Renewable Energy Masterplan

RENEWABLE ENERGY

MASTER PLAN

REVISED EDITION

C OM M I S
GY
SI
RE
O
EN
F
O
A
N I GE R I
ECN UNDP
NOVEMBER 2012
1
Contents
Acknowledgement iii
Foreword iv
Acronyms v
Executive Summary viii
1.0 Introduction 1
1.1 Preamble 1
1.2 Energy Resources, Energy Supply and the Economy 1
1.3 Drivers of Renewable Energy Development in Nigeria 3
1.4 Objectives of the Renewable Energy Master Plan 3
1.5 Overview of the 1st Edition of the REMP 3
1.6 Overview of Renewable Energy Policies in Nigeria 4
2.0 Renewable Energy Programmes and Targets 6
2.1 Renewable Energy Programmes 6
2.2 Energy Demand and Supply Projections for Nigeria 6
2.3 Renewable Energy Targets/Milestones/Timelines 8
3.0 The Renewable Energy Action Plan 11
3.1 Introduction 11
3.2 Assessment of Resource Base/Data Acquisition 11
3.3 Renewable Energy Policies, Regulations and Institutional Framework 12
3.4 Capacity Building and Skills Development Program 15
3.5 Public Awareness/Sensitization 18
3.6 Development of Financing Options Program 20
3.7 Development of RE Projects 24
3.8 Incentives for RE Development 31
3.9 Research and Development 34
3.10 Standards, Codes of Practice and Specifications 37
3.11 Local Manufacturing & Commercialization 39
4.0 Economic and Fiscal Incentives 41
4.1 Introduction 41
4.2 Economic Incentives 41
4.3 Fiscal Incentives 42
5.0 Risk Identification and Analysis 44
5.1 Introduction 44
5.2 Policy and Political Risks 44
5.3 Market Risks 45
5.4 International Development Risks 47
5.5 Standards and Quality Control Risks 48
5.6 Research and Development Risks 49
5.7 Environmental Risks 49
6.0 Conclusion 51
ii
Acknowledgment
The Energy Commission of Nigeria wishes to express its sincere gratitude to the United
Nations Development Programme (UNDP) for the financial support provided for the
review of the 2005 draft Renewable Energy Master Plan (REMP). This draft review was
therefore carried out in 2011 by the Grayfun International Limited under contract
Number: ECN/UNDP/7CP/2011A of the UNDP. The invaluable criticisms by various
national and other international stakeholders expressed and conveyed in various fora that
added value to this review is also highly appreciated. Finally, the editorial work carried
out by Prof. E. J. Bala, Director, Renewable Energy Department and Engr. O. N.
Ekpenyong, Deputy Director, Energy Management, Training and Manpower
Development Department of the Energy Commission of Nigeria is hereby duly
acknowledged.
Prof. A. S. Sambo, OON, NPON

Director General/CEO,
Energy Commission of Nigeria
iii
Foreword
The development of renewable energy is central in the National Energy Policy as well as
the National Energy Master Plan (NEMP). Renewable energy reduces sole dependence
on fossil fuels and thus improves security of energy supply, reduces greenhouse gas
emissions creating environmental and social benefits, while delivering green jobs to the
economy. The Renewable Energy Master Plan (REMP) sets out in the short, medium and
long terms within the national energy supply mix as well as articulate strategic approach
and measures to meet the targets.
The Nigerian government’s commitment to accelerating the development of renewable

energy in the country is set out in the National Energy Policy and the Vision 2020-20.
For Nigeria to be among the twenty (20) largest economies in the world by 2020,
adequate and reliable energy supply, climate change mitigation and adaptation and
creation of employment, which are inter-related challenges, must be addressed through
the transformation of Nigeria’s economy from one based mainly on fossil fuel to a low
carbon economy based around renewable energy and energy efficiency.
Government’s ambitions for renewable energy and the related national targets are in line
with global quest for a long term energy security and clean environment for sustainable
development.
An interrelated and integrated approach, involving all relevant public sector Ministries,
Departments and Agencies in all tiers of government and the private sector will be critical
for delivery of this plan over the next decade. In setting out to achieve a significant
transformation of the energy landscape, Government recognizes the strategic role of the
public and private sectors in supporting the new infrastructure required to deliver change.
This challenge will need to be progressively addressed in the course of the
implementation of the REMP.
This REMP is therefore a roadmap for actualization of Government’s commitment to

create the necessary enabling environment for sustainable energy supply for national
development with active participation of the private sector. It is divided in to programmes
with targets, timelines and activities. Incentives to promote the attainment of the
programmes as well as generally grow the renewable energy market are also provided.
Some risks have been identified and highlighted.
Prof. Bassey Ewa Okon

