Nigeria Energy Situation

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Nigeria

Capital:

Abuja

Region:

Coordinates:

8.0000° N, 10.0000° E

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

923,770

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

223,804,632 (2023)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

46 (2023)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

362,814,951,696 (2023)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

1,621.12 (2023)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

60.50 (2022)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

-93.03 (2014)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

18.88 (2014)

Source: World Bank

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Introduction

Nigeria is a federal republic comprising 36 states and the Federal Capital Territory. The country has a surface of nearly 1 million km2 and a population of about 170 million growing at an average of 2% annually. The economy, heavily dependent on the export of oil products, grows at an average of 6% annually. The country enjoys a tropical climate in the south and central belt and an arid/semi-arid climate in the north. It is endowed with vast natural resources; oil and gas, solar (particularly in the north), hydropower (incl. 277 small hydro identified sites with a cumulative potential of 3,500 MW) and wind (mainly in the north and along the coastal line).

Energy Situation

According to the statistics from the International Energy Agency (IEA), total Nigerian primary energy supply was 118,325 ktoe (excluding electricity trade) in 2011. As depicted in the figure below, biomass and waste dominated with 82.2%. Renewable energy sources only accounted for a small share of the energy supply. For instance hydropower only accounted for 0.4%. Wind and solar are also utilized, but at a negligible level at present.
Figure missing
Actually, biomass is the dominant energy source in Nigeria due to the fact that most of the country’s population use it for cooking. According to Sustainable Energy For All (SE4ALL), little progress has been made with regards to providing access to non-solid cooking fuels since 1990. As visible in the figure below, in 2010, only 26% of the population had access to non-solid cooking fuels with a big difference between urban and rural areas.
Figure missing
As per the chart below, in terms of the distribution of the energy demand, in 2011, the total final consumption was 108,947 ktoe, of which the residential sector accounted for most of the energy consumed.
Figure missing

Electricity

With a marginal share of 2% in the total final energy consumption, electricity remains a secondary source of energy in Nigeria. Only about 9% of the household’s total energy consumption which, as previously shown, is driven by the use of biomass.
As of 2008, there were a total of 4,747,870 registered customers connected to the distribution grid. Electricity consumption from residential and commercial sectors represented 80% of the total electricity demand. The rest was covered by the Industrial, Street Lighting and Special Tariff sectors. The share of large consumers, such as industry or large commercial areas, only represented 1% of the total electricity consumption. As shown in the graph below, compared to the other West African countries, Nigeria’s electrification rates are relatively high, but have progressed at a relatively slower pace. In 2010, electrification rates were at 48% and had only increased by 5% since the early 1990s.
Figure missing
As it can be seen in the figure below, the gap between rural and urban electrification rates is lower than in other West African countries, but remains significant (Rural: 35% and Urban: 62%).
Figure missing
Access rates also vary substantially amongst the states of Nigeria. For instance, according to the projections of the Japanese International Cooperation Agency (JICA), Taraba State had the lowest electrification rate in 2010 with 21% and Lagos the highest with 96%. Out of the 13 states that registered the lowest electrification rates, 10 were located in the North-West and North-East. The 8 states with the highest electrification rates were located in the South-West or South-South. The table below presents an overview of the state of electrification per state:
Figure missing As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth). Other actors like the defunct Power Holding Company of Nigeria (PHCN) or or World Alliance for Decentralized Energy (WADE) et al. have also developed scenarios. The results of these studies vary widely, but they all conclude that the current gap between supply and demand is already very substantial (1:3) and that, it will continue widening if under a business as usual scenario.

On-grid Generation

State

Installed capacity increased by 5,600 MW over the period 1968 to 1991. However, the lack of significant investment in maintenance of the existing and in the construction of new infrastructure in the 1990s resulted in the decrease of capacity throughout the 1990s and 2000s. As of mid-2014, there were a total of 56 licenses for on-grid generation, 36 on-grid IPP licenses with a total on-grid generation capacity of 19,407 MW, mostly thermal generation installed in the South of the country where the oil and gas fields are located. However, out of this figure, only 11,774 MW have been built. Due to poor maintenance, only 6164.13 MW are currently available. Most of the generation capacity is based on natural gas. The share of large hydropower has decreased due to the Government’s focus on thermal. This trend is expected to continue in the future. The thermal/hydro mix is 85.5/14.5 for the installed capacity and 83.5/16.5 for the available generation capacity. Regular gas supply shortages, which are the result of vandalization and unattractive gas supply tariffs, further contribute to the reduction in the total available generation which was estimated at 3,600 MW in December of 2013. The table below includes the list of on-grid generation plants in Nigeria: Table missing

Challenges

As previously mentioned, the big gap between demand and supply, has led to recurrent power shortcuts. The fast growth in the power demand due to high demographic pressure and economic development make the task of bridging the gap even more challenging. The heavy reliance of Nigeria’s power sector on gas and the issues affecting the regular gas supply to the generation plants represent an additional challenge.

Plans and Potential

In order to bring a solution to this problem, the Government, in its Power Sector Reform Roadmap, sets the ambitious targets to increase installed hydro to 5,690MW, thermal over 20,000 MW, 1000 MW of renewable generation capacities by 2020. The targets also aim at diversifying Nigeria’s energy mix to reduce its gas dependence. As an emergency solution, many Electricity Distribution Companies (through Independent Power Producers – IPPs) and States are currently investing in embedded generation (medium scale generation, generally less than 20MW, directly connected to the distribution network). There are 3 licenses for embedded generation with a total installed capacity of 133 MW. Examples are the Eko Electricity Distribution Company that launched a bidding process for several IPP gas power plants below 20 MW or the Sokoto State Government that is in the process of finalizing the construction of a 38 MW diesel power plant (to be then converted into gas). Another example is NESCO, a company based in Plateau that has been operating a small-hydropower plant as an IPP since 1993 and from which the State Government buys electricity in bulk. Nigeria has vast oil (37.2 billion barrels as of 2012) and gas (5.2 trillion cubic metres as of 2012) resources that could be exploited to increase its generation capacity. As of mid-2014, four thermal power plants were being constructed: Calabar Generation Company Ltd (634 MW), Egbema Generation Company Ltd (381 MW), Gbarain Generation Company Ltd (254 MW) and Omoku Generation Company Ltd (265 MW). Other large gas power plants are being planned such as the 459 MW Azura Edo IPP or the 533 MW Qua Iboe IPP (QIPP) projects. Nigeria also envisages the use of its coal reserves to produce power. The country also aspires to generate power from nuclear. As shown in the table below, in addition, the country is endowed with vast renewable energy wealth which the authorities also intend to utilize for generation purposes. Table missing
A 10 MW pilot wind plant has been built in Katsina and is awaiting commissioning. One major hydropower plant is now under development, the Zungeru 700 MW plant in Niger State. A number of smaller hydropower plants are also being planned such as Gurara (30 MW) or Kashimbilla (40 MW). The 3,050 MW Mambilla hydropower plant project is currently being reviewed. In addition, NERC has issued licenses for 8 solar projects totaling a capacity of 868 MW and a 100 MW wind park. There are many prospectors interested in developing large solar plants.