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                  PROFESSOR OF LAW,

             A PAPER PRESENTED:

                 ORGANIZED BY:

             23TH – 25TH MARCH, 2009

        Nigeria‟s indigenous energy resource development reveals that the
country‟s oil reserves (6th largest in the world) were put at 34 billion barrels for
2004 and 40 billion barrels by 2010, giving an effective growth rate of 2.746% per
annum. At this growth rate, the reserves will reach 68.7 billion barrels by 2030, or
double the 2004 value. Intense exploration activities are taking place in the off-
shore fields from the Niger Delta, while the potentials of the inland Benue and
Chad Basins are yet to be exploited. By 2000, 53.5% of natural gas reserves of 159
trillion sq. cubic ft (9th largest in the world) were associated gas. While the
associated gas reserves will increase with oil reserves, there will be increasing
activities in exploration for gas only. Corresponding substantial endowments of
bitumen (31 billion barrels of oil equivalent and 2nd largest in the world), coal,
hydropower and solar energy, as well as plans for their development, exist.1
        Energy is essential for development. No developing society can hope to
achieve economic sustainability without adequate energy supplies. Virtually
every aspect of economic and social activity demands energy.
        The unavailability of modern forms of energy to some two billions of the
world‟s population, and inadequate supplies to an estimated additional two
billions more people, is a major challenge to the achievement of the poverty,
gender and health objectives of the UN Millennium Development Goals and the
Plan of Implementation of the World Summit on Sustainable Development.
        At the same time, energy generation using fossil fuels is the principal
source of greenhouse gas emissions that are causing global warming. The mining
and processing of fossil fuels can also endanger the lives of miners, cause severe
land disruption and pollute land, air and waters. Furthermore, burning fossil
fuels emits nitrogen and sulphuric oxides that are themselves toxic and are the
precursors of urban smog and acid rain, while coal burning power stations are
responsible for mercury emissions that bio accumulate in ecosystems, presenting
a threat to human health as well as the environment.
        Providing the energy essential for development while minimizing
environmental hazards is one of the principal challenges of the twenty-first
century. Energy efficiency offers perhaps the greatest potential to greatly reduce
the amount of polluting energy needed to achieve current and future
development targets. By eliminating waste, efficiency can often be accomplished
at a profit or with a very short payback period of a year or two. Renewable
energy, in the form of energy produced from solar, wind, sustainable managed
hydro, geothermal and biomass resources, offers the potential to significantly
displace the need for polluting fuels. These renewable resources are emphasized

in the Plan of Implementation of the World Summit on Sustainable
       This paper therefore contends that while much has been written about the
science, technology and policies for promoting energy efficiency and renewable
energy, little has been written about the legislative and regulatory options
necessary to implement these technologies and policies that make a reality in
practice. By promoting clean and efficient energy use at the legislative and
regulatory levels, governments can ensure that all stakeholders have the
opportunity and incentive to adopt new practices that will help to mitigate
climate change2 and reduce pollution while keeping the path of economic and
social development.
       It is against this background that this paper seeks to realize the following
objectives: -
    1. To underscore the importance of efficient and renewable energy to
       produce electricity for the mitigation of climate change and sustainable
       development in Nigeria;3
    2. To provide an overview of the policy, legislative and regulatory measures
       available to promote energy efficiency and renewable energy in Nigeria;
    3. To highlight the challenges and strategies to overcome the barriers to use
       and regulation of renewable and efficient energy for electricity in Nigeria.

                    MITIGATION   OF   CLIMATE    CHANGE  AND

1.1   Background

       Coal has been superseded as the chief source of Nigeria's electric power
by oil, natural gas, and newly developed hydroelectric facilities. In 1969, the
11,500 MW Kainji Dam, 100 km (62 mi) north of Jebba, was inaugurated. The
N£87.6-million dam was built with loans from the IBRD ( N£34.5 million), the
United Kingdom, the United States, Canada, Italy, and the Netherlands. The 560
MW Jebba plant on the Niger, the 600MW Shiroro plant on the Kaduna, and a
1,320MW thermal station at Igbin, near Lagos, were also expected to add to
hydroelectric capacity. Hydroelectric production accounted for 35.9% of total
power generation during 2000, thermal for the rest, based almost entirely on oil
or gas for fuel. Installed capacity in 2001 totaled 5,888,000kW. Electricity
produced in 2000 totaled an estimated 15.9 billion kWh. About 40% of the
population, and only 10% of rural households, had access to electricity as of

        However, in a more recent 2006 National Survey, more than four in every
five households (85.3 per cent) in the urban areas reported having access to
electricity, which was more than the 54.1 per cent national figure. Majority of the
southern zones recorded high access to electricity. More than 60 per cent of
households in the South-East had access to electricity. South-South‟s figure was
61.2 per cent and South-West‟s, 78.1 per cent. The households in the North-East
had the least access to electricity among the six zones. The study further revealed
that 38.1% of the rural populace, 12.1% of the rural poor and 29.8 of the urban
poor populace in Nigeria had access to electricity.5

        For Nigerians, the quest for uninterrupted electric power supply has been
a long story of dashed hopes and expectations. Despite the promises by
successive administrations in the country to accord priority to the provision of
efficient and renewable energy to produce adequate electricity for sustainable
development, Nigerians have continued to experience epileptic electric power
supply for their different needs.6

1.2   Energy Needs for Different Economic Activities in Rural Areas of

       The basic needs of the poor, rural inclusive are jobs, food, health services,
education, housing, clean water and sanitation. Energy plays an important role
in ensuring these services. The more accessible it is, the higher the consumption
by human beings, the poor inclusive.
       Basic energy services are cooking, lighting and heating, whereas the
corresponding energy consumed per capita per year in MJ are 948, 46, 46,
totaling 1,040 MJ per capita per year. Supply strategies usually are linked to
economic, social and environmental concerns.
       Rural energy resources in Nigeria can be classified as traditional and
commercial. Traditional energy resources such as fuelwood, cow dung, agro-
residues, charcoal, etc. Commercial energy resources such as kerosene, candles,
torches, gas (LPG) and electricity.
       The real challenges in primary energy mix well into the 21st Century for
energy sustainability by World Energy Council (WEC) are how to develop
cleaner combustion technologies and how to cover the real cost of fuels and
energy services.
       Today, WEC‟s regional programs in Asia, Africa, Latin America and the
Caribbean, and Central/Eastern Europe are focused on facilitating provision of
access to a minimum of 500 kWh of reasonably priced electricity or its equivalent
to every person in the world by 2020.

        The energy projects that will contribute to this will bring commercial
energy to a new market such as urban poor/rural poor, in a developing country,
like Nigeria, in a way that quantifiably reduces or eliminates emissions at the
local, regional, or global levels.
        Broad patterns of global energy use in rural areas, gives:
    1. Households – 85% of total, traditional energy, with end-use in cooking
        and heating.
    2. Agriculture – 2-8% of total, commercial energy, with end-use in the
        powering of mechanical equipment and pumps.
    3. Rural Industries – 10% of total, mixture of traditional and commercial for
        motive power use usually.
        The Energy Commission of Nigeria (ECN) Rural Energy Surveys8 show
that the energy consumption sectors are similar to the broad global lines
discussed above, with addition of other services.
        One influencing factor in energy consumption is the income-level. Low
income level consumes energy primarily in cooking, whereas medium income
level will add lighting to its consumption and the high income level will add
water heating, refrigeration and cooling to the other two end uses.
        Another interesting observation from the analysed data is the absence or
inadequate skills in the Local Government Authorities for sustenance of the
energy systems. This is because the traditional energy conversion technologies in
use are rudimentary, limited in capability and generally inefficient. This raises
the need for training and capacity building for the sustenance of energy
conversion technologies of modern energy services. Energy end-use are
primarily and on the average for lighting, cooking, drying, heating,
transportation, agriculture and industrial activities.
        Economic activities are location specific with common ones such as
sawmill, brick making, garri processing, bakery and furniture making.
        The end-use energy requirements for different economic activities in the
rural areas are given in table 1 below:

Table 1: - Economic Activities & Energy requirements in the Rural Areas9
S/N   ACTIVITY               USE                          KW
1.    Agro-Processing        Flour grinding               1-2
                             Oil expelling                2-5
                             Crop drying                  -
                             Threshing                    -
2.    Small-Scale Industry   Saw-milling                  10-30
                             Wool and Cotton Processing   5-25
                             Stone Crushing               5-25
3.    Household              Lighting                     0.2
                             Refrigeration                0.3
                             Cooking                      0.4 (heat storage cooker)
                             Water-pumping                0.5-1
                             Ironing                      0.5

                                     Radio/TV                              0.1-0.3

       The urban poor also are dependent on small-scale manufacturing and
repair services for income. Fuelwood is still mainly used for small-scale
production of bread and other products, thereby increasing the problem of
environmental pollution. However, some of these enterprises may become
increasingly sustainable and economical if modern energy services are used. The
use of modern energy services would improve the quality of life and livelihoods
and increase potentials for income generating activities.
       Table 2 below reveals the National Energy Consumption pattern as
reported by a recent National Energy Study for the industrialization of Nigeria
(2006-2030)10 which took into consideration the thinking of government in terms
of the overall economy and the energy sector.

Table 2: -       Summary of National Energy Consumption Computations for the
                 Household Sector11
Fraction of households with A/C                  10.71%
Fraction of households with Water Heater          7.14%
                                                (Gas)LPG    Kerosene      Coal       Fuelwood    Electricity
% HH Using an Energy Type for Cooking            12.50%      76.79%       1.79%       67.86%       7.14%
% HH Using an Energy Type for Water               8.93%      67.86%          0        66.07%      25.00%
% HH Using an Energy Type for Lighting             0         87.50%         0           0         42.86%

Ave Annual Energy Cons. Per HH
For cooking (Unit/household)                     22.06        34.79                   2275.75      21.27
For water heating (Unit/Household)                3.47         7.86                    785.61      132.66
For Lighting (Kg/Household)                        0           52.7                      0         291.75

National consumption per yr
For cooking (Unit*)                             1.65x108     6.59x108                4.31x1010   4.03x109
For water heating (Unit*)                       2.60x107     1.49x108                1.49x1010   2.51x109
For Lighting (Unit*)                                         9.98x108                    0       5.53x109
For A/C (Unit*)                                                                                  2.20x109
For Appliances (Unit*)                                                                           2.90x109
Total (Unit*)                                   1.91x108     1.81x109    2.03x107    5.80x1010   1.35x1010

National Consumption (TOE)
For Cooking (TOE)                                 178.63     548217.3                 1.40x1010   89811.29
For Water Heating (TOE)                           28.09      123860.2                 4.83x109    560033.5
For Lighting (TOE)                                           830358.9                     0        1231697
For A/C (TOE)                                                    0                        0       490974.6
For Appliances (TOE)                                                                              645586.2
Total (TOE)                                       206.72      1502437                 1.88x1010    3018102
* National units of the fuels are as follows: (Gas) LPG (kg), Kerosene (litre), Coal (kg), Fuelwood (kg),
Electricity (KWh).