Honorable Minister,
Federal Ministry of Science and Technology
Abuja
iv
Acronyms
AC Alternating Current
ADP Agricultural Development Programme
AfDB African Development Bank
APPA African Petroleum Producers Association
ARCEDEM African Regional Centre for Engineering Design and Manufacture
ASDB Asian Development Bank
ASL Above Sea Level
AU African Union
BOI Bank of Industry
CASHPP Capital Alliance for Small Hydro Power
CBN Central Bank of Nigeria
CDA Caribbean Development Authority
CO2 Carbon dioxide
DC Direct Current
DPR Department of Petroleum Resources
DPs Development Partners
DTCD Department of Technical Cooperation for Development
ECN Energy Commission of Nigeria
ECOWAS Economic Community of West African States
EIA Environmental Impact Assessment
EIA Energy Information Administration (US Department of Energy)
EMV Expected Monetary Value
ERCs Energy Research Centres
FAO Food and Agricultural Organization
FCT Federal Capital Territory, Abuja
FEPA Federal Environmental Protection Agency
FIRS Federal Inland Revenue Service
FMA & RD Federal Ministry of Agriculture and Rural Development
FMAv Federal Ministry of Aviation
FMoD Federal Ministry of Defence
FMEd Federal Ministry of Education
FMEnv Federal Ministry of Environment
FMF Federal Ministry of Finance
FMH&UD Federal Ministry of Housing & Urban Development
FMoI Federal Ministry of Information
FMJ Federal Ministry of Justice
FMoN-D Federal Ministry of Niger Delta
FMoP Federal Ministry of Power
FMST Federal Ministry of Science and Technology
FMT&I Federal Ministry of Trade and Investment
FMW&SD Federal Ministry of Women Affairs and Social Development
FMWR Federal Ministry of Water Resources
FMYD Federal Ministry of Youth Development
FORMECU Forestry Monitoring and Evaluation Coordinating Unit
GEF Global Environmental Facility
GJ Giga Joule (Giga = 109)
GW Gigawatt
GWh Gigawatt-hour
v
Ha Hectares
HGS High growth scenario
IAEA International Atomic Energy Agency
ICRC Infrastructure Concession Regulatory Commission
IC – SHP International Centre for Small Hydro
IDB Inter-American Development Bank
IMF International Monetary Fund
IPP Independent Power Producer
ITF Inter-Tropical Front
Kg Kilogramme
kJ Kilojoule
Km/h Kilometre/hour
kW Kilowatt
KWh/m2 Kilowatt hour per square meter
kWh Kilowatt-hour
LHP Large Hydro Power
LGA Local Government Area
LGS Low growth scenario
M Metre
M3 Cubic Metre
M3/s Cubic Meter per Second
MAED Model for the Analysis of Energy Demand
MAN Manufacturers Association of Nigeria
MCM Million Cubic Meters
MESSAGE Model for the Energy Supply Strategy Alternatives & their General
Environmental Impact
MFO Market Facilitation Organization
MJ Megajoule
MOU Memorandum of Understanding
MPR Ministry of Petroleum Resources
MToe Million Tons of oil equivalent
MW Megawatt
MWh Megawatt-hour
NACCIMA Nigerian Assoc. of Chambers of Commerce, Industry, Mines & Agric.
NAPEP National Poverty Eradication Programme
NAPTIN National Power Training Institute of Nigeria
NARICT National Research Institute for Chemical Technology
NASENI National Agency for Science and Engineering Infrastructure
NASS National Assembly
NBRRI National Building and Roads Research Institute
NBS National Bureau of Statistics
NBTE National Board for Technical Education
NCAM National Centre for Agricultural Mechanization
NCCE Nigerian Commission for Colleges of Education
NCERD National Centre for Energy Research and Development
NDE National Directorate of Employment
NEEDS National Economic Empowerment and Development Strategy
NEP National Energy Policy
NEPA National Electric Power Authority
NEPAD New Partnership for African Development
vi
NERC Nigerian Electricity Regulatory Commission
NERDP New Energy Research and Development Programme
NESREA National Environmental Standards and Regulations Enforcement Agency
NGO Non Governmental Organization
NIMET Nigerian Meteorological Agency
NIMOR Nigerian Institute of Marine and Oceanographic Research
NIPC Nigerian Invesment Promotion Commission
NIREDA Nigerian Renewable Energy Development Agency
NNPC Nigeria National Petroleum Corporation
NNRA Nigerian Nuclear Regulatory Authority
NOA National Orientation Agency
NPC National Planning Commission
