bragged of 3,566 kilowatt-hours of energy usage per capita over the same period, while Nigeria, with over 200 million people, had 147 kilowatt-hours per person.

The Central Bank of Nigeria reports that in September 2023, the nation's average hourly data was 3,689.700 MWh. Considering this, the country is still facing challenges related to low power generation and inadequate distribution infrastructure.

The national grid failed 12 times in 2023, and on February 4 of this year, it collapsed for the first time this year. The generation companies attributed the failure to a shortage of gas.

STERLING BANK'S SOLAR ENERGY SHIFT

Nigerians must rely on diesel and gasoline power generators to meet their electricity needs due to the inadequate availability of electricity in the nation, which significantly raises operational expenses for businesses. The situation was made worse when the government eliminated fuel subsidies in June 2023, sending the average price of gasoline at the pump skyrocketing from N238.11 to almost N600 per litre. Nigerians are now compelled to rely on biomass and solar energy to meet their electrical needs.

The problem with electricity in the nation has gotten so bad that the Minister of Power, Mr. Adebayo Adelabu, recently threatened to show the way out of anyone who threatened the efficiency of the power sector to heads of agencies in the Nigerian Electricity Supply Industry.

At the end of a two-day ministerial retreat in Abuja on the theme of "Integrated National Electricity Policy and Strategic Implementation Plan: Navigating and Aligning on the Plan to Enhanced Electricity Reliability," the minister issued the warning.

"Like they say, the weakest link in a chain determines how strong it is. So, if anyone feels that our performance or delivery is in danger. As previously mentioned, before they show me the way out, we are also going to show the person the way out,” he added in our earlier discussion.

Over 40 per cent of Nigeria's population, or over 92 million people, do not have access to grid electricity, making the country a major challenger in terms of energy access, according to the Tracking SDG7's Energy Progress Report. Because of this, Nigeria now has the biggest global deficit in energy access.

Nigeria has a 13,000 MW electrical generation capacity, however less than 5000 MW of that power is sent to the system each day. Older transmission infrastructure and erratic gas supplies are the main causes of this.

As a result, a significant portion of the populace still uses pricey, hazardous fuel-powered generators to compensate for grid flaws.

Nigeria's energy demands in 2050 may be almost entirely satisfied by renewable energy sources, saving 40 percent of natural gas and 65 percent of oil, according to a recent research by the International Renewable Energy Agency.

According to Joy Ogaji, the CEO of the Association of Power Generation Companies, Nigeria has enormous potential for renewable energy.

She stated "427,000MW can be generated in Nigeria from solar alone. The country has solar radiation of 3.5 to 7.0 kWh/m2 per day."

Nigeria has 6.25 hours of sunshine each day on average, according to the Nigerian Meteorological Agency, which indicates there are many opportunities of utilizing solar energy.

"The increased acceptance of solar energy as a renewable energy source, along with continuous scientific improvements that enhance battery technology and photovoltaic capacity, are credited with the positive transition", according to the agency.

Nigeria's solar energy potential is predicted to reach roughly 6,500 terawatt hours annually, exceeding the country's current daily electricity output of about 3,570 megawatts, according to a recent statement made by Folake Soetan, the Chief Executive Officer of Ikeja Electric.

Soetan also mentioned Nigeria's wind potential, which is estimated to be 76 gigawatts, as a significant resource for the nation's production of renewable energy.

She went on to say that the renewable energy sector offers a huge chance to address Nigeria's power shortfall and simultaneously reduce greenhouse gas emissions due to the country's growing population and rising energy consumption.

As per a report by the International Renewable Energy Agency, Nigeria boasts of having one of the highest average daily solar radiation levels in the world, with 5.25 kilowatt-hours per square meter per day.

Due to issues like erratic grid access and expensive diesel generators, solar energy becomes an appealing and practical option for supplying electricity to both rural residents and urban/industrial consumers.

Nigeria's strategic policy project, the Renewable Energy Master Plan, aims to improve the country's energy security through the integration of renewable energy sources.

The country's share of renewable electricity is to rise from 13% in 2015 to 23% by 2025 and 36% by 2030, with the main objective of REMP being this increase.