1.3     Implications of Climate Change for the Energy and Industrial Sectors of

        Climate change, and more specifically the carbon emissions from energy
production and use, is one of the most troubling problems facing society today.
Climate change engages the energy sector particularly closely because energy is
central both to the problem and to its solution.
        Hydropower generation is the energy source most likely to be affected by
climate change. It is sensitive to the amount, timing, and geographical pattern of
precipitation, as well as temperature. There is the potential for more intense
rainfall events (which would require more conservative water storage strategies
to prevent flood damage), greater probability of drought (less hydroelectric
production), and less precipitation (less water available during warm months);
all of which point to less hydroelectric capacity at current powerhouses.
        Reduced flows in rivers and higher temperatures reduce the capabilities of
thermal electric generation. Higher temperatures also reduce transmission
capabilities. Hydropower generation will be affected by increased run-off (and
consequent siltation). Excessive drought will lead to higher evapo-transpiration,
which adversely affects water volume, and will thus reduce hydroelectric
capacity. Excessive drought, which is likely to affect forest cover, will also pose
problems for fuel wood supply. Oil and gas production, especially in coastal
areas, will be negatively affected by increased wind and wave action, heavy
precipitation, and shoreline erosion. It will also be affected by the loss of oil and
gas extraction infrastructure due to sea-level rise and coastal inundation. Climate
change-induced extreme weather events such as windstorms, floods and
tornadoes (which can topple transmission towers and hundreds of kilometres of
power lines) will exacerbate the rate of failure of transmission systems of electric
utilities. The cost implications are prohibitive. Yet demands for both space-
cooling and space-heating can only increase, placing further dependence on this
already burdened industry.
        Two categories of industries were identified as being vulnerable to climate
change: (1) industries with activities that are dependent on climate (construction,
transportation operations and infrastructure, energy transportation and
transmission, offshore oil and gas production, thermal power generation,
industries, such as paper mills, that depend heavily on water, pollution control,
coastal-sited industry, and tourism and recreation), and (2) sectors in which
economic activity is dependent on climate-sensitive resources (agro-industry,
biomass and other renewable energy production).
        Industries, generally, may be exposed to direct or indirect impacts of
climate change. Such potential impacts of climate change will depend on a
number of factors, which include:
    1. The geographic location of such industries (Coastal and northern dry
        belt zones).
    2. The nature of resource inputs used by the industry (which are climate-
        dependent (such as agro resources)).
    3. The dynamics of consumer behaviour.

      4. Government policies pertaining to climate change. The imposition of
         carbon taxes, for example, would increase the cost of production inputs.
      5. Other industries: such as construction, housing, transportation, energy
         generation and distribution, are all affected by the incidence of extreme
         weather and weather-related conditions.

1.4     Energy Efficiency and Renewable Energy13
        Energy efficiency measures are a proven means to reduce dependence on
traditional energy resources by using them more efficiently. With respect to
electricity supply, for example, the typical power plant uses only 30% of its fuel
for producing electricity; the remaining 70% of the fuel produces heat that
generally is exhausted through tall stacks into the atmosphere.
        If the waste heat is used instead for additional power production, for
industrial processes or for heating buildings, the efficiency of the fuel use can be
more than doubled, often to as much as 70%. Similarly, an industry that uses
large amounts of heat in its processing often can produce very low cost electricity
in conjunction therewith. The technology for achieving these savings is called
“combined heat and power” or “cogeneration.” Building efficiency and
appliance efficiency measures can save a large percentage of the fuel required for
these large-consuming applications.
        Energy from the light of the sun (photovoltaic) can be used to produce
electricity. While the equipment is expensive, maintenance requirements are
minimal and there are no fuel costs. They are far less costly for rural areas not
covered by grid electricity than building new power plants and grid distribution
systems. Energy from the heat of the sun (solar thermal) can be used
economically to heat water and homes. Both these forms of solar energy also can
be used in large arrays to produce central station power.
        Energy from biomass (agricultural and wood wastes) is particularly
advantageous for developing countries because local products and labor can be
employed. Energy crops can be grown, as demonstrated in Brazil, to produce
ethanol to fuel vehicles and industrial processes, avoiding the need to import oil.
        Hydroelectric energy for electricity is the most widely used renewable
energy resource today with many developing country applications. Construction
of large hydroelectric dams has substantial problems of displacement of
populations and agriculture and of siltation that diminish their usefulness over
time of displacement of populations and agriculture and of siltation that
diminish their usefulness over time. Decay of plant life in the dam reservoirs
produces significant amounts of carbon dioxide. The effectiveness of the dams
can be serious impaired by droughts, leaving insufficient flows to produce
expected electricity outputs, as demonstrated recently in Brazil where electricity
had to be rationed because of drought-related water shortages. Still, hydropower
produces no other pollutants, requires little maintenance and is often
economically advantageous. Small dams and installation of turbines in fast-

flowing rivers without the use of dams can be very advantageous, minimizing
environmental problems. Where dams already exist, adding power generation
also is attractive.
        Geothermal energy from the heat of the earth, where available, can be
used economically to produce hot water and steam for electricity.

1.4.1 Brief Overview of Rural Applications of Efficiency and Renewable
        Some who currently lack access to modern electricity in developing
countries will be served by central grid connections, connecting villages and
remote areas to a national grid often owned and operated by a public utility. This
tendency to incrementally extend grid to remote communities, however,
increases costs particularly for those areas that are farther from the national grid.
        Predictably, remote areas with very small populations may remain
unconnected. Due to a lack of access to modern electricity, rural populations
resort to burning large quantities of wood to satisfy their everyday energy needs.
For example, much of the cooking in developing countries is done on wood or
coal burning stoves. Use of wood requires women and children to spend much of
their time and energy collecting firewood. Using either wood or coal for cooking
in enclosed buildings exposes occupants, particularly women and children, to
very concentrated health-damaging emissions and contributes considerably to
carbon dioxide and other pollutant emissions. Wood burning also causes other
severe harm to the environment, including rapid deforestation, followed by
irreversible biodiversity loss.
        Rural off-grid electrification can provide a viable alternative to grid
electrification as the cost of off-grid technologies continues to decline. Costs will
decline because of proven and improved technologies, and increased demand
and production. There are examples of both public and private-sector-led
markets for off-grid electrification in rural areas of developing countries. These
decentralized off-grid generation technologies have been demonstrated, for
example in small-scale hydropower, photovoltaic, wind, and geothermal and
small-scale bio power using producer gas electrification projects. There are
demonstrated experiences, for instance, in China, India, Kenya and Nigeria.15
Other alternatives to wood burning for cooking, for example, include:
     Fuel-efficient stoves that reduce wood and coal consumption and
        polluting emissions.
     Hybrid fuels that incorporate biomass waste and reduce the harmful
        effects of coal burning.
     Biogas units that yield gas from waste agricultural materials and improve
        sanitation while providing fuel for cooking and lighting.
     Use of Improved building materials and passive solar construction that
        reduce heating needs.

         Micro-hydropower and other renewable energy generators that provide
          clean electricity to rural off-grid communities.

       Kenya‟s Rural Electrification Programme16 involves a government plan to
invest $13 million (US) annually to increase access to electricity in rural areas by
modern forms of energy. Kenya has an outstanding cooking stove program,
having adapted a Thai bucket ceramic-lined charcoal-burning stove that saves
between 20% and 50% of the fuel otherwise used and now costs only $1-3. There
are now about 900,000 of these “jiko” stoves in Kenya, reaching about 60% of
urban households and 20% of rural homes. About 200 local firms produce the
stoves. The Kenya program has been adopted in Tanzania, Uganda and Rwanda.
China established a National Improved Stove Program in 1992, which has
provided over half of China‟s rural households with improved stoves. China also
started to manufacture, install and service the stoves. Some 160 million cooking
stoves were upgraded between 1982 and 1998 at a cost of $158 million in
government support. The unit cost per stove was $9. Inexpensive efficient stoves
are available and in use in many places around the world now, which both
reduce the amount of fuel needed and pollutant emissions.

1.5     Nigerian Initiatives in Climate Change Mitigation Measures/Efficient
        and Renewable Energy Technologies.
        a.    Climate Change Mitigation Measures.
        National inventories to estimate the annual emissions of greenhouse gases
have been undertaken in Nigeria for three years (1988, 1990 and 1994) and
reviewed between 2001-2004,17 using frameworks provided by the IPCC and
other agencies. An emissions profile by sector indicates that CO (carbon dioxide)
emissions has been dominated by the energy sector (for which gas-flaring,
electricity generation and transport sectors are most significant sources), and
land-use change (with biomass harvests and forest conversion to managed lands
as principal sources, while annual forest growth remains the principal sink or
source of carbon removals). The major contributors to CH emissions include
energy conversion and transformation, stationary sources, upstream oil and gas
systems, livestock and rice cultivation. Similarly, the principal contributors to
NO (nitrous oxide) emissions include energy conversion and transformation,
stationary sources, savannah burning and agricultural soils. For the precursor
gases, CO and NO emissions are principally from identify all studies undertaken
with the primary objective of assessing emissions inventories and options for
mitigation; identify all studies which were undertaken with the primary
objective of assessing mitigation options; energy conversion and transformation
sources, stationary sources, mobile sources, gas-flaring, savannah-burning, field-
burning of crop waste, and forest conversion to agricultural lands; while
NMVOC emissions arise primarily from energy conversion and transformation,

mobile sources, industrial processes (paint production), and municipal solid
waste management.
       The actual results of the analysis of emissions inventories collected (Table
3) indicate that between 1988 and 1994, the gross annual emissions were in the
range of 178 to 192 Tg-CO, 2.7 to 5.9 Tg-CH , 11.95 to 18.55 Gg N O, 13.3 to 17.0
Tg CO, 404.3 to 658.3 Gg NO and to 1.0 to 2.2 Tg NMVOC.
       Inventories by sector have been additionally undertaken in some
industrial sub-sectors, including agriculture. Results (in Table 3 below) indicate
that the energy sector still dominates the other sectors in its contribution to gross
national emissions.

Table 3: - Summary of National Emissions in Nigeria Between 1988 and 1994

Table 4 : -   Sectoral and Gross Carbon Dioxide-Equivalent Emissions for the
              years 1988 to 1994

       Mitigation analyses have been undertaken to provide options for the
reduction of CO emissions in the energy and forestry sectors. No similar analyses
are yet available for CO in the other sectors and for non-CO GHG reduction in all
sectors. The most expensive options for CO reduction in the energy sector are
mostly in the transport sector (with the introduction of fuel-efficient road
transport vehicles), and gas-flare reduction in the oil industry. Regrettably, gas-
flare reduction has the largest CO reduction potential in the Nigerian energy
system but at a cost of about $50 per tonne of CO reduction.
       The ranking of mitigation options in the forestry sector identified three
mitigation options as the most promising: afforestation, agroforestry and forest
protection. Considering carbon flow alone, the afforestation option is the best,
with a carbon pool of 175.20 tonnes of carbon per hectare. Agroforestry and
forest protection follow closely, with carbon pools of 153.00 and 131.10 tonnes of
carbon per hectare respectively. In terms of land management for climate change
mitigation, agroforestry is probably the best. Also, agroforestry is more efficient
economically than the afforestation option in meeting the wood needs of the
country. In general, the agroforestry option would seem most desirable.
       It is recognized that currently available data have serious gaps and
limitations. Apart from this, the latest inventory and mitigation analysis data are
for the year 1994 reviewed 2001-2004, which is approximately eight years behind

the project period. Without recent and reliable data, the development of policies
and action plans to manage emissions, or to forecast future impacts with the
hope of providing adequate adaptation strategies would be difficult. As well,
without adequate reliable and recent data, the participation of Nigeria in
emerging issues such as carbon-trading and the development of a sustainable
development framework to enable the country respond to its obligations under
the UNFCCC would be difficult. Data quality, inadequate data, institutional and
human resources barriers have been identified as militating against the overall
success of the Nigerian effort to provide information on emissions and mitigation
options. These are compounded by the lack of an institutional framework to
drive and propel these efforts. It is therefore recognized that an institutional
framework to ensure the development and implementation of a national
emissions data system in Nigeria has now become mandatory.

      b.     Initiatives in Efficient and Renewable Energy Technologies18
      Modern and efficient technologies have been used to develop and adopt
devices for the utilization of renewable energy resources by the following
Research Centres of the Energy Commission of Nigeria:
   a) Center for Energy Research and Development, Obafemi Awolowo
      University, Ile-ife, Osun State;
   b) Centre for Energy Research and Training, Ahmadu Bello University,
      Zaria, Kaduna State;
   c) National Centre for Energy Research and Development, University of
      Nigeria, Nsukka, Enugu State;
   d) Sokoto Energy Research Center, Usman Dan-Fodio University, Sokoto,
      Sokoto State.