NRSE New and Renewable Sources of Energy
NUC National Universities Commission
NYSC National Youth Service Corps
O&M Operation and Maintenance
OPEC Organization of Petroleum Exporting Countries
OTEC Ocean Thermal Energy Conversions
PJ Picojoule
PSP Private Sector Participation
PTDF Petroleum Technology Development Fund
PV Photo Voltaic
RBDA River Basin Development Authority
REA Rural Electrification Agency
RIs Research Institutes
R&D Research and Development
REMP Renewable Energy Master Plan
RET Renewable Energy Technology
RMRDC Raw Materials Research and Development Council
RS Reference scenario
SASSs State Assemblies
SERC Sokoto Energy Research Centre
SGs State Governments
SHESTCO Sheda Science & Technology Complex
SHP Small Hydro Power
SHS Solar Home Systems
SMEDAN Small and Medium Enterprises Development Agency of Nigeria
SON Standard Organization of Nigeria
TIs Tertiary Institutions
TJ Terajoule
Toe Tons of oil equivalent
TPES Total primary energy supply (demand)
TW Trillion Watt
TWh Trillion Watt Hour (Tera –1012)
UEMOA Economic and Monetary Union of West Africa
UN United Nations
UNCDF United Nations Capital Development Fund
UNDP United Nations Development Program
UNESCO United Nation Educational Scientific and Cultural Organization
UNIDO United Nations Industrial Development Organization
vii
Executive Summary
The first draft of the Renewable Energy Master Plan (REMP) was produced in 2005
under the sponsorship of the United Nations Development Programme (UNDP). It has
since created greater awareness on the benefits of renewable energy and its technologies.
Greater contribution of renewable energy into the nation’s energy supply mix for
sustainable socio-economic development has since began to be achieved at both federal
and state levels.
However, seven years down the line, new policy guidelines and developments have taken
place both locally and internationally. Secondly, the first edition was voluminous and
needed to be concise and precise. This 2nd draft edition has therefore concentrated on
concisely bringing out the renewable energy programmes of biomass, solar energy,
hydropower, wind, emerging technologies and framework programmes with targets and
timelines in the short (2013-2015), medium (2016-2020) and long term (2021-2030). The
framework programme presented as action plan has articulated activities that are common
to the other programmes and ensures that the activities are mutually supportive.
Economic and financial incentives required to specifically reduce the initially high
investment cost of renewables and generally enhance penetration into the nation’s energy
supply mix are proffered.
Finally, a risk analysis of factors that may stifle the activities in the action plan for
attainment of the set targets are also provided. On the long term, renewable electricity is
expected to contribute about 20% to the total electricity supply in the country; while the
national fuel supply is to be supported by 10% - 20% renewable fuels (biofuels).
Dependence on fuelwood as a source of fuel for cooking and heating is to decline over
the years.
viii
1.0 INTRODUCTION
1.1 Introduction
Renewable energy is energy derived from a source that regenerates itself within a
relatively short time through natural process. This document is the revised version of the
1st draft Edition of the Renewable Energy Master Plan (REMP). In 2005, the United
Nations Development Programme (UNDP) supported the Energy Commission of Nigeria
(ECN) to produce the Renewable Energy Master Plan (REMP) for Nigeria to remove
common barriers to renewable energy development in Nigeria. Greater awareness on the
benefits of renewable energy and its technologies has since been created. To this effect,
greater contribution of renewable energy into the nation’s energy supply mix for
sustainable socio-economic development has been achieved.
However, seven years after the 1st draft Edition of the Renewable Energy Master Plan
was produced, many developments have taken place within Nigeria and even globally.
Secondly, the 1st Edition was voluminous and needed to be appropriately trimmed and
made precise.
1.2 Energy Resources, Energy Supply and the Economy

