By Chinenye Anuforo
A new report by the Rocky Mountain Institute (RMI) and Global Energy Alliance for People and Planet (GEAPP) has outlined a roadmap for unlocking a massive 20+ gigawatt renewable energy market in Nigeria. This ambitious plan, if implemented, could create a $20 billion opportunity over the next decade, revolutionizing the country’s energy landscape.
The plan was launched during the weekend at a high-level GEAPP, Rockefeller Foundation, and SEforAll delegation visit in respect of Nigeria’s successful energy transition projects.
“The roadmap outlined a specific plan to add 20 gigawatts of power generation capacity through mini-grid providers and the government is committed to getting everyone connected to the grid,” said Dr. Wale Aboyade, Interim Vice President for GEAPP in Africa.
Currently, Nigeria’s national grid can only handle 4 gigawatts, highlighting the need for a decentralized approach. The roadmap emphasizes mini-grid providers as a way to reach those in underserved communities who cannot afford individual solar solutions.
Reaching the 20-gigawatt target requires an estimated $13-14 billion investment. “This investment will create jobs, stimulate the economy, and benefit Nigerians in various ways,” Dr. Aboyade noted.
However, funding remains a major challenge. He stated that the Rockefeller Foundation is a key initial partner, but attracting further investment is crucial. “The roadmap seeks funding from a mix of sources, including the Nigerian government, domestic investors like banks and pension funds, and international development partners such as the World Bank and African Development Bank.”
Also speaking, Suleiman Babamanu, Nigeria Programe Director for the Africa Energy Program at RMI stated the government has already taken steps to create an enabling environment for investors saying that the recent legal reforms allow greater private sector participation in the electricity sector.
Continuing, he pointed out that several successful mini-grid projects already exist in Nigeria, demonstrating the model’s potential. But, insisted that collaboration between the government, investors, and development partners is key to overcoming challenges and achieving universal access.
Babamanu explained that the roadmap also emphasizes decentralized energy solutions like solar panels located closer to consumers.
“This approach reduces strain on the national grid and allows for faster electrification in underserved areas. The initial phase focuses on five pilot DisCos (distribution companies): Ikeja Disco, Kaduna Electric, Eko Distribution Company, Ibadan Disco, and Kano Electricity Distribution Company. These DisCos were chosen for their existing interest in renewables, geographic diversity, and commitment to the initiative. The program’s success will pave the way for expansion to include additional DisCos in the future,” he said.
Leveraging the momentum generated by initial “first-wave” utility-enabled distributed renewable energy systems projects, the roadmap shows how to grow DisCo revenues, cut carbon by 33 million tons of CO2e per year, and help close the power supply gap. Through these win-win business models, customers 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.
Closely collaborating with the five of 11 DisCos mentioned above, RMI conducted a least-cost analysis revealing a substantial opportunity for distributed energy resource implementation across the country. The data suggests a market opportunity of 1 GW annually for these five 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.
“DisCos have a unique window of opportunity to reap the benefits of utility-enabled DERs by collaborating with private project developers and stakeholders. By doing so, DisCos can resolve longstanding power availability and reliability challenges in selected areas, while bolstering revenues from increased energy sales and service charges,” said Ije Ikoku Okeke, RMI managing director of Catalytic Climate Capital and the Global South Program.
Reaching universal access will require a combined effort. The World Bank and African Development Bank have pledged $30 billion for electrification efforts in Africa, with a significant portion likely directed towards Nigeria. Other key partners include the Global Energy Alliance and Sustainable Energy for All.
“By working together, stakeholders can ensure that Nigeria achieves its ambitious goal of universal electricity access by 2030 through a combination of increased renewable energy investment and decentralized power generation solutions,” said Babamanu.