       The Centres at Ile-Ife and Zaria work on peaceful application of Nuclear
Science and Technology while those at Nsukka and Sokoto work on solar energy
and other renewable energy sources.
       Raw materials used for some of these devices have more than 90% local
contents. Some of these appliances include:
     Solar Crop Dryers (such as the 2 tonne capacity Rice Solar Dryer at
       Agbani, Enugu State and 2 tonne capacity Forage Solar Dryer at National
       Agricultural Production Research Institute, Ahmadu Bello University,
       Zaria, Kaduna State), which can be used to process agricultural products
       such as rice, maize, pepper, tomatoes, cocoa, tea, and coffee;
     Solar Water Heaters for providing hot water in hotels and hospitals for
       bathing and washing, such the 1000 litre capacity Solar Water Heater at
       the maternity ward of Usman Dan-Fodio University Teaching Hospital,
       Sokoto, Sokoto State;
     Solar PV Water Pumping for clean potable water, such as the 7.2k Wp
       Solar PV Plant at Kwalkwalama in Sokoto, the 2.85kWp Solar PV Plant at

          the centre for mentally-ill Destitutes at Itumbuzo in Abia State and the
          5.00kWp Solar PV Plant at Comprehensive Health Centre in Laje, Ondo
         Biogas Plants for cooking gas and bio-fertilizer, such as the 20m3
          Biodigester at Ifelodun Cooperative Farm at Agege, Lagos State, the 10m3
          biogas plant at Achara in Enugu State and the 30m3 biogas plant at Zaria
          Prison in Kaduna State; and 5kWp wind power plant at Sayya Gidan
          Gada in Sokoto State;
         The Energy Commission of Nigeria, the Power Holding Cooperation of
          Nigeria and MTN-Nigeria are collaborating with the World Bank on a bio-
          fuel for rural electrification project in Nigeria. The bio-fuel is to be sourced
          from Jatropha Plant or any economically viable energy crop on a long
          term basis. Similarly, the Energy Commission of Nigeria signed another
          MOU with Green Shield of Nigeria (a registered NGO with diversed
          interest in alternative energy sources etc) to produce bio-diesel as a
          renewable energy for domestic and commercial uses in Nigeria, using
          Jatropha plant;


2.1    Policy Goals for Efficiency and Renewable Energy Decision-Making
       What policy goals can guide rural applications of efficiency and renewable
energy decision-making in developing countries?19
       Sustainable development in developing countries can hardly be achieved
without rural applications of efficiency and renewable energy, thus underscoring
the necessity for a dynamic and efficient legislative and regulatory system. All
such regulatory systems must require a number of tasks to be performed: as an
exercise of policy-making. The goals of rural applications of efficiency and
renewable energy regime must be established; those goals must then be
translated into the principles and rules that control behavior of the principal
actors; and there must be procedures for explicating and enforcing the principles
and rules and for the adjudication of disputes arising from them.
       While there is no single logarithm for determining universally applicable
policy goals that can guide rural applications of efficiency and renewable energy
decision-making, the policy goals, however they are couched, can amongst
others stress the need to:
    Promote rural applications of efficiency and renewable energy in all its
    Maintain fair, just and reasonable rates for rural electricity consumption;

         Ensure uninterrupted electricity to rural areas;
         Promote rural energy efficiency;
         Promote technological innovations and transfer of renewable energy
          technologies to rural communities (and to the people who would directly
          benefit from their use);
         Facilitate and encourage effective competition, education, training and
          public participation;
         Improve people‟s lives and livelihoods;
         Meet goals of sustainable development, including obligations and norms
          per multilateral environmental agreements such as those for greenhouse
          gas emissions reductions.

2.2     National Electric Power Policy, 200120
        The overwhelming objective of the Electric power policy Statement is to
ensure that Nigeria has an ESI (electricity supply industry) that can meet the
needs of its citizens in the 21st Century. This will require a fundamental reform at
all levels of the Industry. A technically and commercially efficient ESI is critical
for achieving Nigeria‟s growth and development goals.
        The priority is to create efficient market structures, within clear regulatory
frameworks, that encourage more competitive markets for electricity generation
and sales (marketing), which at the same time, are able to attract private
investors and ensure economically sound development of the system. This will
ensure that, the demand in an efficient and economically viable manner. The
policy objectives are divided into the short-to-medium term (3-5 years) and the
long-term (to commence beyond 5 years).

2.3    Nigerian Electricity Regulatory Commission21
       A privatized electricity industry, with competition over monopoly
transmission and distribution grids, requires an effective regulatory agency that
is independent both of Government and of all the companies operating in the
industry. The Ministry of Energy is responsible for providing in a new Electricity
Law for an independent regulatory body that:
i.     has clear appointment and dismissal rules;
ii.    has a source of independent funding; and
iii.   faces appropriate checks and balances to ensure that regulation not only
       operates in a fair transparent way but is also seen to operate in a fair and
       transparent way.

       Hence, an independent regulatory agency for electricity in the form of a
Regulatory Commission shall be called the Nigerian Electricity Regulatory
Commission (NERC), based on the following regulatory arrangements among

       i.     NERC will be an independent Federal agency and electricity
              regulator for grid connected services;
       ii.    NERC will have decision making powers on the key aspects
              technical and economic regulation (viz: tariff regulation, approval
              of capacity expansion plans and regulated company business plans,
              oversight of capacity, tending, competition, standards, quality of
              service, service obligation etc);

       The objective of this policy is ultimately to establish a log-term electricity
market structure in Nigeria in which multiple operators provide services on a
competitive basis to the broadest range of customers. Under such a regime,
competitive market forces would be the best determinant of the appropriate and
sustainable levels of prices charges by various carriers for their services.
       Experience in Nigeria demonstrates that people are willing to pay more
than the current rates for efficient services. Many businesses, large and small, run
generators that provide power at a cost many times higher than the level of
PHCN prices. Similarly, many villagers pay significantly more for electric power
from off grid sources than comparable households in villages connected to the
grid. Both of these demonstrate a willingness to pay higher prices for a more
reliable service.
       It is likely that for some interim period active competition will not fully
develop throughout the market, leaving one or more dominant operators with
the power to control pricing. In these circumstances, it is appropriate for the
Nigerian Electricity Regulatory Commission to establish tariff regulation
requirements for such dominant operators, which will ensure that service prices
are cost-oriented, that consumers‟ and competitors‟ interest are protected, and
that the industry develops in the most efficient manner possible.
       The Nigerian electricity fuel mix will, of course, continue to use and
expand the use of hydro generation, renewable and will continue to use some
liquid fuels. Nevertheless, natural gas (and the use of currently flared associated
gas) represents the major likely fuel for the future expansion of generation. In
addition, gas powered electricity generation is the most obvious growth market
for the commercial development of gas markets and will be explored by the
Independent Power Projects (IPPs).

2.4    National Energy Policy, 200322
       The policy objectives and implementation strategies have been carefully
defined with the fundamental guiding premises that energy is crucial to national
development goals, and that government has a prime role in meeting the energy
challenges facing the nation. Furthermore, the dependence on oil can be reduced
through the diversification of the nation‟s energy resources, aggressive research,
development and demonstration (R,D & D), human resources development, etc.

Consequently the overall energy policy objectives may be summarized as
i.    To ensure the development of the nation‟s energy resources, with
      diversified energy resource options, for the achievement of national
      energy security and an energy delivery system with an optimal energy
      resource mix.
ii.   To guarantee increased contribution of the energy sector to national
      income and to productive activities.
iii.  To guarantee adequate, sustainable and reliable supply of energy at
      appropriate costs and in an environmentally friendly manner, to the
      various sectors of the economy, for national development.
iv.   To guarantee an efficient and cost effective consumption pattern of energy
v.    To accelerate the process of acquisition and diffussion of technology and
      managerial expertise in the energy sector and indigenous participation in
      energy sector industries, for stability and self-reliance.
vi.   To promote increased investments and development of the energy sector
      industries with private sector participation.
vii.  To foster international co-operation in energy trade and projects
      development in both African region and the world at large.
viii. To successfully use the nation‟s abundant energy resources to promote
      international co-operation.
ix.   To ensure a comprehensive, integrated and well informed energy sector
      plans and programmes for effective development.

       In terms of energy sources in Nigeria the policy took cognizance of the
fact that the nation is clearly over dependent on crude oil for its foreign exchange
earning; hence the economy is vulnerable to the unstable nature of the
international oil market. Therefore there is a need to promote the expansion of
the processing sub-sector to allow for the export of value-added petroleum
products. Furthermore, it is desirable to diversify the domestic energy mix away
from ever-increasing consumption of petroleum products in order to avert any
possible conflict between domestic and export requirement.
       Oil will continue to play a major role in the nation‟s economy, hence the
need to expand the reserve base through continuous exploration activities.
       Further, the energy policy recognizes natural gas as another vital energy
source. Nigeria‟s natural gas reserves estimated at about 164 trillion standard
cubic feet are known to be substantially larger than its oil resources. Gas
discoveries in Nigeria are incidental to oil exploration and production activities.
At present, about 70% of gas produced (mainly associated gas) is flared. In view
of the increasing domestic oil consumption, an economically optimal strategy to
replaced oil with gas and gas derivatives will enhance the availability of more oil
for export. This will also promote the conservation of the oil reserves. Apart from

the economic advantage, fuel substitution from oil to gas is more
environmentally friendly because gas is a cleaner fuel than oil.
       Given the current reserves and rate of exploitation, the expected life-span
of Nigerian crude oil is about twenty five years. It is therefore strategically
important to undertake major investments in the gas sector in order to prepare
adequately for gas as a substitute for oil both for domestic needs and foreign
exchange earnings. The continued flaring of natural gas has resulted in a
substantial waste of energy resources, in addition to contributing to atmospheric
pollution. It is therefore imperative to take effective measures to curtail gas
flaring consistent with the level of domestic gas exploitation and our
international obligations with regards to the environment.

        Tar sands as another energy source are known to exist in Nigeria. The
deposit is preliminarily estimated to contain a total reserve of about 30 billion
barrels of oil equivalent. The heavy crude from the tar sands can be a major
feedstock for Kaduna Refinery which refines heavy crude with similar properties
that is now being imported.
        Bitumen, which is derive from tar sands, is used in road construction and
it is also used in electrical, chemical, petrochemical and other industries. If
properly harnessed the tar sand resources in the country would contribute
immensely to the nation‟s energy resource base.
        Accordingly, the energy policy, the nation shall encourage tar sands
exploration, exploitation and development for full utilisation by the country.
This is with a view to achieving the following objectives: -
   i. To extract heavy oil from the tar sands for refineries.
  ii. To conserve foreign exchange used in importing heavy crude oil.
 iii. To acquire the technology for harnessing the tar sand.

     The policy adopts the following strategies in order to realize the above
objectives: -
   i. Undertaking exploration activities for tar sands deposits in the country.
  ii. Establishing infrastructural facilities for the acquisition of the technology
        for harnessing tar sands.
 iii. Intensify heavy oil upgrading facilities near the tar sands deposits.
 iv.    De-emphasising the importing of heavy crude oil as a way of encouraging
        the utilisation of heavy oils from our tar sands.