Nigeria is endowed with abundant fossil, nuclear and renewable energy resources. The
fossil type include crude oil, natural gas, tar sands and coal; while the renewable energy
resources include large hydro, small hydro, solar, biomass (fuelwood, animal wastes,
agric residues, energy crops) and wind. Others are tidal and ocean waves as well as
geothermal. Tables 1 and 2 show the potentials of these resources, while Table 3 shows
quantitatively energy supply and the Nigerian economy between 2003 and 2010.
Table 1: Fossil Energy Resources and Nuclear Energy Sources

S/N Resource Reserves Production (2010) Domestic Utilization
(2010)
1. Crude Oil 37 billion barrels 0.896 billion barrels 0.164 billion barrels
2. Natural Gas 187 Tscf 2.392 Tscf 75.7% - Fuel,
Industries, re-injection
and gas lift.
24.3% - gas flare
3. Coal 2.7 billion tonnes 0 Negligible
4. Tar Sands 31 billion barrels of 0 0.224 million tonnes
oil equivalent
5. Nuclear Yet to be quantified 0 30kW experimental
nuclear reactor
Source: NNPC (2010), CBN (2010)
1
Table 2: Renewable Energy (RE) Potentials
Resource Potential Remark
Large Hydropower 11,250 MW 1900 MW exploited
Small Hydropower 3,500 MW 64.2 MW exploited
Solar 4.0 kWh/m2/day - 6.5 15 MW dispersed solar PV installations.
kWh/m2/day (estimated)
Wind 2-4m/s @ 10m height Electronic Wind Information System
mainland (WIS) available; 10 MW wind farm in
Katsina in progress.
Biomass (non-fossil -Municipal waste - 18.5 million tonnes produced in 2005
organic matter) -Fuelwood and now estimated at 0.5kg/capita/day
- 43.4 million tones/yr fuelwood
consumption
Animal Waste 245 million assorted animals in 2001
-Agric Residue -91.4 million tonnes /yr produced
-Energy crops -28.2 million hectares of arable land;
8.5% cultivated
Source: REMP (2005) and FMEnv.
Table 3: Energy Supply and the Nigerian Economy

S/N Items 2003 2004 2005 2006 2007 2008 2009
1. Electricity 22.03 23.9 24.22 23.8 23.3 21.27 20.8
Generation (503)* (562)*
(billion kWh) (10,695)** (18,603)**
2. Energy 151.3 125.5 132.6 87.1 81.4 80.8 83.1
Consumption (680)* (670)*
per capita (1,780)** (18,603)**
(Kgoe/Capita)
3. Electricity 174.6 176.4 181.4 167.6 161.2 142.9 135.2
Consumption (563)* (571)*
per capita (2,596)** (2,782)**
(kWh/Capita)
4. GDP per 620.7 658.0 826.3 1030.3 1223.5 1,286.3 1,106.8
capita (2,314)* (2,540)*
(US$/Capita) (8,492)** (9,550)**
5. Energy 0.244 0.191 0.161 0.085 0.067 0.063 0.075
Intensity (0.294)* (0.264)*
(Kgoe/US$) (0.210)** (0.192)**
6. GDP Growth 9.6 6.6 6.5 6.0 6.5 6.0 6.7
Rate (%)
Source: CBN (2005 - 2010), NCC Osogbo (2009),
*Africa Average – IEA (2007, 2010),
**World Average – IEA (2007, 2010)
2
1.3 Drivers of Renewable Energy Development in Nigeria
Interest in the use of alternative energy in the form of renewable energy has increased
substantially because of its potential to long term sustainable energy supply for the
economy, since petroleum may not last beyond 80 years at the 2010 rate of production
and reserves. There are also substantial environmental benefits in reduced GHG
emissions as compared with conventional energy sources. Renewable energy has great
potentials for job and employment creation.
1.4 Objectives of the Renewable Energy Master Plan

The specific objectives of the Renewable Energy Master Plan are to:
• Enhance national energy security;
• Expand access to energy especially in the rural areas;
• Stimulate employment, economic empowerment and growth and reduce poverty;
• Increase the scope and quality of rural services, including, schools, health
services, water supply, information, entertainment and stemming the migration to
urban areas;
• Reduce environmental degradation and health risks, particularly to vulnerable
groups such as women and children;
• Improve learning, capacity-building, research and development on various
renewable energy technologies in the country; and
1.5 Overview of the 1st Edition of the REMP

