• Friday, July 12, 2024
businessday logo


Firms launch 10-year roadmap to bridge power supply gap in Nigeria

Firms launch 10-year roadmap to bridge power supply gap in Nigeria

…Targets 20GW from renewable energy

Rocky Mountain Institute (RMI) and the Global Energy Alliance for People and Planet (GEAPP) have unveiled a comprehensive roadmap which plans to tap into the over 20 GW market opportunity in Nigeria in 10 years.

According to the companies, this utility-enabled distributed energy resource presents a unique opportunity to address power supply challenges, grow the private sector developer footprint, improve service to customers and cut carbon emissions.

The report titled ‘Roadmap for Utility-Enabled Distributed Energy Resources in Nigeria’ was launched during a high-level GEAPP, Rockefeller Foundation, and SEforAll delegation visit to Nigeria’s successful energy transition projects.

Speaking at the launch of the report in Lagos, Wale Aboyade, Interim vice president for GEAAP work/ impact in Africa, said the roadmap shows how to grow distribution company (DisCo) revenues, cut carbon by 33 million tons of CO2e per year, and help close the power supply gap.

He said that through strategic business models indicated by the report, customers would benefit from reduced energy costs by displacing expensive, polluting fossil fuel generators, and renewable energy developers access a larger, more attractive set of project sites.

“The report comes on the heels of the announcement of the SDG7 Tracking Report findings that showed backsliding on the UN Goal of achieving universal access to sustainable energy by 2030”.

“With over 85 million people lacking access to energy, Nigeria is home to the largest number of unelectrified people in the world,” he said.

He further said that a lack of adequate and reliable power stifles development, adding that the IMF estimates that it costs Nigeria’s economy $29 billion each year.

“DisCos struggle to meet key performance indicators set by the Nigerian Electricity Regulatory Commission due to high aggregate technical, commercial, and collection (ATC&C) losses, non-cost reflective tariffs, and low revenue collections,” he said.

Joseph Nganga, interim CEO at GEAPP said, GEAPP is excited to collaborate with RMI to empower DisCos and developers to leverage this incredible opportunity that can help Nigeria attain its energy access and transition goals and pave the way for millions of Nigerians to be connected to clean, reliable, and affordable electricity.

“The numbers on energy access released this week are a wakeup call. This moment calls for strategic collaboration, and the deployment of innovative solutions and business models that can meet Nigeria’s and the world’s demands for clean energy,” he said.

RMI conducted a least-cost analysis revealing a substantial opportunity for distributed energy resource (DER) implementation across the country.

The data suggests a market opportunity of 1 Gigawatt annually for these 5 DisCos, equating to approximately 2 GW per year nationwide over the next decade for a total of more than 20 GW by 2033.

The roadmap estimates that deploying the required DER capacity to close the supply gap for all 11 DisCos presents an investment opportunity exceeding $14 billion over the next ten years only in generation assets, which scales to over $18 billion when including distribution network upgrades.

Suleiman Babamanu, Nigeria programme director of, Africa Energy Programme said with this new report, the five DisCos on board have a unique window of opportunity to reap the benefits of utility-enabled DERs by collaborating with private project developers and stakeholders.

Babamanu no longer need to see these new grid developers as competition but are collaborators through which DisCos can resolve longstanding power availability and reliability challenges in selected areas while bolstering revenues from increased energy sales and service charges.

He noted that this new collaboration and partnership would mean a more democratised power sector and a reduction in carbon pollution in Nigeria.

Utility-enabled DERs can reduce reliance on the national grid, reduce ATC&C losses, increase renewable energy share, reduce customer defection, and improve DisCo revenue collection.

By allowing DER developers to generate electricity and sell directly to customers with supply gaps, DisCos can better match local consumption and resolve distribution bottlenecks, creating a beneficial model for developers, utilities, and customers. DERs offer a win-win-win model for developers, utilities, and customers.