       Under the energy policy, coal is another source, where available data
show that coal of sub-bituminous grade occurs in about 22 coal fields spread in
over 13 states of the Federation.
       The proven coal reserves so far in the country are about 639 million tones
while the inferred reserves are about 2.75 billion tones.

        Coal production in Nigeria started in 1916 with an output of 24,500 tonnes
for that year. Production rose to a peak of 905,000 tonnes in the 1958/59 year
with a contribution of over 70% to commercial quantities in 1958 and the
conversion of railway engines from coal to diesel, production of coal fell from the
beginning of the sixties of only 52,700 tonnes in 1983. This excludes the civil war
years and the period of 1970 and 1971 during the reconstruction years when
there was little or no production.
        Production rose to about 100,000 tonnes in 1991, with part of it being for
export, in 1980 coal contributed less than 1% to commercial energy consumption
in the country as compared to 70% for oil, 25% for natural gas and about 5% for
        Coal deposits in Nigeria can be utilized for power generation, production
of steam and hot air for process heat and drying applications, heat source and
reducing agent for steel production, cement production, domestic fuel, source of
chemicals, liquid and gaseous fuels, feedstock for battery, carbon electrode and
brick making industries, etc, all the above potentials of coal need to be effectively
harnessed into the country‟s energy delivery system and export commodity mix
through the development of a vibrant coal industry.
        From the onset of coal production in Nigeria, the Nigerian Coal
Corporation had been the only institution active in the coal industry. In 1990 the
Federal Government approved the full commercialization of the Corporation.
Consequently, joint venture arrangements with foreign partners have developed
for the exploitation of some of the coal deposits. There is however the need for
increased participation of indigenous companies in the activities of the coal
        The nation‟s coal industry faces some daunting challenges which need to
be addressed if the potential for coal utilization is to be optimally exploited. One
of the major problems is that of the low productivity of the coal mines and
consequently the high cost of production of Nigerian coal. This is mainly due to
limited mechanization of the coal mines.
        Another problem relates to the lack of cost-effective transportation system
for carrying the coal from the mines to consumers far away. Presently the price of
coal doubles roughly every 100km from the mines due mainly to high
transportation costs. It is therefore imperative that the present national rail
system and port facilities be expanded and made more effective to meet the
needs of the coals industry.
        Hence under the energy policy: -
i.      the nation shall continue to pursue vigorously a comprehensive
        programme of resuscitation of the coal industry;
ii.     extensive exploration activities to maintain a high level of coal reserves
        shall be carried out;
iii.    the exploitation and utilization of the coal reserves shall be done in an
        environmentally acceptable manner;

         The Energy Policy recognizes the fact that Nuclear energy is one of the
major sources of base-load electricity generation the world today. The technology
for harnessing nuclear energy demands great responsibility and therefore
requires careful planning of the manpower development and material resources.
         Coordinated approach to research, training and development in the areas
of nuclear science and technology in Nigeria started in 1977 when nuclear energy
research centres were established in two universities. Thus, the few trained
personnel in the areas are concentrated in these two centres. There is therefore an
urgent need to accelerate the manpower development programme in view of the
diverse peaceful applications of nuclear energy.
         Of importance to any nuclear programme is the availability of nuclear
minerals such as uranium and thorium. In 1947, pyrochlore containing uranium
was found in appreciable quantities on the Jos Plateau and its environs; but there
is still no established method of commercial extraction of the uranium. By 1979,
about 617,000 km2 of land area had been covered by aerial radiometric surveys
and another 90,000 km2 had been covered by other surveys. At present there are
on-going efforts to ascertain the extent of radioactive mineral deposits widely
believed to exist in some parts of the country. There is also the need to extend
investigations to other areas of the country suspected to have traces of any of the
radio-active minerals and to place the management and all scientific
investigations under the control of Nigerians.
         Uranium ores are complex assemblages of minerals and therefore differ
widely in details of composition and textured. The characterization of the
different uranium ore minerals in the country is being carried out. There is
however the need to develop the extraction processes for each of them, on the
addition to the generation of electricity, nuclear energy finds many other
peaceful applications. Infact it has been in use in the country for decades for
various peaceful applications in health care delivery system, agriculture, food
preservation, animal husbandry, pest control, industry and mineral exploration.
All these applications will be enhanced by the acquisition of nuclear research
reactor. There is also the need for a law regulating the use of radioactive
substances and machines capable of producing ionizing in order to protect the
populace from the hazards of radiation.
         Hence that Energy policy states that the nation shall pursue the
exploitation of nuclear energy for peaceful purposes. This is with a view to
achieving the following objectives: -
i.       to pursue the introduction of nuclear power into the generation of
ii.      to apply nuclear science and technology in industry, agriculture and
iii.     to pursue the exploration of nuclear resources in the country;
iv.      to institute nuclear safety and environmental protection measures;

v.    to promote the development of nuclear science and technology.

The Policy provides for the following strategies: -
i.    Intensifying manpower development in the utilization of nuclear energy
      for peaceful purposes.
ii.   Evolving appropriate laws and regulations to ensure adequate protection
      for the public and the environment.
iii.  Intensifying research and development efforts in nuclear science and
iv.   Developing an appropriate institutional framework and infrastructure for
      the development of nuclear science and technology in the country.
v.    Creating incentives for career development campaigns on applications of
      nuclear technology.
vi.   Identifying accurately the availability and the extent of nuclear fuels and
      other materials.
vii.  Providing adequate funding for the development of nuclear science and
viii. Fostering co-operation with the International Atomic Energy Agency.

        Moreover, the National Energy Policy recognizes hydropower as one of
the major sources of base-load electricity generation. Despite its high initial
capital cost, hydropower provides one of the cheapest and cleanest sources of
        The country is well endowed with large rivers and some few natural falls
which are together responsible for the high hydropower potential of the country.
The Rivers Niger and Benue and their several tributaries constitute the core of
the Nigerian river system which offers a renewable source of energy for large
scale (greater than 100 MW) hydropower development. In addition, several
scores of small rivers and streams do exist and can be harnessed for small scale
(less than 10 MW) hydropower projects.
        The total technically exploitable large-scale hydro-power potential of the
country is estimated at over 10,000 MW capable of producing 36,000 GWh of
electricity annually. Only about one fifth of this potential had been developed as
at 2007. The small-scale hydropower potential is however yet to be established.
There is the need to develop small-scale hydropower plants for the provision of
electricity for the rural areas and remote settlements.
        In Nigeria, hydropower generation accounts for a substantial part of the
total electricity generation mix. In 2007, hydroelectricity represented over 37% of
the total electricity produced nationwide.
        Accordingly, the Energy policy states that: -
i.      The nation shall fully harness the hydropower potential available in the
        country for electricity generation.

ii.    The nation shall pay particular attention to the development of the mini
       and micro hydropower schemes.
iii.   To ensure minimum damage to the ecosystem arising from hydropower
iv.    To attract private investments into the hydropower subsector.

This is with a view to achieving the following objectives: -
i.      To increase the percentage contribution of hydro electricity to the total
        energy mix.
ii.     To extend electrification to rural and remote areas, through the use of mini
        and micro hydropower schemes.
iii.    To conserve non-renewable resources used in the generation of electricity.
iv.     To diversify the energy resource base.

          The Energy policy further recognizes the fact that a substantial percentage
of Nigeria‟s urban poor and rural populace depend on fuelwood for cooking and
other domestic uses.
          The rate of consumption of fuelwood far exceeds the replenishing rate to
such an extent that desert encroachment is now a serious problem in the country.
Also associated with this is soil erosion and loss of soil fertility.
          The largest sources of fuelwood at present are from natural forests,
communal woodlots and private farmlands. Supply form natural forest
regeneration is continuously being diminished due to the additional activities
such as the clearing of forests for development projects agricultural activities
such as the clearing of forests for development projects agricultural and
industrial activities. Since forests are essential for a healthy environment and as a
check on wind and water erosion and desertification, and also serve as energy
sources, it is essential that they are cropped on a rational basis.
          Hence the policy states that: -
i.        The nation shall promote the use of alternative energy sources to
ii.       The use of wood as a fuel shall be de-emphasized in the nation‟s energy
iii.      The nation shall intensify efforts to increase the percentage of land mass
          covered by forests in the country. This is with a view to realizing the
          following objectives: -
     i.       To conserve the forest resources of the nation.
     ii.      To greatly reduce the percentage contribution of fuelwood
              consumption in the domestic, agricultural and industrial sectors of the
     iii.     To arrest the ecological problems of desert encroachment and
     iv.      To facilitate the use of alternative energy resources to fuelwood.

        Under the Energy Policy, solar radiation is incident on earth at the rate of
about 7.2 x 1015 MJ/day. Its intensity varies with location and at a given
location, it varies with season, day of the month, time of day, instantaneous
cloud cover and other environmental factors. However, the incorporation of
efficient storage devices in solar energy conversion systems will take care of this
intermittent nature of the availability of solar radiation.
        Nigeria lies within a high sunshine belt and within the country solar
radiation is fairly well distributed. The annual average of total solar radiation
varies from about 12.6 MJ/m2-day in the far North. Solar energy is renewable
and its utilization is environmentally friendly. Consequently, when the
availability and environmental cost of the utilization of other forms of energy are
considered the competitiveness of solar energy in comparison with these other
forms becomes very evident, particularly for low to medium power applications.
        Solar radiation conversion technologies are generally either of the solar-
thermal type (Solar heating, cooling, drying, thermal power plant, etc.) Or of the
photovoltaic type (direct conversion to electricity). Areas of application of solar
thermal technologies are crop drying, house heating, heating of process water for
industries, hospitals etc, air-conditioning, preservation of foods and drugs,
power generation, etc, photo-voltaic (pv) power may be utilized in low to
medium power applications and in remote areas, in such uses as communication
stations, rural television and radio, water pumping, refrigeration etc, which
require power of the order of 1-10 KW. It may also be used for power supply to
remote villages not connected to the national grid. It is even possible to generate
PV power for feeding into the national grid.
        Most solar thermal technologies can be supported by the technical
expertise existing within the country. However the industrial infrastructure
needs to be strengthened for effective utilization of energy resource. Photovoltaic
system components require more sophisticated technologies for their
manufacture, particularly as regards the photo-voltaic cells.
        Apart from traditional open air drying, solar energy technologies are not
much used in Nigeria. Nevertheless they have tremendous potentials. Much
work needs to be done in the development and popularization of applications
equipment and systems, solar and environmental data acquisition and
development of standards for materials, design and equipment manufacture.

Accordingly, the policy provides that: -
i.    The nation shall aggressively pursue the incorporation of solar energy into
      the nation‟s energy mix.
ii.   The nation shall keep abreast with world-wide developments in solar
      energy technology. This is with a view to realizing the following
      objectives: -
      i.     To develop the nation‟s capability in the utilization of solar energy.

       ii.    To use solar energy as a complementary energy resource in the
              rural and urban areas.
       iii.   To develop solar energy conversion technologies locally.

        Under the Energy Policy, the biomass resources of Nigeria has been
identified as wood, forage grasses and shrubs, animal wastes and wastes arising
from forestry, agricultural, municipal and industrial activities, as well as aquatic
biomass. The biomass energy resources of the nation have been estimated to be
        Plant biomass can be converted to produce solid briquettes which can
then be utilized as fuel for small-scale industries. Biogas digesters of various
designs are capable of sustaining household, industrial and institutional energy
needs. It has indeed been shown that the remaining biomass material after
digestion is a better fertilizer than the original waste. The intensive application of
this will reduce the existing heavy reliance on chemical fertilizers.
        The abundant energy available from biomass can be meaningfully
introduced into the nation‟s energy mix through the development of a
comprehensive programme. The programme should encompass fully supported
research, development, demonstration and manpower training components.
        Hence under the energy policy, the nation shall effectively harness non-
fuelwood biomass energy resources and integrate them with other energy
resources. This is with a view to realizing the following objectives: -
i.      To promote biomass as a supplementary energy resource especially in the
        rural areas.
ii.     To promote efficient use of agricultural residues, animal and human
        wastes energy sources.

