Gas-fired thermal power is likely to continue to constitute the majority of Nigeria’s power mix in the next decade, rising from an 82.9 per cent share in 2020 to 84.1 per cent by 2030, according to GlobalData.
Nigeria’s reliance on thermal power indicates that renewable energy will remain at the backseat, commanding a meagre 0.2 per cent in 2020 that is only expected to rise to 1.5 per cent by 2030.
Rohit Ravetkar, Power Analyst at GlobalData, commented:
“The dominance of thermal power in Nigeria is doing no favors for renewables. The country has the ninth largest natural gas reserve in the world, and the largest in Africa. This has resulted in what started as a growing preference for gas-based generation, but has quickly turned into reliance.
“High dependence on a single source for power generation can endanger the supply security of the country, and Nigeria should diversify its generation mix by increasing the share of renewables.”
Rohit Ravetkar, Power Analyst, GlobalData
Comments made by the CEO of the Niger Delta Power Holding Company, Chiedu Ugbo corroborate this assertion: “Out of the 14,000 megawatts contracted to power generation firms by NBET (Nigerian Bulk Electricity Trading Plc), well over 85 per cent of that are for gas thermal power plants.
“It has been stated that our electricity demand is somewhere around 28,000MW, perhaps we can then use other sources of renewables such as solar, small hydro plants and wind to develop the rest amount of electricity that is required.”
Chiedu Ugbo, Niger Delta Power Holding Company
According to GlobalData’s latest report on Nigeria’s power market outlook, thermal power capacity stood at 13.35 gigawatts (GW) in 2020 and is expected to rise to 20.15GW by 2030.
That said, thermal generation is expected to rise from 33.9 terawatt hours (TWh) in 2020 to 42.5TWh in 2030. Meanwhile, renewable energy capacity will rise from 65 MW in 2020 to 742 MW in 2030, while generation capacity will rise from 79 GWh in 2020 to 776 GWh in 2030.
The Nigerian government has enacted a number of policies to guide and support the development of its renewable sector. This includes the Renewable Energy Master Plan (REMP) and the off-grid electrification strategy.
In the short term, the REMP allows for a moratorium on import duties for renewable technologies whereas in the longer term, the plan provides room for the design of further tax credits, capital incentives, and preferential loan opportunities for renewable power projects. All of these are expected to aid the development of Nigeria’s renewable sector, Ravetkar said.
Within Nigeria’s thermal power in 2020, 97.6 per cent is attributable to gas-fired generation, while oil and coal-fired represent 2.2 per cent and 0.2 per cent respectively.
“Most of the thermal power capacity in Nigeria is gas fired. The country has minimal oil and coal-fired capacity, and this is not expected to significantly increase during the 2021 to 2030 period. This will result in continued dominance of gas-based generation. The country may also increase the share of hydropower as this technology has a good scope for expansion in Nigeria.”
Rohit Ravetkar, Power Analyst, GlobalData
READ ALSO: Govt’s Directive to GOIL Unlikely to Significantly Impact Fuel Prices