As of 2024, Nigerians have endured enormous difficulties due to drastic increases in Electricity rates, which in some urban locations have increased more than 240%. Certain customers saw rates jump from ₦66 to ₦225 per kilowatt-hour. This increase in electricity prices has increased the financial distress households face as they continue to confront rising costs of living. Increased electricity prices have become unaffordable to many, with concerns for household essentials such as food and healthcare. The indexed increase in electricity prices has adverse effects on low income households, compounding and increasing existing disparities and pushing many Nigerians into poverty. The financial burden of electricity bills have also led to social unrest, where citizens view electricity increases as unjust, especially considering the epileptic Power Supply in Nigeria.
Additionally, the increase in tariff has negatively affected businesses, specifically small and medium-sized businesses that operate on thin margins. With increased electricity Tariffs driving the cost of doing business in Nigeria higher, many of these businesses have had to raise the prices of their goods and services, causing further pressure on Nigerian consumers. In some instances, jobs have been lost and Investment in the Economy has declined, exacerbating the Unemployment crisis. All of these issues have compounded in such a way as to lower the quality of life for the average Nigerian, and have even rendered some individuals completely unable to achieve a basic standard of living despite working, or pay to access key goods and services within health care and education.
UN aid sought for energy crisis; Nigeria aims for net zero by 2060.
Faced with the current energy crisis, the Federal Government has sought international support from the United Nations to address Nigeria’s ongoing power challenges. During a discussion session with international participants sponsored by the United Nations Development Programme (UNDP) and the United Nations Office for Project Services (UNOPS), Minister of Power, Chief Adebayo Adelabu, explained Nigeria’s aggressive energy objectives. The Minister outlined a multi-pronged strategy intended to address the challenges facing the electricity supply industry and put it on a path toward recovery and growth.
The Federal Government is aiming toward ‘Net Zero’ Emissions by 2060, with an interim target of 30GW of grid energy supply and a 30% Renewable Energy mix by 2030. In the long term, the goal is to achieve universal energy access. The UN’s role is expected to be in the form of providing technical assistance, capacity building facilitation, and/or financing plans to achieve the various ambitious goals. The Minister insisted that this is a moment for Nigeria to achieve cleaner and more Sustainable Energy options, which is vital to achieving energy Security and Nigeria’s overall economic development.
Energy transition faces finance, capacity, and infrastructure issues.
All this being said, Nigeria still has a long way to go for its energy transition agenda. Nigeria’s energy transition faces several pressing issues. Mobilizing Finance for large-scale projects remains a major challenge, with limited access to capital for both public and Private Sector initiatives. Also, there is a shortage of technical and commercial capacity needed to implement and manage advanced energy solutions effectively. The local content of products and services is often insufficient, affecting the development and Sustainability of the sector. Then, outdated and inadequate Infrastructure hampers the integration of renewable energy technologies into the national grid, limiting their potential impact and delaying progress toward a more sustainable and resilient energy system. In the face of these objectives, Nigeria faces several barriers to the transition to cleaner energy.
These include mobilizing financing to support projects, limitations on technical capacity and commercial capacity, inadequate local content for products and services, and infrastructure limitations to engage renewable energy technologies into the grid. In identifying potential solutions, Adelabu presented several mechanisms, including prioritizing legislative and policy processes to streamline bureaucracy to encourage investment from both the private and public sector. In addition, the government is motivated through the utilization of Technology and Innovation to maximize investment opportunities. A national initiative has been launched to stimulate infrastructure to ensure the development of an interconnected grid with the capacity to develop a robust network.
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Finally, the government has also created opportunities to catalyze strategic alliances with the investment community and development partners to harness global knowledge and capacities that would otherwise distinguish Nigeria and advance the energy transition agenda. Adelabu expressed optimism about the forum, noting it created an essential space to discuss barriers or barriers and opportunities associated with realizing cleaner energy transitions paradigm. The discussion mirrored a global commitment to energy sustained development and economic development, as there was a common vision in overcoming challenges through a collaborative framework to spur clean energy initiatives.