         In view of the energy available in the wind, the Policy appreciates the
need to embark on a wind energy development programme. The Policy states
that: -
i.       The nation shall commercially develop its wind energy resources and
         integrate this with other energy resources into a balanced energy mix.
ii.      The nation shall take necessary measures to ensure that this form of
         energy is harnessed at reasonable cost in the rural areas. This is with a
         view to achieving the following objectives: -
    i.       To develop wind energy technology in areas where it is technically
    ii.      To use wind energy for provision of power to rural areas and remote
             communities far removed from the national grid.
    iii.     To develop wind energy to supplement other energy resources.

2.5    Nigeria Policy      Goals:    Renewable      and    Efficient   Energy/Rural

        In Nigeria, there is no national policy dedicated specifically to energy
efficiency and renewable energy or its applications to rural areas.23 There are,
however, other policy instruments on the environment and energy that may be
relevant to supporting such applications. The Nigerian National Policy on the
Environment provides that the goal of the Policy on the Environment is to
achieve sustainable development in Nigeria, and in particular to:
     Secure a quality of environment adequate for good health and well being;
     Conserve and use the environment and natural resources for the benefit of
        present and future generations;

Strategies to achieve this objective include:
     Implementing a detailed Environmental Impact Assessment (EIA) on all
       planned energy projects backed by a detailed baseline ecological data
       against which subsequent environmental changes and/or impacts can be
     Developing a rational National Energy Utilization Master-Plan that
       balances the need for conservation with the utilization of premium energy
       resources for premium socio-economic needs;
     Encouraging the use of energy forms that are environmentally safe and
       sustainable, particularly solar energy;
     Promoting and encouraging research for the development and use of
       various locally available energy sources especially non-conventional
       resources such as geothermal, solar, wind and other complex forms of
       hydrocarbons other than oil and coal.

       The Electric Power Implementation Committee with the advice of
reputable power sector consultants put together a power policy, which was
approved by the Federal Executive Council in March 2001. The policy24 envisages
a three stage legal and regulatory reform of the power sector. The first transition
stage is characterized by private power generation through independent Power
Producers (IPPs), and Emergency Power Producers (EPPs). There will be a
corporate restructuring, unbundling and privatization of NEPA through sale or
license of all thermal plants to private operators or concessionaires and transfer
of management, ownership and control of selected distribution companies.
       Secondly, the policy has a medium term which will create competition
among generating companies; encourage energy trading between generation and
distribution companies primarily on the basis of bilateral contracts through
contact exchanges and sales. There will also be payment of full price by
generators for natural gas and other fuels and sale of energy by companies
generating power in excess of their needs to distribution companies
       Thirdly, there will be competition structure, which envisaged that during
this phase, the various power generation, transmission and distribution
companies would be operating optimally. Additionally, there would be

economic pricing of electricity to cover the full costs of supply, including
expectation of a reasonable, risk-adjusted rate of return on capital. It will create
opportunity for large industrial consumers to choose their suppliers and a well
developed wholesale market with formal membership rules, procedures, and full
retail sales competition.
        One of the most important objectives of the National Electric Power Policy
adopted by the Electric Power Sector Reform Implementation Committee and
approved by the National Council on Privatization is to ensure that Nigeria has
an electricity supply industry that can meet the needs of its citizens in the 21st
Century. On rural electrification, the primary policy objective is to expand access
as rapidly as can be afforded in a cost-effective manner.25
        The rural electrification policy includes a full menu of options – grid and
off-grid, mini-grid, non thermal and renewables, while ensuring close co-
ordination of rural electrification expansion with economic development
objectives and encouraging states, local communities as well as the private sector
to develop and contribute financially to rural electrification.
        It is imperative to state that the vision and mission of the Rural
Electrification Agency (REA) which places so much emphasis on “private sector
driven investment” “reasonable returns on investment” “appropriate tariff” and
without a reference to the contribution of communities will defeat the obvious
ends of rural electrification which in most instances can not be commercially and
financially reward driven. The need for government subsidy or fiscal mechanism
to guarantee access to electricity for rural dwellers, where the “return on
investment” cannot motivate the private sector, needs to be emphasized in the
conceptualizations of REA.26
        Trust agents would be appointed to mange the Rural Electrification Fund
while the Fund Management Team will develop policies and criteria for
administering the Fund, ensuring equitable funds allocation to all six geo-
political zones.
        It is acknowledged that REA has been in existence for just about a year
now, so it may be considered too early in the day to undertake an assessment of
its performance. But at the same time, it should be a matter of concern that about
a year after this agency was set up, virtually nothing has been heard about it in
respect of the activities it has carried out or plans to carry out in line with its
vision, mission, functions, objectives etc. This is more so as one of its targets is
increasing access to electricity in the rural areas by 10% in the year 2007.

        What legislative measures can best advance rural applications of energy
efficiency and renewable energy in developing countries?27
        In most jurisdictions, a principal law of the power sector usually
establishes an electricity regulatory board or other regulatory agencies with

powers to process and recommend applications for licenses, set, review and
adjust transmission and distribution tariffs, enforce environmental and safety
regulations, investigate complaints, ensure there is competition and approve
power purchase contracts and transmission and distribution contracts. The
provisions are usually broad and permissive, with the enactment of subsidiary
legislation or regulations to deal with specific aspects of electricity regulation.
Since the bulk of regulatory matters are usually addressed through subsidiary
legislation or regulations in order to maintain a fair degree of flexibility in
dealing with ever-changing and fluid power sector needs, an opportunity exist
for regulating off-grid electrification in rural areas not easily accessible by the
grid network. Additionally, other statutes may complement the electric power
legislation in the regulation of the power sub-sector by paying specific attention
to rural applications of efficiency and renewable energy.
        Regulations and energy policies have a direct impact on the success of
energy markets generally, market participants and stakeholders, as well as
products and services. However, the exact nature and scope of this impact will
depend on the effectiveness of the implementing agencies or institutions.
Regulatory institutions can either promote or defeat the goals of regulatory
policy captured in legislation or regulations. Every regulatory institution needs
at least to have:
     A clearly defined organizational structure;
     A hierarchical relationship within its structure;
     Sufficient qualified staffing and financing;
     Strategic policy goals;
     Internal and external reporting requirements;
     Licensing provisions; and
     Consultation, hearing and expeditious approval processes.
Sec 5
        The legislative and regulatory provisions for promotion and regulation of
energy efficiency and renewable energy are addressed below for Nigeria, as
typical of a developing country.
        The 1999 Constitution28 of Nigeria provides the legal basis for off-grid
electrification in rural areas falling within each state of the federation in the form
of renewable energy by empowering the House of Assembly of each state to
establish electric power stations within their respective states, generate and
transmit and distribute electricity to areas not covered by the national grid
system within that state amongst others.29
        The Nigerian Electricity Act30 of 1988 is stated to be “An Act to provide for
the regulation and control of electricity installations, and of the generation,
supply and use of electricity energy.”31 Every undertaking in the development of
the sub-sector must comply with this Act. Section 2 provides as follows:
         “This Act and the regulation made there under shall apply in
        respect of any undertaking for the manufacturing, distribution or

      supply of electricity established by the Government of a State or
      any of its agencies to the same extent as the Act and regulations
      apply in respect of any such undertaking established by any other
      person or authority.”

        The Electric Power Sector Reform Act (EPSRA) was enacted into law in
March 2005 to consolidate and give legal backing to the reforms being
undertaken in the sector. So far, the agencies expected to be set up under it to
drive the reform process such as the Nigerian Electricity Regulatory Commission
(NERC) and the Rural Electrification Agency (REA) have been functioning since
May 2005 and March 2006, respectively. Also in line with the Act, the National
Electric Power Authority (NEPA) ceased to exist and in its place emerged the
Power Holding Company of Nigeria (PHCN). NERC has stated its rulemaking
and regulatory functions.
        PHCN has in itself been restructured and unbundled into 6 generation
companies, 11 distribution companies, and 1 transmission company, which are to
be privatized. Negotiations for the management contract for the transmission
company are at an advanced stage while the public notice for expression of
interest to buy and manage the distribution companies has been published.
Nigeria Electricity Management Company (NEMA) has been incorporated to
manage the legacy liabilities of PHCN.
        The 2005 Act was aimed at deregulating the power sector, developing the
capacity to transmit and distribute the envisaged higher level of generation. This
involved a complete unbundling of the National Electric Power Authority into 18
other independent bodies. The federal government had hoped to generate 10,000
megawatts by December 2007, a figure that many people though was too low for
a population of 140 million. But even this low figure has not been achieved.
South Africa with a population of 47 million generates 36,000mw, Brazil with a
population of 188 million generates 90,000mw while South Korea with a
population of 49 million generates 43,833mw. It is estimated that Nigeria with a
population of 140 million would need to generate 67,012mw to be at par with
Brazil, the lowest of per capita among the three countries. It is further estimated
that to have stable electricity, a country needs about 20 percent excess capacity.
Considering our current constraints that seems a tall order.32
        The reason why we are still far from the target might be that we did not
fully appreciate the enormity of the problem or we did not anticipate that
generator merchants might, as suggested by some people, have decided to
sabotage the efforts of the government or the government itself did not
appreciate that it takes about three or four years to build a power station and
four or five years to build a transmission line, or the past governments did not
understand the dynamics of electricity in development or they simply didn‟t

      President Musa Yar‟Adua has now established an 11-member Presidential
Committee for the Accelerated Expansion of Nigeria‟s Power Infrastructure. He
tasked the Committee to deliver within 18 months the 6,000 additional
megawatts targeted under the National Integrated Power Project, NIPP, as well
as add an extra 11,000 megawatts of power generation capacity by 2011 through
diverse sources.33
      With the coming into force of the EPSRA, and the subsequent
inauguration of the agencies established by it such as NERC, one noticeable
development in the sector has been the licensing of new IPPs. Between August
2006 and June 2007, twenty licenses were issued to IPPs in different parts of the
country. Altogether, they are expected to add about 8,000 MW of electricity to the
national grid when they go into full operation.34

Table 5: -      IPPs, Licensee, Site Location, Capacity, Status and Fuel Type35
SN        NAME OF               SITE        TYPE OF       CAPACITY    STATUS          FUEL
          LICENSEE          LOCATION        LICENSE                                   TYPE
1.    Farm       Electric   Otta, Ogun     Generation     150MW      Project        Gas
      Supply Ltd            State          on-Grid                   Planning
2.    Ethiope    Energy     Ogorode,       Generation     2,800MW    Project        Gas
      Limited               Sapele Delta   on-Grid                   Planning
3.    ICS Power Ltd         Alaoji, Abia   Generation     624MW      Project        Gas
                            State          on-Grid                   Planning
4.    Suppertek    Nig.     Akwete,        Generation     1,000MW    Project        Gas
      Ltd                   Abia State     on-Grid                   Planning
5.    Ikorodu Industrial    Ikorodu        Distribution              Completed      Gas
      Power Ltd             Lagos State
6.    Mabon Ltd             Dadinkowa,     Generation     39MW       Under          Hydro
                            Gombe State                              Construction
7.    Geometric Power       Aba, Abia      Generation     1,000MW    Project        Gas
      Ltd                   State          on-Grid                   Planning
8.    Aba Power Ltd         Aba, Abia      Distribution
9.    Westcom               Sagamu,        Generation     1,000MW    Project        Gas
      Technologies    &     Ogun State     on-Grid                   Planning
      Energy    Services
10.   Anita      Energy     Agbara,        Generation     90MW       Project        Gas
      Limited               Lagos State    on-Grid                   Planning
11.   Lotus & Bresson       Magboro,       Generation     60MW       Project        Gas
      Power Company         Ogun State     on-Grid                   Planning
12.   First Independent     Omoku          Generation     150MW                     Gas
      Power Co. Ltd         Rivers State   on-Grid
13.   First Independent     Trans-         Generation     136MW                     Gas
      Power Co. Ltd         Amadi          on-Grid
                            Rivers State
14.   First Independent     Eleme          Generation     95MW                      Gas

