Nigeria’s Power Reforms: Good News for Solar?

By Lanre Okanlawon

One of the best things happening to the power sector in Nigeria is the ongoing power sector reforms. Initially conceived by former President Olusegun Obasanjo in August, 2000 and currently midwifed by President Goodluck Jonathan, the economic importance of reforming Nigeria’s power sector cannot be understated.

According to Power Minister, Professor Chinedu Nebo, Nigeria seeks to provide quality and sustainable electricity supply to a good number of citizenry and is prepared to take in support from around the world towards revamping her power sector using various power technologies available. With this assertion, coupled with recent milestones achieved with regards to the reform’s road map, there seems to be an atom of hope for Africa’s most populous country after so many decades of erratic supplies and incessant power outages.

With a population of over 160 million people and a strong contender to take the number one spot as Africa’s largest economy, Nigeria’s current move to overhaul its power sector is seen by all as a step in the right direction. Developing countries like Nigeria require very large scale investments in their power sector to boost economic activities and improve living standards. But this level of investment is rarely provided by the public sector, hence the need for privatization and changes from business as usual.

For many years, Nigeria’s power sector has relied heavily on hydro-electric power resources and gas-fired thermal stations. Even despite having one of the world’s largest gas reserves, Nigeria has not been able to solve its power plague. According to the 66 page Power Reforms Roadmap document released by the Presidential Task Force on Power in August 2013 , “Nigeria has abundant renewable energy sources that should be exploited for energy security“.

In a world where every developed nation is obsessed with becoming more energy secured and independent, it is imperative that a more diversified and vibrant energy market needs to be created for Nigeria to attain its self acclaimed status. An evident power option for diversification, putting in mind recent technological advances, crashing prices and abundance of resource in developing countries like Nigeria, is solar energy. Tropical locations like Nigeria experience more than 330 days of sunshine for over 10 hours daily. Large scale solar farms could provide electricity to power hundreds of thousands of homes and businesses as currently in operation in some countries like Germany, Italy, the United States, Japan, China, Spain, France, Belgium, Australia, Czech Republic, United Kingdom, India and South Africa. Last year, Germany actually surpassed 30 Gigawatt of installed solar capacity in terms of electricity generation; the highest in the world.

Germany does not have as much sunlight as any country in Africa but it has been able to achieve this feat as a result of political will and the right mind-set and approach by acknowledging the fact that the solution to any country’s power predicament does not solely lie in any one particular energy resource but in the use of different power resources readily available in a sustainable and cost effective way.

With Nigeria’s enormous gas reserves, hydro-electric dams, abundant solar resource and fiscal wealth, more power plants can be built to augment existing ones to provide additional power to enhance trade, local industries and the overall socio-economic wellbeing of the nation.

There are also some regions with very unusual circumstances as they are not connected to the national grid, leaving distributed solar generation as one of their only plausible choices. Such localities should not be left out.

Over the years, the global power industry has witnessed significant developments and improvements in solar technologies which have inevitably resulted into more efficient and cheaper solar technology components; ranging from solar panels to inverters and solar charge controllers to even storage batteries. Prices of solar cells (which make up a solar panel) have crashed from $23.00/watt in 1980 to £0.50/watt in 2013, a staggering 98% decrease in price.

Apart from supplementing electricity generation, the emergence of a thriving solar power market in Nigeria will reduce the current burden on existing gas transmission facilities, stimulate job creation and increase regional trade within the continent.

With promising economic forecasts on Nigeria by prominent global institutions like the World Bank and the International Monetary Fund (IMF), sustained efforts by the government, policy makers and other stakeholders will be required to achieve sustainable electricity generation and its subsequent delivery. Partnering with the international community, engaging foreign and local power experts and creating constructive and stimulating energy policies for solar power such as the Feed-in-Tariffs, Renewable Obligation Certificates and tax breaks and incentives will definitely spur the government’s power diversification agenda.