Lagos — Experts have advised Nigeria to adopt clean energy to address power shortages and the absence of electrification in most rural areas in the West African country.
This recommendation by a leading finance house comes amid the lack of electric energy cited for the slowdown of the much-needed industrial take-off Africa's biggest economy and most populous nation requires.
Insufficient power has in recent times led to a surge in the use generator sets but First Bank National (FBN) Quest noted that for businesses, particularly SMEs, the cost of energy generation via this equipment was depleting profit margins.
Industry experts suggest that businesses suffer an average monthly power outage of 239 hours, equivalent to about two weeks.
In addition, self-generation places pressure on household pockets.
"A shift to renewables is an efficient way to boost power supply, particularly in rural communities," FBN Quest stated.
The think-tank reported that according to a survey carried out by a reputable indigenous polling agency, households with access to on-grid electricity had an average power supply of only 9,2 hours a day in the first half of 2019.
Meanwhile, grid expansion is difficult in rural areas due to non-commercial viability as well as high technical losses.
FBN Quest stated this created significant opportunities for off-grid alternatives to penetrate the rural economy, thereby improving agricultural output from farms as well as general rural electrification.
Solar can provide relatively affordable energy for rural communities across Nigeria.
It complements rapid development of small scale industries and reduces the rural-urban drift, according to FBN.
In light of this, the commissioned a solar hybrid mini grid power plant in the Niger State in December.
Biofuels also have huge potential in Nigeria.
It is anticipated the conversion of oil waste should drive down the cost of self-generation via fuel dependent generators.
The African Development Bank recently announced that it had secured a US$20 million investment in the Metier Sustainable Capital International Fund II.
Nigeria, alongside other sub-Saharan African countries, will be beneficiaries.
The funding is expected to facilitate production of an additional 178.5 megawatts of renewable power for commercial and residential use.