      Power Co. Ltd        Rivers State    on-Grid
15.   Ibato       Power    Ibato, Ogun     Generation   200MW   Project        Gas
      Station              State           on-Grid              Planning
16.   Hudson      Power    Warawa,         Generation   150MW   Project        Gas
      Limited              Ogun State      on-Grid              Planning
17.   Shell   Petroleum    Afam      VI,   Generation   642MW   In Operation   Gas
      Dev. Co. Ltd         Rivers State    on-Grid
18.   Ewekoro     Power    Ewekoro,        Generation   13MW                   Gas
      Ltd                  Ogun State      off-Grid
19.   Ikorodu Industrial   Ikorodu,        Embedded     39MW                   Gas
      Power Ltd            Lagos State     Generation
20.   Westcom              Buena Vista     Generation   50MW                   Gas
      Technologies    &    Estate,         off-Grid
      Energy    Services   Lekki, Lagos
      Ltd.                 State

        The total expected on-grid capacity is 8,136MW with 4,342 expected in the
first phase while the second and third phases will produce 3,478MW and 316MW
respectively. The status of the different IPPs gives an idea of what contribution
they are making to the availability of electric power in the country at present.
Many of them are still at the project planning stage. Some have moved on to the
stage of plant construction, one has been completed (but ostensibly not yet in
operation) while only one is in operation. So invariably, the licensed IPPs have
made little or no contribution at all to the improvement of the electricity supply
situation in the country so far.36
        An independent source gives the following rating of functional IPPs:

Table 6: - Current Generation of Functional IPPs
Plant                            Rating MW                       June 2007 MW
Ajaokuta                         80                              36
AES (Lagos)                      270                             216
AGIP Okpal                       450                             239
Rivers                           30                              53
Total                            830                             544
Source: Arif Mohluddin, Principal, CPCS Transcom, 2 nd Power Nigeria Conference, 2007,
Embracing privatization of the Power Sector-Chances for Success at p.8

        At a glance, it can be seen that even the IPPs in operation generate below
their installed capacity.
        How then are the PHCN successor companies and the NIPP faring? In the
case of the PHCN successor companies, it is obvious by the poor state of
electricity that there has been no improvement in their performance as they are
still producing below installed capacity. If in the past, the poor performance of
PHCN‟s predecessor NEPA, could be attributed to poor funding, this excuse can
no loner be tenable because of the massive injection of funds into it in the past
eight years. By PHCN‟s admission, N264 billion had been released to it in the
past eight years, though if all money appropriated to it during the period were to

be released to it, its total receipts would have been N395 billion. This amount
does not represent the overall government input into the sector during the
period as several billions were spent separately on the NIPP and the Niger Delta
Power Projects. Other funds that have gone into the sector during the period
have come from private investors, state governments, debt relief gain and
multilateral agencies, etc.
        As the box below shows, in 2006, the sum of N100 billion released from
external debt services, known as Debt Relief Gains (DRGs) was allocated to fund
projects in ministries, departments and agencies whose mandates are crucial to
the attainment of the MDGs.37 Power and Steel came fourth, behind Health,
Water and Education as the MDAs that received the highest allocation. This in
itself further underscores the importance attached to the sector.

Box 1: Sectoral Distribution of Debt Relief Gains

 Sectors                                     %                Amount Due
 Health                                      21.3             21,300,000,000.00
 Education                                   17.8             17,800,000,000.00
 Water                                       19.2             19,200,000,000.00
 Works                                       9.9              9,900,000,000.00
 Power and Steel                             17.0             17,000,000,000.00
 Agriculture                                 8.7              8,700,000,000.00
 Environment                                 1.5              1,500,000,000.00
 Women Affairs                               1.0              1,000,000,000.00
 Intergovernmental/Youth                     1.0              1,000,000,000.00
 Housing and Urban Development               0.5              500,000,000.00

 OPEN38                                      1.0              1,000,000,000.00

        Specifically, N16,961,839,096 of the DRGs was to be spent by the Federal
Government on Rural electrification project. The projects, for good measure were
classified into three groups. These are 443 ongoing rural electrification projects
which were given the highest vote of N12,145,841,803; 119 ongoing projects at
stringing level to which the sum of N3,217,047,369 was allocated and 113
ongoing substation building projects which received an allocation of

       However, the issue of crucial concern is the use to which the N264 billion
received by PHCN has been put. This money was meant to be used by PHCN to
improve the performance level of its plants, now grouped into 18 successor
companies. But instead of improvement, there has only been deterioration in the
services these companies are offering. An independent source rates their current
performance as follows:

Box 2:- Current Performance of Successor Generating Plants
Plant                            Rating MW                  June 2007 MW
Kainji, Jebba                    1,280                      360
Shiroro                          600                        378
Egbin                            1,320                      545
Sapele                           175                        65
Afam                             115                        260
Ughelli/Delta                    900                        272
                                 4,390                      1,880
Source: Arif Mohluddin, Principal CPCS Transcom, 2       nd Power Nigeria Conference, 2007,

Embracing Privatization of the Power Sector-Chances for Success, p.8.

       It is the belief of many stakeholders both within and outside the sector
that much still needs to be done to make the 18 companies and by extension, the
entire electric power industry in the country performance drive. For instance,
there seems to be a misconception that electric power supply begins and ends
with generation. Most of the discussions and planning about improvement of the
supply situation always revolve around the megawatts of electricity that can or
should be generated. But the transmission and distribution systems are not only
crucial legs of the electricity tripod, but are also in terrible shape in the country.40
       With respect to hydroelectric power, the Water Resources Act governs
water resources development in Nigeria.41 This Act establishes the legal
framework for the development of water resources. It places ultimate
responsibility for the proper development of the nation‟s water resources on the
Ministry of Water Resources and Rural Development. The Act vests rights to the
use and control of water resources in the state.42 This does not preclude the rights
of individuals to take and use water for domestic43 or industrial purposes
including the generation of hydropower.44 Nevertheless, a license is required for
any person to operate any hydraulic work on the waterways or underground. 45
The mode of application is spelled out under Section 10 of the Act that requires
an application for the grant of a license to carry out hydraulic works to be made
to the Secretary in such form and manner and containing or be accompanied by
such information and document as the Secretary may from time to time
       Bio-fuels in the forms of wood, charcoal, and biomass constitute at least
70% of the energy consumed all over Nigeria. The demand for wood fuels, for
example, is expected to rise by about 350% by 2030 and beyond, while urban

consumption is expected to grow by 250% within the same period.47 The
requirement for an environmental impact assessment in respect of any project
embarked upon by any private or public authority with likely environmental
impact under the Environmental Impact Assessment Act No. 86 1992 all combine
to reduce the trend towards massive deforestation in Nigeria.48
        Other renewable energy resources that could in principle meet almost all
Nigeria‟s needs, such as solar power, wind power, geothermal energy and wave
power are not given any specific regulatory prominence. Nevertheless, the
Energy Commission of Nigeria Act established the Energy Commission of
Nigeria and charged it with responsibility for coordinating and general
surveillance over systematic development of the various energy resources of
Nigeria including new and renewable energy sources.49 The Jigawa Alternative
Energy Trust fund, with the United States Department of Energy is constructing
a solar electric project in Jigawa State. The project is a result of a $600,000 solar
rural electrification and water-pumping project for 3 villages in Jigawa State.50
        In Nigeria, the regulatory institution specific to efficiency and renewable
energy is the Energy Commission of Nigeria (ECN), which was established by
the ECN Act No. 109, Laws of the Federation of Nigeria (LFN) 2004, as the
agency responsible for the co-ordination and general surveillance over the
systematic development of energy resources of Nigeria.51 S. 1(2) of the ECN Act
provides for the composition of the Commission. The Departments of the
Commission include that of Energy Planning and Analysis (including energy
efficiency demand management and conservation, rural energy, and alternative
and new and renewable energy sources).52 The ECN is charged with
responsibility for the strategic planning and co-ordination of national policies in
the field of energy in all its ramifications and, includes amongst others:
preparation, after consultation with such agencies of government whose
functions relate to the field of energy development or supply as the Commission
considers appropriate, periodic master plans for the balanced and coordinated
development of energy, including recommendations for the exploitation of new
sources of energy as and when considered necessary. It is also charged with
laying down guidelines on the utilization of energy types for specific purposes
and in a prescribed sequence.
        The Energy Commission of Nigeria has produced a National Energy
Master Plan for Nigeria. The Master Plan of 2003 which is expected to ensure a
guided implementation of National Energy Policy focuses on all energy sources,
energy utilization, manpower development, energy financing, energy, data bank,
energy planning, implementation, monitoring and evolution and other cross-
cutting issues.
        It was then described as a blue print for sustainable development, supply
and utilization of the various sources of energy available within the country and
for the use of these resources in international trade and cooperation.

       The NEM is therefore an implementation plan and a roadmap for the
realization of the energy policy objectives given the strategies enunciated in the
NEP. For every sector in the economy, the NEM details the programs or activities
required for each strategy together with their associated executed, collaboration
and funding agencies and their timelines which are the short term (2006-2009),
medium term (2010-2015) and Long term (2016-2030). Monitoring and evaluating
strategies for the implementation plans have also been developed.
       The National Environmental Standards and Regulations Enforcement
Agency (Establishment) Act, 2007 Act No. 25, provides under section 2 that the
agency, shall, subject to the provisions of this Act, have responsibility for the
protection and development of the environment, biodiversity conservation and
sustainable development of Nigeria‟s natural resources in general and
environmental technology including coordination and liaison with relevant
stakeholders within and outside Nigeria on matters of enforcement of
environmental standards, regulations, rules, laws, policies and guidelines.
       Under section 3(1) of the NESREA Act 2007 the Agency shall:
    a) Enforce compliance with the provisions of international agreements,
       protocols, conventions and treaties on the environment, including climate
       change, biodiversity, conservation, desertification, forestry, oil and gas,
       chemicals, hazardous wastes, ozone depletion, marine and wild life,
       pollution, sanitation and such other environmental agreements as may
       from time to time come into force;

        Under section 20(1) the Agency may make regulations setting
specifications and standards to protect and enhance the quality of Nigeria‟s air
resources, so as to promote the pubic health or welfare and the natural
developing and productive capacity of the nations‟ human, animal, marine or
plant life including, in particular:
   a) the most appropriate means to prevent and combat various atmospheric
   b) control of atmospheric pollution originating from energy sources,
        including that produced by aircraft and other self-propelled vehicles,
        industries, factories and power generating situations or facilities;
   c) standards applicable to emission from any new mobile or stationary
        source which in the Agency‟s judgement causes or contributes to air
        pollution which may reasonable be anticipated to endanger public health
        or welfare; and
   d) the use of appropriate means to reduce emission to permissible levels.

