At SimmonsCooper Partners, we believe in a sustainable future and the power of renewable energy to make it happen. As we explore alternative energy sources, renewable energy shines as a solution to address climate change, protect the environment, and bring numerous benefits to individuals, communities, and the global economy. In this guide, we will provide you with an overview of renewable energy in Nigeria and how you can benefit from it.
What is Renewable Energy?
Renewable energy generally refers to energy derived from sources that do not deplete the earth’s resources and can be replenished or renewed naturally. By embracing renewable energy, we can tackle climate change and environmental degradation while enjoying numerous benefits for ourselves, our communities, and the global economy.
What is the current legal and regulatory framework for renewable energy in Nigeria?
The Electric Power Sector Reform Act 2005 (EPSRA) serves as the governing legislation for the electricity supply industry in Nigeria. It enables private sector participation in power generation, distribution, and related services. The Nigerian Electricity Regulatory Commission (NERC) establishes rules and policies to ensure a fair and efficient energy sector. The Rural Electrification Agency (REA) focuses on expanding the main grid, developing mini-grid systems, and promoting renewable energy. The agency also administers the Rural Electrification Fund (REF) to ensure equitable access to electricity across regions.
Aligned with the global shift towards renewable energy choices, the Nigerian government has recognized the importance of renewable energy in its Energy Transition Plan. This plan aims to achieve net-zero emissions by 2060 while providing energy for development, industrialization, and economic growth. As part of this plan, renewable energy is targeted to contribute at least 30 percent to the energy mix by 2030. The recently passed Climate Change Act 2021 (CCA) further demonstrates the government’s dedication to renewable energy and establishes the National Council on Climate Change to oversee climate change plans and resource mobilization.
Are there opportunities in the Nigerian renewable energy market?
The renewable energy sector in Nigeria is experiencing significant growth which is driven by the favourable framework established by the government and the support of international agencies and investors. Organizations like the World Bank, the African Development Bank (AfDB), and the International Finance Corporation are actively partnering with Nigeria on renewable energy projects. Exciting investment opportunities exist in solar energy, hydrogen, and electric vehicles as Nigeria aims to diversify its energy sources and reduce dependence on fossil fuels.
Are there any incentives for embarking on renewable energy projects?
To encourage renewable energy projects, the Nigerian government has implemented various incentives and policies. These include tax breaks, supportive regulatory frameworks, and funding for research and development. The Nigerian Renewal Energy and Energy Efficiency Policy (NREEEP) promotes attractive pricing for renewable energy projects. There are guaranteed markets, simplified licensing procedures, and waivers for smaller plants with a capacity of less than 1MW. The government has also incentivized the domestic banking sector and established financing mechanisms to support renewable energy investments.
Are these incentives National or State-Level Policies?
Renewable energy policies and incentives in Nigeria are primarily established at the national level. However, the responsibility for electricity generation, transmission, and distribution is shared between the national and state governments. This allows states to explore alternative energy sources and implement incentives to meet the energy needs of rural communities within their jurisdictions.
If you have further questions or need guidance on the renewable energy framework in Nigeria, our renewable energy team is here to help you navigate the market, identify the most promising projects, and ensure your investments align with your goals. Schedule a consultation with us and let us work together towards a sustainable future powered by renewable energy.