Contents and Structure
The first version of the Renewable Energy Master Plan (REMP) is a 235 – page booklet,
broadly divided into three sections – Executive Summary, Main Body and Annexes. The
main body consists of six chapters, 52 tables and 13 figures. It has several annexes and
references.
1.5.1 Chapter 1: The first chapter is the introduction, which highlights the rationale for,
vision and objectives of REMP, under the following sub-headings: the Energy Situation
in Nigeria; Development and Energy Challenges; Drivers for change; Rationale for the
REMP; Nigeria’s Renewable Energy Vision; Objectives of the REMP; and Expected
Outputs.
1.5.2 Chapter 2: The second chapter focused on the Renewable Energy Resources,
Technologies and Markets. This Chapter considered each renewable energy resource in
this order: Hydro power, Solar, Biomass, Wind, Hydrogen Cell, Marine, Ocean and
Geothermal Energy. For each renewable energy source, the chapter considered the
resource base, status of data availability including its adequacy and gaps. Also, overview
of the various technologies in each renewable energy type was extensively discussed. The
market situation and the comparative international experiences were discussed in details,
as well as the gaps and barriers to the development of each renewable energy technology
market.
3
1.5.3 Chapter 3: Targets
Targets are critical tools in achieving the vision of the REMP. Since the major areas for
the utilization of renewable energy are electricity, automotive fuel production and other
thermal or heat production (cooking, heating, drying, etc.), targets were set for RE in the
short (2005 – 2007), medium (2008 – 2015) and long (2016 – 2025) terms, guided by the
energy demand and supply projections for the nation, produced by the Energy
Commission of Nigeria, under various economic growth rates or scenarios from the
reference or base.
1.5.4 Chapter 4: Planned Activities and Milestones

To ensure that the REMP targets outlined in chapter 3 were achieved, concrete activities
and milestones were identified in the short, medium and long term. These activities and
milestones were organized under specific sub-sectoral programmes: Framework
Programme on Renewable Energy Promotion, National Biomass Energy Programme,
National Solar Energy Programme, National Small Hydro Energy Programme, National
Wind Energy Programme and Emerging Energy Research and Development Programme.
The action plan was presented in tabular form featuring: Activity Area, Project,
Description of activities, Year and Estimated cost and participating agencies. These
activities are grouped into the short-term (2006 – 2007), Medium term (2008 – 2015) and
Long-term (2016- 2025).
1.5.5 Chapter 5: Strategy and Implementation Issues

Key strategic implementation issues discussed in this chapter included Policy, Legal and
Regulatory Framework; Institutional Framework; Economics and Financing; Capacity
Building; Public Awareness; Inter-Agency Collaboration (including public-private
partnership); Research and Development and Monitoring and Evaluation.
1.5.6 Chapter 6: Risk Identification and Analysis