      Although, existing legislations in Nigeria are skewed towards fossil fuels
and secondarily hydro-power, there is recognition that an appropriate legal
framework is a prerequisite for maximizing investment opportunities in the
renewable energy sector. A Nigerian National Energy Policy similar to that of the

White Paper on the Energy Policy of the Republic of South Africa in December
1998 will better articulate the framework for rural applications of efficiency and
renewable energy.53


3.1     Challenges and Barriers to Climate Change Mitigation in Nigeria
        Substantial data gaps exist in the database for both the emissions
inventories and mitigation analyses considered above.54 For instance, in the
downstream energy sector, data is obtained from the Nigerian National
Petroleum Corporation (NNPC) Annual Reports and National Bureau of
Statistics (NBS) Annual Abstracts of Statistics, while other reports provide
annual data on petroleum products consumption by the whole country, and for
each state of the federation. These reports are lacking on sectoral energy
consumption, which are necessary inputs to emissions inventories. The basic
downstream petroleum products consumption data currently lacking include:
     gasoline consumption by road transport and other transport sectors,
        especially navigation;
     diesel consumption by road transport and other transport sectors,
        especially navigation;
     coal consumption by rail transport, households and industries;
     diesel and fuel oil consumption by industrial boilers;
     diesel and gasoline consumption for power generation in industries;
     diesel and gasoline consumption by private electric generators;
     diesel consumption by off-road transport sectors, forestry and agriculture;
     consumption of international bunker fuels.
        Similar gaps in the database were observed in all other emissions-relevant
sectors such as the upstream energy sector, industries, agriculture, land-use
change and wastes management. The back-up statistics, which could have made
the estimation of petroleum products consumption in the downstream sectors
possible, are also currently weak. For instance, there are no statistics on the total
vehicles in Nigeria from year to year. The data published annually is the annual
new vehicle registrations. This has been used to build up the vehicle population
statistics using vehicle survival statistics from the gasoline consumption by road
transport and other transport sectors, especially navigation; diesel consumption
by road transport and other transport sectors, especially navigation; energy
consumption by public and business sector enterprises, including hotels, schools
and other institutions; the partition in the consumption of aviation kerosene
between local and international aviation; and United States, which may be

remarkably different from that of Nigeria. The aircraft fleet and their fuel
consumption capacities and annual flying houses could have been used to
evaluate fuel consumption from domestic and international aviation. However,
such data are not yet accessible. Also, the industrial consumption of petroleum
products could have been inferred if energy consumption per unit production in
various industrial sectors was available. This means that substantial effort must
be made in the next few years to build up these support statistics for more
accurate estimates of downstream energy sector fuel consumption.
       Apart from a few local emissions factors measurement undertaken for
gas-flares, gas-fired power plants and oil-field facilities such as turbines, pumps
and heaters, the majority of emissions factors used in the national inventory are
obtained from existing literature. The largest source is the Intergovernmental
Panel on Climate Change (IPCC) default emissions factors (1995), EPA AP-42
and OECD/IEA/IPCC (1991, 1994). Other sources were from journal articles,
which were adequately referenced in the reports. The question, which arises
from this, is how representative are these emissions factors of the local emissions
relevant technologies which they represent? This forms the basis of the level of
uncertainty currently associated with the emissions estimates. The quantification
of such uncertainties is yet to be undertaken.
       There were also mitigation assessment data gaps identified in the forestry
section, as follows:
     The mitigation analysis for both the energy and forestry sectors was
       carried out for only CO emissions. Non-CO GHG emissions were not
     For other sectors such as agriculture, land-use and wastes management,
       both CO and non-CO emissions mitigation analyses were not carried out.
     The current data on CO and non-CO emissions coefficients for Nigeria are
       grossly inadequate.
     Default values from IPCC data sources are still being used.
       A number of barriers to implementing and/or improving future national
mitigation analysis identified in both the energy and forestry sectors include:
     low literacy level;
     lack of/low level of awareness of the mitigation technologies and their
       potential benefits;
     inefficient energy use;
     inappropriate energy pricing;
     financial constraints;
     low income-level;
     technological incapability; and
     pressures from population growth.
       Although national GHG inventories have been undertaken to cover all the
broad sectors for the year 1988, 1990 and 1994 as well as for limited sectors such
as industries (1996 to 1998), savannah and land-use change (1994, 1995), the data

obtained were lacking in many respects and could be improved. Additionally,
the tempo of activities have not been sustainable, which explains why Nigeria
has not been able to update national GHG inventories beyond 1994, even as the
earlier data contain substantial gaps in time and by activities/sectors.
        A number of barriers were identified as militating against sustainable
assessment of GHG emissions in Nigeria:
    lack of adequate spread of human resources;
    lack of coordination for data collection and data archival storage, and
        restricted access to raw data files of relevant agencies collecting emissions-
        relevant data;
    lack of a network of institutions established with the mandate to
        undertake national GHG inventories and the dissemination of material
        from such a database;
    lack of back-up data sources that are needed to improve downstream
        energy consumption data, land-use change data, agricultural and
        industrial databases, etc.;
    most of the studies carried out for other purposes that could have
        provided backup data are already obsolete;
    lack of local financial resource commitments and budget for inventories
        and mitigation assessment by the Federal Ministry of Environment
        despite the value of GHG inventories and mitigation options assessment
        data to the national economy; and
    the non-availability of electronic data archival storage and retrieval
        systems for activity data, emissions factors and previous emissions

3.2    Challenges and Barriers to Renewable and Alternative Electricity
       Sources in Nigeria
3.2.1 Renewable Electricity
       In accordance with the provision of EPSRA Act 2005, it is expected that
targets on access to electricity will be met through grid based extension,
independent mini-grids for remote areas with concentrated loads where grid
service is not economical or will take many years to come and stand alone
renewable electricity systems for remote areas with scattered small loads. The
interest here is on renewable energy which is defined to include energy from
solar, wind, biomass cogeneration and gasification, less intrusive hydro,
geothermal and hydrogen energy.55
       The Federal Ministry of Power and Steel has developed guidelines for
renewable electricity.56 The objectives of the Guidelines include the
diversification of sources of electricity, improvement of energy security,
increasing access to electricity nationwide particularly in the rural areas,
stimulation of employment generation through expanded renewable energy
sources, enhancing technological acquisition through domestic manufacture of

renewable energy components. Other objectives include the reduction of
household and outdoor air pollution as well as to contribute to the abatement of
green house gas emissions, and thus contribute to improved health and overall
social development.
       The current total contribution of renewable energy to the energy mix is
about 35MW composed of 30MW small hydropower and 5MW solar PV.57 A
number of barriers were identified as militating against the development of the
renewable electricity industry and they include:
    Policy and regulatory issues, including guarantees of access to the grid for
       renewable energy;
    Financial and investment barriers since renewable energy have high initial
       costs and Nigeria lacks manufacturing capacity for components of
       renewable energy. Average electricity tariff in Nigeria is about 6.75 per
       KW-h – about 5cents. The average cost of sources of renewable electricity
       for mini hydro is 5-10 cents, solar PV is 20-40 cents, biomass power 5-12
       cents, wind power 6-10 cents. Thus, financial incentives for Market entry
       are currently lacking. Incidentally, these relatively higher cost initiatives
       may be needed to satisfy the electricity needs of the poor who cannot
       afford high tariffs and are not in governments to influence favourable
       policies for renewable sources of energy;
    Technological barriers of full import dependent renewable facilities;
    Low public awareness and poor standards and quality control from the
       regulatory agencies (such as SON);
    Inadequate resources assessment; and,
    Intermittency of resource availability.

       While not dismissing the idea of the relatively high cost of renewable
energy, it is important to appreciate the concept of cost in its totality. It has been
postulated that while commodity cost depend on the volume of supply, the
economic of conservation and end use efficiency is built on reduced supply,
focusing instead on quality of service. Similarly, micro-turbines and
appropriately scaled power plant (under 50MW) may have higher unit cost, but
their advantage is in being more easily sited near loads than large power plants –
thereby saving transmission and distribution losses, and their much lower
capital and environmental risks, can offset higher generation costs.58

3.2.2 Alternative Sources of Electricity –Nuclear Energy
       Even if the country were to be able to generate sufficient electricity for its
population from the thermal, hydro and gas sources, there would still be the
need to explore other available options. This is the practice world wide.
Countries are trying out electric power sources that may not only be cheaper but
are also sustainable and environmentally friendly. Coal, solar energy and nuclear

energy are for the above three reasons currently being promoted as alternative
sources of electricity. The focus of this discussion will be on nuclear energy.

a)     Nuclear Energy
       There have been expressions of interest at the highest levels of
government in the country for the deployment of nuclear technology for electric
power generation. Former President Olusegun Obasanjo while inaugurating the
Board of the Nigeria Atomic Energy Commission (NAEC) in July 2006 had
stressed that the country‟s aspiration to acquire nuclear power was to deploy it
to peaceful purposes, particularly, electricity generation. Thus he declared:
       “The global picture on the utilization of nuclear energy for the generation
       of electricity is becoming brighter by the day, and holds some good
       promise for the developing world, particularly for us in Nigeria.”59

        The brighter global picture he was referring to was the new policy
initiative of the United States Government on nuclear energy called the Global
Nuclear Energy Partnership, which seeks to popularize and expand the
generation and use of nuclear electricity in the world while at the same time
making the world more nuclear weapons proliferation resistant. It was
Obasanjo‟s hope that nuclear technology would enable the country to diversify
the electricity generation base beyond oil and gas.
        About a year later, his successor, President Umaru Yar‟adua was to
reiterate this aspiration. Speaking after a briefing on the National Program for
the Deployment of Nuclear Power for Generation of Electricity by Dr. Franklin
Erepamo Osaisai, Director General of National Atomic Energy Commission
(NAEC), he said the country needed to embrace nuclear power to meet its
growing energy needs.60
        Nuclear plants are said to have the advantage of not putting carbon
dioxide in the atmosphere and the cost of its energy is also said to be relatively
cheaper, especially in the long run.
        Nigeria‟s nuclear roadmap, according to Osaisai, is in the shape of a three-
phase framework developed by NAEC and approved by the government which
hopes to generate at least 1,000 megawatts of electricity through nuclear power
by 2017 and to increase this to 4,000 by 2027.61
        But there are reservations in some quarters about the country‟s quest for
nuclear power, even if for electricity generation purposes. For one, the country‟s
energy infrastructure, including its power grid are considered primitive by
international standards. Unless upgraded, they cannot be compatible with a
nuclear energy source.
        Secondly, the cost of building a nuclear power plant is enormous as
conceded by even Osaisai. While declaring that running a nuclear power plant
was more cost effective than other technologies, Osaisai admitted that initial
funding is usually capital intensive. Jon Wolfsthat, a non proliferation fellow at

the Centre for Strategic and International Studies in Washington expects the
country to spend between $1 and $2 billion for a single light water reactor.62
       Procurement of the raw material needed could also be a problem. Though
the country has some deposits of uranium, they remain largely untapped and of
indeterminate quantity. Worldwide, it is estimated that there are enough
uranium reserves to last for at least one hundred years.
       Finally, considering the risks and environmental disasters associated with
improper handling and management of nuclear power like the Chernobyl
disaster and the Three Mile Island disaster in Russia, it is obvious that Nigeria‟s
preparedness in terms of technology and manpower to run nuclear power plants
needs to be doubled. The world is yet to develop a fool-proof technology for
safely handling and storing spent uranium fuel as it remains radioactive and
continues to pose health and environmental danger63 for thousands of years.