The strategy focuses on diversifying the country's electricity mix and establishes targets for solar thermal, wind, biomass, hydro, and solar photovoltaic technologies in order to meet these objectives.

As a result, if the goals of the REMP are accomplished, it is anticipated that by 2025, 10% of Nigeria's energy needs will come from renewable sources, with solar energy being essential to this revolutionary development.

The Nigeria Distributed Access through Renewable Energy Scale-up project has received approval from the World Bank in order to improve 17.5 million Nigerians' access to clean energy.

In addition to significant extra investment from development partners, the project, which is being funded by a $750 million credit from the International Development Association, is anticipated to leverage over $1 billion in private capital.

Development partner contributions total $200 million from the Japan International Cooperation Agency and $10 million from the Global Energy Alliance for People and Planet.

According to experts, Nigeria's continuous reform initiatives are paying off, especially in the area of solar energy, where the nation is making notable advancements and seeing bright futures for its renewable energy sector.

Additionally, the Nigerian Electricity Regulatory Commission Mini-Grid Regulation is a crucial piece of legislation designed to secure renewable resources and improve access to energy in Nigeria.

The primary objective of the rule is to monitor and promote an atmosphere that is favorable for investments in the mini-grid industry, which is essential for hastening the nation's electrification process.

Nigeria is aggressively creating an environment that is conducive to the expansion of the off-grid industry by enforcing the NERC Mini-Grid Regulations, all the while maintaining the safety of developers.

The World Bank and the African Development Bank are funding the Nigerian Electrification Project, which is essential for encouraging off-grid and grid solar solutions in rural communities.

NEP obtained $350 million from the World Bank and an extra $200 million from the African Development Bank in line with the Rural Electrification Strategy. This money supported the Power industry Recovery Plan, which aims to increase private investment in the energy industry.

As alternate sources of power, interest and awareness have grown, according to Mr. Sola Oguniran, CEO of Synenet Solar.

According to Oguniran, the increase in fuel prices had led to a greater increase in patronage, and more Nigerians were now aware of and curious about alternative energy sources.

The primary concern, he clarified, is the upfront installation cost. Nevertheless, he added, solar energy providers have developed an installment payment plan that allows Nigerians to select their preferred payment schedule and have solar installed in their homes, workplaces, and factories.

He went on to say that as a result, more people in the nation were using solar power.

He emphasized, however, that because the majority of solar panels were imported into the nation, solar enterprises were also dealing with the issue of foreign exchange.

Oguniran claims that the high dollar to naira exchange rate has also had an impact on solar panel producers.

To meet their electrical needs, more Nigerians are turning to alternate energy sources despite the growing expense of importing solar panels.

Finally, Nigeria has had to make a big transition to alternate energy sources, especially solar power, due to its ongoing problems with electricity delivery. With significant solar and wind resources, the nation's enormous renewable energy potential offers a game-changing chance to address its ongoing power shortfall. This transformation is being driven in large part by strategic policy initiatives like the NERC Mini-Grid Regulation and the Renewable Energy Master Plan. Millions of Nigerians would have better access to electricity thanks to these initiatives, which also seek to diversify the country's energy mix and increase energy security.

The World Bank, the International Development Association, and other development partners have provided substantial finance, which has been crucial in creating a climate that is favorable to investments in renewable energy. These programs are essential for closing the energy gap as well as for advancing environmental sustainability by lowering greenhouse gas emissions linked to the use of fossil fuels.

Thanks to new financing choices and technological improvements, solar energy is becoming more and more popular, which is a sign of a healthy trend towards more sustainable energy sources. Notwithstanding obstacles like exorbitant upfront installation costs and exchange rate fluctuations that impact the price of imported solar panels, Nigerians' growing cognizance and enthusiasm for renewable energy is heartening. The nationwide adoption of solar systems has been further aided by solar companies' offering of flexible payment arrangements.

Nigeria is getting closer to achieving energy security, lowering its reliance on expensive and ecologically damaging fuel-powered generators, and supplying steady electricity to its expanding population as it continues to adopt renewable energy options. Nigeria is on a promising route to a more resilient and sustainable energy future with the current reforms and investments in the renewable energy sector. Nigeria has the potential to use its plentiful renewable resources to drive its development and raise the standard of living for its people provided it remains committed and adopts a strategic approach.