This section discussed potential risk factors that may hinder the implementation of the
REMP, which included Policy and Political risks; Market risks, Standards and Quality
Control risks; Research and Development risks; and Environmental risks.
It is stressed that the identification and analysis of these risks will allow stakeholders in
the renewable energy economy to factor in these risks, or seek alternative approaches to
reaching national renewable energy targets and objectives.
1.6 Overview of Renewable Energy and Related Policies and Regulations in Nigeria
The main constraints in the rapid development and diffusion of technologies for the
exploitation and utilization of renewable energy resources in the country are the absence
of market and the lack of appropriate policy, regulatory and institutional framework to
stimulate demand and attract investors. The comparative low quality of the systems
developed and the high initial upfront cost also constitute barriers to the development of
markets. Therefore, to unleash the enormous potential of its renewable energy resources
4
on its drive to achieve the MDG’s and NEEDS targets, the Federal Government of
Nigeria has formulated many renewable energy related policies, namely:
• National Energy Policy, which contians renewable energy, initiated by the Energy
Commission of Nigeria and approved by the Federal Government in 2003.
• Draft Renewable Energy Electricity Policy initiated by the Federal Ministry of
Power in 2006.
• Nigerian Biofuels Policy Incentives initiated by the NNPC and approved by FEC
in 2007.
• Vision 20-2020 Document initiated by National Planning Commission and
approved by FEC in 2012.
• National Climate Change Policy initiated by the Federal Ministry of Environment
and approved by FEC in 2011.
• National Environmental Regulations (2009, 2011) initiated by the National
Environmental Standards and Regulations Enforcement Agency (NESREA)
• Electric Power Sector Reform (EPSR) Act of 2005, which libelarized the
electricity sector, unbundled the PHCN in preparation to its privitization, and
established the Nigerian Electricity Regulatory Commission (NERC) as the sector
regulator.
• Regulation on Independent Electricity Distribution Networks (IEDN) and
Embedded Generation initiated by NERC.
• Feed- In- Tariff for electricity from renewable energy sources initiated by NERC.
5
2.0 RENEWABLE ENERGY PROGRAMMES AND TARGETS
2.1 Renewable Energy Programmes
The Renewable Energy Master Plan (REMP) is basically structured into the following
programmes with short (2013–2015), medium (2016–2020) and long term (2021–2030).
The programme under the Master Plan includes:
 National Biomass Energy Programme
 National Solar Energy Programme
 National Hydropower Programme
 National Wind Energy Programme
 Emerging Energy Programme
 Framework Programme for Renewable Energy Promotion
The Framework programme articulates issues that are common to all other sub-sectoral
programmes and ensures that activities within the sub-sectors are mutually supportive,
e.g,
 Legal, Regulatory and Institutional framework
 Incentives (Financial and Fiscal)
 Capacity Building (Human and Infrastructural)
 Inter-Agency/Governmental Collaboration
 Research and Development
 Monitoring and Evaluation
 RE Portfolios and Feed-in-Tariff
2.2 Energy Demand and Supply Projections for Nigeria

Nigeria has envisioned growing its economy at a rate of 11% - 13% so that it can be
reckoned within the 20 largest economies in the world by 2020. Energy demand and
supply studies conducted by the Energy Commission of Nigeria under various growth
scenarios and taking into consideration the economic vision, demography, available
energy resources and modern developmental path, using MAED and MESSAGE energy
planning models of IAEA, has indicated that huge amount of energy in the form of
electricity, fuel and heat would be required to meet this vision.
The following growth scenarios were considered:

 Reference Growth Scenario:
• GDP grows by an average of 7% per annum
• The main driver of growth is the manufacturing sector
• Manufacturing accounts for 15% of GDP by 2020 from 4% in 2011
• Consistent with the MDG objective of reducing poverty by half by 2015
 High Growth Scenario:
• Manufacturing contributes 22% to GDP by 2030 from 4% in 2011
• Nigeria is transiting from an agrarian economy to an industrializing nation
6
 Optimistic Growth Scenario:
• Manufacturing contributes 22% to GDP by 2030 from 4% in 2011
• Nigeria is transiting from an agrarian economy to an industrializing nation
Table 4: Projected Access to Grid Electricity by Household for Nigeria

Scenario 2010 2015 2020 2025 2030
Reference growth (7%) 60 75 80 85 90
High growth (10%) 72 86 93 94 95
Optimistic growth (13%) 72 86 93 94 95
Table 5: Electricity Demand Projections per Scenario, MW

Scenario 2009 2010 2015 2020 2025 2030 2035 2040
Reference growth (7%) 4,052 7,440 24,380 45,490 79,798 115,674 161,651 213,122
High growth (10%) 4,052 8,420 30,236 63,363 103,859 196,875 333,444 487,510
Optimistic growth (13%) 4,052 10,230 41,133 88,282 170,901 315,113 573,289 979,326
Table 6: Projected Total Energy Demand for Fuel Petroleum Products for Nigeria
(Million Litres)
Year PMS DPK AGO Fuel Oil LPG
7% 13% 7% 13% 7% 13% 7% 13% 7% 13%
2009 5096.94 5096.94 356.06 356.06 565.64 565.64 120.01 120.01 74.16 74.16
2010 6180.00 8890.00 464.00 902.00 791.68 1177.85 160.00 270.00 93.20 132.90
2015 14460.00 19510.00 3788.00 7039.00 2301.86 3651.10 1800.00 3380.00 1107.00 1871.20
2020 28170.37 35587.13 9038.71 22704.49 4176.76 6270.84 4632.07 9277.93 2862.50 5733.51
2025 39769.44 55459.38 15984.94 44285.43 6231.84 11408.42 7806.10 20797.42 4823.96 12852.25
2030 56457.15 88369.15 22064.93 77255.68 8902.43 21349.73 11374.64 45443.40 7029.22 22903.70
Table 7: Projected Electricity Supply by Fuel Type Based on 13% Economic