        It is evident from the above that the use of renewable energy can lead to
the development of rural industries with attendant job opportunities and thus
contribute to poverty alleviation. The proper management of renewable energy
resources in the rural areas can play an important role in environmental
        As Nigeria‟s economy improves, its per capita greenhouse emissions may
approach those of the developed nations of the world today. This, combined
with continued gas flaring and a large population will further worsen Nigeria‟s
standing as a key emitter of greenhouse gases globally, with all the attendant
consequences on all sectors of the economy, particularly, the energy and
industrial sectors a well as the rural populace and urban poor.
        Although the reforms in the electricity industry has started on the right
note, by the enactment of a new sector law in 2005, the establishment of the
regulatory agency, rule making and fair management of the sector by the agency,
the crises in the energy sector today justifies the need for the sector to be
disciplined by accountability and transparency mechanisms in the management
of energy resources and budgetary allocations for effective separation,
transmission and distribution of electricity nationwide.
        The legislative and regulatory framework for rural applications of
efficiency and renewable energy is a combination of policy instruments seeking
to set clear goals, legislative requirements and subsidiary instruments that
provide legal bases for policy perspectives as well as institutional mechanisms
for policy implementation.
        Renewable energy has a large and geographically widely spread resource
base. However, the following have been observed as obstacles in its application:
     The lack of or inadequate awareness on alternative energy options;
     The lack of reliable data to undertake specific projects;

       Poor or no research and development base or even commercial business
        models contribute to the difficulty of accessing the latest renewable
        energy technology,
     Limited financial resources;
     Insufficient number of personnel qualified to administer energy efficiency
        and renewable energy programs;
     The lack of supporting policies, up-to-date and comprehensive
        regulations, inefficient infrastructure and equipment for their use; and
     Other constraints such as competition from other energy resources,
        mainly fossil fuels.
        An adequate regulatory framework must, therefore, specifically address
these issues in order to put renewable energy squarely on the national agenda.
        Additionally, a law on renewable energy must contain provisions on
qualifications, application, grant, as well as conditions of licenses and incentives
to harness any form of renewable energy including procedures for facilitating
renewable energy technologies through effective implementing institutions. Such
a law must provide for the rights and obligations of both host country, or rural
community and private investors and impose standards.
        An example of the regulatory needs to promote renewable energy may be
found in the treatment of small hydro projects. Hydropower for rural
electrification can help minimize local, regional and global environmental
impacts in the long run, while ensuring people‟s livelihoods.
        These benefits, not just of hydropower, but for all renewable energy
resources, can hardly be realized without a coherent and adequate legislative
and regulatory framework that sets out the policy, laws as well as institutional
mechanisms for concretizing the gains that will flow from rural applications of
renewable energy.
        Furthermore, the sustainability of a national GHG emissions inventory
and climate change mitigation measures require the following, among others: -
     the determination of future emissions and to establish the extent of
        mitigation measures needed to lower emissions without compromising
        sustainable development;
     provision of local financial resource commitments and budget for GHG
        inventories and mitigation options assessment by the Government to
        support the activities of institutions working in this field;
     the identification of relevant projects and activities needed in the short-to-
        medium term to improve current national data on emissions inventories
        and mitigation analysis in Nigeria;
     use as many adaptation strategies as possible to mitigate the adverse
        effects of climate change on, particularly, the energy, industrial and
        agricultural sectors of the Nigerian economy as well as on the rural
        populace and urban poor;

   not one, but a creative range or mix of policy instruments to deal
    effectively with the issues involved in adapting to climate change in

 1.    See A. S Sambo et al: Nigeria‟s Experience on the Application of IAEA‟s Energy Models
       (MAED & WASP) for National Energy Planning (2006). A paper presented during the
       Training Meeting/Workshop on Exchange of Experience in Using IAEA‟s Energy Models
       and Assessment of Further Training Needs, held at the Korea Atomic Energy Research
       Institute, Daejon, Republic of Korea, at p. 9.
 2.    According to President Umaru Musa Yar‟adua: Over 30 million out of 140 million
       Nigerians from various states of the federation are threatened by climate change which
       leads to increased degradation of the ecosystem, desert encroachment and deepens poverty
       of the populace. Quoted from Leadership Newspaper, Abuja, Wednesday March 26, 2008,
       p. 28.
 3.    Epileptic electric power supply is crippling Nigerian small, medium and large scale
       enterprises/industrial sector of the economy: Northern Nigerian State Legislative Speakers
       warned. Quoted in Business Day Newspaper, Abuja Wednesday, February 20, 2008, p. 1.
 4.    See National Energy policy of Nigeria, (2003), in Policies of the Federal Republic of Nigeria,
       (1999-2007) section 8, at pp.271-2.
 5.    See National Bureau of Statistics, Abuja (2006): - National Core Welfare Indicator
       Questionnaire (CWIQ) Survey, Summary Sheet, at p.2.
 6.    See “The Energy Crisis in Nigeria”, in the NewsWatch Magazine, Lagos, Nigeria, March 3,
       2008, pp.1-29.
 7.    See Umar, I.H., Keynote address delivered at a one-day workshop on Nigerian Urban Poor:
       - energy needs and sustainable livelihoods, Lagos, 23rd June 2004, pp.1-13.
 8.    Ibid at pp.3-7.
 9.    Ibid, at p.10, table 5.
 10.   See Sambo A.S., et. al, (2006): - Nigeria‟s Experience on the application of IAEA‟s energy
       models for national Energy Planning. A paper presented at a Training/Workshop on
       exchange of experience in using IAEA‟s energy models and assessment. Held at the Korea
       Atomic Energy Research Institute, Daejon, Republic of Korea, 24-28 April 2006, pp.1-32.
 11.   Ibid at p.7, table 1.
 12.   See generally, The Nigeria Environmental Study/Action Team (NEST), Ibadan, Nigeria,
       and Global Change Strategies International (GCSI), Canada, Project on Nigeria: - Climate
       Change, March 2004, Executive Summary, pp.1-17.
 13.   See generally, UNEP, Nairobi, Kenya, (2007): - UNEP Handbook for Drafting Laws on
       Energy Efficiency and Renewable Energy Resources, at pp.1-10.
 14.   See Worika, I.L., Comparative Law Evaluations of Sustainable energy: - The African
       Perspective. A paper delivered at a Colloquium in Shangai on The Law of Energy for
       sustainable development, November 2003.
 15.   For case studies around the world on micro-financing of rural energy enterprise employing
       energy resources and technologies, see
 16.   Worika, Supra note 14.
 17.   See generally, NEST, Supra note 12: - Review of GHG Emissions Inventories Mitigation
       Assessments and the Framework for the implementation of a national emissions data
       system in Nigeria (Synthesis Report), 2001-2004, pp.1-10.
 18.   See Energy Commission of Nigeria: - Brochure on Major Achievements, (2007) pp.1-7.
 19.   See UNEP Handbook, supra note 13 at pp..25-105.
 20.   See section 7, Policies of the Federal Republic of Nigeria (1999-2007), pp.207-253.
 21.   Ibid at pp.221-2.
 22.   See policies of the Federal Republic of Nigeria, supra note 4, at pp.257-351.
 23.   On rural Electrification Policy, see chapter 7 of the National Electric Power Policy 2001,
       supra note 20, at pp.240-241.
 24.   Ibid at pp.216-218.

25.   Ibid at pp.240-241
26.   See The Guardian Newspaper, Friday, April 27, 2007, p.7, Lagos, Nigeria.
27.   See UNEP Handbook (2007) supra note 13, at pp.106-237.
28.   Cap. C.23 Vol.3, Laws of the Federation of Nigeria, 2004.
29.   Ibid, Section 14 to Part II of the Second Schedule to the Constitution.
30.   Cap.E7 Vol.5, Laws of the Federation of Nigeria, 2004.
31.   Ibid, See the preamble to the Act.
32.   See Newswatch Magazine, supra note 6, at pp.1-15.
33.   Ibid at p.13.
34.   See Eze, O., and Jimmy E.,: - Electric Power Sector Reforms: - Challenges for NEEDS II
      (2007): - Social and Economic Rights Initiative, Lagos, Nigeria, at pp.13-14.
35.   Ibid at pp.14-15, table 2.
36.   Ibid at p.16.
37.   See Understanding Budget 2006, Federal Ministry of Finance, Abuja, p.9.
38.   OPEN stands for Oversight of Public Expenditure under NEEDS Policy document in
39.   See Federal Ministry of Finance, supra note 37.
40.   Osakue, G.O., Operating an effective economic transmission system: - The post
      deregulation challenges, Power Nigeria Conference 2007, held between 3-5 September, at
      Abuja, p.7.
41.   Water Resources Act Cap. W2, Vol.15, Laws of the Federation of Nigeria, 2004.
42.   Section 1(1) provide of the Water Resources Act provides:
      “The right to the use and control of all surface and groundwater and of all water in any
      water course affecting more than one state as described in the schedule to this Decree
      together with the bed and banks thereof, are by virtue of the Decree and without further
      assurance vested in the Government of the federation.”
43.   See S.2 of the Water Resources Act.
44.   Section 3 of the Act states as follows: “Any person or any public authority may acquire a
      right to use or take water from any water-course or any ground water described in the
      schedule to this Decree for any purpose in accordance with the provisions of the Decree
      and any regulation made pursuant thereto.”
45.   Section 9(1) ibid.
46.   The Secretary referred to here is the Secretary charged with the responsibility for matters
      relating to water resources. The Federal Government with the Japanese government‟s
      technical assistance through the Japanese International Co-operation Agency (JICA)
      prepared         a     National        Water      Resources       master      Plan.   URL:
47.   See Adesanya Olugbenga M. “Elysian Energy for a Sustainable Nigeria”
      geis/publications/default/tech_papers/17th_congress/2_3_03.asp. Regulations to stem
      the tide of dwindling forest resources in size and volume can be traced to the basic norm,
      1999 Constitution of Nigeria, which provide in Section 20 that: “it is an obligation of the
      state to protect and improve the environment and safeguard the water, air and land, forest
      and wild life of Nigeria.” Under Article 24 of the African Charter on Human and Peoples‟
      Rights (Ratification and Enforcement) Act, Cap. 10 L.F.N. 1990, “All people shall have the
      right to a general satisfactory environment favourable to their development.”
48.   For         Nigeria‟s           EIA        Act        No.86         of        1992,     see
49.   See S. 1(2) of Cap. 109 L.F.N. 1990. See generally
      1990.html. But see author for actual law.

50. See Jigawa State, NIGERIA, „Extending Opportunities to the Edge of the Desert”
52. S. 1(2)(b).
53. See         “South       Africa       Energy        Policy    Discussion      Document”
    See also
54. See NEST, supra note 17.
55. Defined by the Nigerian Energy master Plan as small (below 30mw), mini (below IMW),
    micro (below 100kw) and peco (below 1kw).
56. In collaboration with the International Centre for Energy, Environment and Development,
57. See Federal Ministry of Power and Steel: - Renewable Electricity Policy Guideline,
    December 2006.
58. See John B., and Mun Y.M.: - Rethinking Reforms in the Electricity Sector: - Power
    Liberalization or Energy Transformation (2006), Centre for Energy and Environmental
    Policy, Abuja.
59. See Vanguard Newspaper, Lagos, Nigeria, August 1, 2006, p.1.
60. See Earth Times, Analysis: - Nigeria‟s Nuclear Ambitions, July 26, 2007, p.1.
61. Ibid at p.2.
62. Ibid, p.1.
63. See Ladan M.T., Materials and Cases on Environmental Law (2004): - Econet Publishers,
    Zaria, Nigeria, at pp.2-5.
64. See Ladan M.T., Biodiversity, Human Rights and Access to Environmental Justice in
    Nigeria (2007): - Faith Publishers Ltd, Zaria, at pp.15-20.


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