Nigeria has struggled with poor power supply for decades, a challenge that is estimated to cost businesses about $29 billion yearly, according to the World Bank.
Nigeria will need substantial additional gas, generation, transmission and distribution infrastructure to meet electricity demands, Nigeria's Minister of Power, Adebayo Adelabu, has said.
Mr Adelabu disclosed this while speaking at the 2nd Domestic Gas and Gas Infrastructure Summit 2023 held in Abuja on Tuesday.
Nigeria has struggled with poor power supply for decades, a challenge that is estimated to cost businesses about $29 billion yearly, according to the World Bank.
The country has the lowest access to electricity globally, with about 92 million persons out of the country's 200 million population lacking access to power, according to the Energy Progress Report 2022 released by Tracking SDG 7.
Speaking on Tuesday, Mr Adelabu said Nigeria, despite being a major global producer of gas and a nation endowed with one of the largest gas reserves in the world, has struggled to deliver sufficient gas to the domestic market amid growing demand.
"With increasing population growth, Nigeria will need substantial additional gas, generation, transmission and distribution infrastructure to meet its electricity demands and it is believed that the much-needed capacity in generation will come from gas to power and renewable energy," Mr Adelabu said.
The minister explained that the importance of gas in the Nigerian economy cannot be overemphasized as gas is a potent source of electricity generation that will sustain the much-needed power for national development.
Presently, he said the on-grid energy mix in Nigeria is dominated by thermal (80 per cent) and hydro (20 per cent) power-generating sources.
"Addressing climate change alongside achieving sustainable development objectives is core to the approach to power sector investments. Natural gas has a role as the energy transition fuel for rapid economic growth and industrialisation.
"It has several characteristics to play in supporting net zero transitions over the coming decades in Nigeria," Mr Adelabu said.
Given the interdependence of the gas and power sectors, he said there is a need for a coordinated approach to policy formulation and implementation by both sectors in order to achieve the government objective of improving energy security and reducing energy poverty.
"You may be aware of the National Renewable Energy and Energy Efficiency Policy in which Nigeria set the vision 30:30:30 with the aim of achieving 30GW of electricity by 2030 with renewable energy contributing 30 per cent of the energy mix.
"The plan is that hydroelectricity (both large and small hydro) will contribute 28 per cent and 19 per cent respectively to the nation's electricity generation mix by 2030," he added.
In his address, the president, Abuja Chamber of Commerce and Industry (ACCI), Al-Mujtaba Abubakar, said natural gas has replaced coal as the fuel of choice for electricity production.
"Globally, natural gas has replaced coal as the fuel of choice for electricity production, with climate and air quality benefits.
"The rapid decrease in the cost of solar, wind and other renewable energy technologies makes these an even better alternative. Gas has a special role in the energy transition as a backup to a renewable-based power system because gas boilers can be turned on almost instantly while starting up a coal-fired power plant takes much longer," Mr Abubakar said.
According to research, he said Nigeria currently accounts for 33 per cent of the total gas reserves in Africa.
"With a reserve base of 36.97 billion barrels of oil and 208.83 trillion cubic feet of gas which represents 33 per cent of Africa's total gas reserves of 620 TCF, Nigeria can be described as a gas-rich nation ranking number one in Africa in reserves with a life index of 94 years.
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"The rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country. This is an opportunity to buy in for the development of our dear nation.
"For us at the Chamber of Commerce, we take advantage of whatever would benefit the business community, improve economic growth, drive investments, and provide much-needed jobs for Nigerians.
"We are glad that this present administration pledged her unalloyed commitment to leveraging the domestic utilization, processing and international export of Nigeria's massive gas resources as a transition fuel to catalyze the fundamental restructuring of the nation's economy for expansive growth during this tenure," he said.