Growth Rate (MW)
2009 (Based Yr) 2010 2015 2020 2025 2030
Coal 0.00 3352.98 3352.98 12,121.79 14,011.27 20398.63
Electricity Import 0.00 0 0 0 0 67727
Gas 3803.00 13109.77 26426.06 49,996.47 120,512.45 164,306.85
Hydro 1930.00 4157 11207.00 12132 12132 12132
Nuclear 0.00 0.00 3599.99 7199.99 7199.99 7199.99
Small Hydro 20.00 105 319.9 759.85 1660.05 3502.1
Solar 0.00 490.35 2543.30 6417.27 15969.94 39737.5
Wind 0.00 23 36 41 47 54
Biomass 0 0 5 30 65 100
Supply 5746.00 21,238.09 47,490.24 88,698.37 171,597.69 315,158.07
7
2. 3 Renewable Energy Targets/Milestones and Timelines
The renewable energy programmes’ activities with Targets/Milestones and Timelines are
as follows:
Table 8: Biomass Programme Targets
S/ Activity/Item Timeline/Quantity
N Short Term Medium Term Long Term
1 Biomass Electricity (MW) 5 30 100
2 Improved Woodstoves (No.) 300,000 500,000 1,000,000
3 Biogas Digesters (No.) 500 6,000 8,000
4 Biomass Briquetting Machine (No.) 30 50 80
5 Biofuel (ML/day)*
- Bio ethanol (B10) 5.3 9.7 24.2
- Biodiesel (B20) 2.0 3.4 11.7
* Based on 13% Growth rate Supply Projections of PMS and AGO.
Table 9: Solar Programme Targets

(i) Electricity
S/N Activity/Item Timeline/Quantity
Short Term Medium Term Long Term
1 Solar PV Home Systems (SHS) 5 10 15
(MW)
2 Solar PV Water Pumping (MW) 50 1,000 5,000
3 Solar PV Community Services 45 500 3,000
(MW)
4 Solar PV Refrigerators (MW) 20 500 2,000
5 Solar PV Street and Traffic Lighting 100 1,000 10,000
(MW)
6 Solar PV Large Scale PV plants 80 990 9,990
(1MW capacity)
7 Solar Thermal Electricity 300 2,136 18,127
(1MW capacity)
Total (MW) 600 6,136 48,132
(ii) Thermal
1 Solar Water Heaters (No.) 4,000 60,000 150,000
2 Solar Cookers (No.) 2,000 50,000 150,000
3 Solar Dryers (No.) 150 2,000 6,000
4 Solar Stills (No.) 100 3,000 2,000
5 Solar Pasteurizers (No.) 300 4,000 10,000
8
Table 10: Hydropower Programme Targets
1 Large Hydropower (MW) 4,000 9,000 11,250
2 Small Hydropower (MW) 100 760 3,500
Total (MW) 4,100 9,760 14,750
Table 11: Wind Programme Targets

1 Wind Electricity (MW) 23 40 50
2 Windmill Water Pumping Systems 20 100 200
(No.)
Table 12: Summary of Renewable Energy Targets

(i) Renewable Electricity Supply Projection in MW (13% GDP Growth Rate) 1
S/N Resource Now Short Term Medium Term Long Term
1 Hydro (LHP) 1938 4,000 9,000 11,250
2 Hydro (SHP) 60.18 100 760 3,500
3 Solar PV 15.0 300 4,000 30,005
4 Solar Thermal - 300 2,136 18,127
5 Biomass - 5 30 100
6 Wind 10.0 23 40 50
All Renewables 1985.18 4,628 15,966 63,032
All Energy Resources 8,700 47,490 88,698 315,158
(installed
capacity
2012)
% of Renewables 23% 10% 18% 20%
% RE Less LHP 0.8% 1.3% 8% 16%
*From Supply Projections based on 13% GDP growth
1
CBN, NPC
Short Term: 2013 – 2015; Medium Term: 2016 – 2020; Long Term: 2021 - 2030
9
(ii) Non-Electricity (Thermal)
Activity/Item Timeline/Quantity
Total thermal Energy 193,709 202,128 248,809
Production (GWh)
Renewable Energy Share (%) 85 80* 79*
Other non-renewable Share 15 20 21
(%)
* Note that the decline over the years is due to the planned decrease in the consumption of fuelwood
(iii) Fuels (bio fuels) Targets*

