Renewable Energy Potential in

Low-carbon approaches to tackling Nigeria’s energy poverty First published by the International Institute for Environment and Development 2012

Author Chris Newsom, Stakeholder Democracy Network

The SUNGAS project The SUNGAS project aims to catalyse development of Nigeria’s and markets through innovation, demonstration, policy dialogue and advocacy. Small demonstration projects for both renewables and gas-to-power will show that community-based energy facilities are technically viable, financially sustainable, and can ensure better access to modern energy services for rural communities. The project is funded by the European Union and is being implemented by the International Institute for Environment and Development (IIED), the Wetlands Centre (NDWC) and the Living Earth Foundation (LEF).

Disclaimer: This document has been produced with the financial assistance of the European Union. The contents of the publication are the sole responsibility of the SUNGAS project partners and can in no way be taken to reflect the views of the European Union.

The European Union is made up of 28 Member States who have decided to gradually link together their know-how, resources and destinies. Together, during a period of enlargement of 50 years, they have built a zone of stability, democracy and sustainable development whilst maintaining cultural diversity, tolerance and individual freedoms.

The European Union is committed to sharing its achievements and its values with countries and peoples beyond its borders.

For further information on the work of the European Union see http://ec.europa.eu/world/.

For further information on the SUNGAS project please contact:

Emma Wilson, International Institute for Environment and Development (IIED), 80–86 Gray’s Inn Road, London WC1X 8NH, UK. Tel: +44 (0)20 3463 7399; Fax: +44 (0)20 3514 9055 E-mail: [email protected]

Cover photo: Solar water pump, NDWC

2 Renewable Energy Potential in Nigeria executive summary Executive summary

Renewable energy has considerable potential in The cost per unit of power of renewable energy ($0.26– Nigeria, and could bridge the major energy gaps in 0.50/kWh) remains markedly higher than that of grid rural areas, particularly northern Nigeria. The scale of electricity ($0.10–0.15/kWh), which is the main reason opportunities is only just becoming apparent as new for subsidies and feed-in tariffs in most countries. grid technologies such as concentrated are Much of the planning and incentives overseas are based emerging as in competitors with conventional power around climate change commitments and trends where generation. the rapidly falling cost of renewable energy will make it competitive without subsidies within a decade. In Changes in technology also mean that solar power, with Nigeria, immediate renewable-energy competitiveness the correct financing, could bring transformational is more likely because reliance on generators and change to household energy needs. Robust small kerosene puts the real cost of energy needs in many lighting products starting at under $30 mean that areas at over $0.50/kWh. low-income households can benefit, although financing even modest capital costs remains an issue at all levels. Finance for renewable energy remains a huge issue Progress in lighting indicates advances that can be because the majority of costs for years of use are made in addressing other needs, given continuing incurred immediately at installation. The high cost of improvements in efficiency and affordability. loans in Nigeria, with interest rates over 20 per cent, is an immediate disincentive to energy investments The scale of renewable-energy potential is much which would recoup co