Item Timeline/Quantity
Bio Ethanol (E10) 1935 3541 8833
Biodiesel (B20) 730 1251 4271
* Based on 13% GDP growth
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3.0 THE RENEWABLE ENERGY ACTION PLAN (REAP)
3.1 Introduction
To ensure that the REMP targets outlined are achieved, concrete supportive activities are
identified in the short, medium and long term. These activities are organized under the
framework programme that makes it supportive to all other programmes.
• Assessment of Resource Base/Data Acquisition
• Renewable Energy Policies, Regulatory and Institutional Frameworks
• Capacity Building and Skill Development Programme
• Public Awareness/Sensitization
• Development of Financing Options Program
• Development of Renewable Projects
• Incentives for Renewable Energy Development
• Research and Development
• Standards, Codes of Practice & Specifications
• Local Manufacturing and Commercialization
The action plan is presented in tabular form featuring: Targeted Outcome, Activity Area,
Responsible agencies, Proposed Funding Sources and Time line broken into Short,
Medium and Long-term. These activities are grouped into the short-term (2012– 2015),
Medium term (2016 – 2020) and Long-term (2021- 2030).
3.2 Component – 1: Assessment of Resource Base/Data Acquisition

The assessment of renewable energy resource is essential for the appropriate design and
successful operation of any renewable energy system.
Table 13: Assessment of Resource Base/Data Acquisition

Targeted Activities Responsible Proposed Timeline
Outcome Funding Short Medium Long
Sources Term Term Term
Databases for Conduct comprehensive NIMET, ECN, FGN(ECN), * * *
each renewable survey of biomass NBS, FMoP, OPS, DPs
energy resource energy resources by FMA&RD,
established State, type, utilization, FMEnv,
potential and uses. FMWR
Conduct National Solar NIMET, NBS, FGN(ECN), * * *
Radiation Database and ECN, FMoP OPS, DPs
Mapping
Conduct comprehensive NIMET, NBS, FGN(ECN), * * *
mapping and National FMST, RCs, OPS, DPs
Survey and Inventory of RIs, TIs, OPS,
all SHP sites by State, DPs
River Basins and Local
Government
11
Establish Renewable FMAv, NIMET, FGN(ECN), * * *
Energy Databank at FMST, RCs, OPS, DPs
Federal and State Levels RIs, TIs, OPS,
DPs
Review and Update the FMAv, NIMET, FGN(ECN), * * *
existing Wind Resource FMST, RCs, OPS, DPs
Map - National Wind RIs, TIs, OPS,
Energy Information DPs, FMoP
System (Wind Map)
Collect, collate and FMAv, NIMET, FGN(ECN), * * *
analyze data from FMST, RCs, OPS, DPs
existing meteorological RIs, TIs, OPS,
stations DPs,
FMA&RD,
FMWR, RBDA
Establish more FMAv, NIMET, FGN(ECN), * * *
meteorological stations FMST, RCs, OPS, DPs
RIs, TIs, OPS,
DPs
Assess potentials of new FMAv, NIMET, FGN(ECN), * * *
and emerging RE FMST, RCs, OPS, DPs,
resources- hydrogen, RIs, TIs, OPS, NNPC
ocean tides and DPs, FMAv
geothermal in Nigeria
Periodic Review and FMAv, NIMET, FGN(ECN), * *
Update of Databases of FMST, RCs, OPS, DPs
each RE resource RIs, TIs, OPS,
DPs
3.3 Component – 2: Renewable Energy Policies, Regulations and Institutional

Frameworks
Clear policies, regulations and institutional frameworks are essential in the attainment of
renewable energy programmes. The following are thus, articulated in table 3.2.
Table 14: Renewable Energy Policies, Regulations and Institutional Frameworks

RE Policies, Implementation of RE FMST, FMEnv, FGN(ECN), * * *
Regulations and policies, programs and NNRA, OPS, DPs
Institutional regulations to support FMWR, DPR,
Frameworks large-scale renewable MPR, DPs,
established energy development NNPC, OPS,
NERC,
FMW&SD
12
Production of Draft FMST, FMEnv, FGN(ECN), * * *
Legislation for a Solar NNRA, OPS, DPs
Water Heating FMWR, DPR,
Obligation in the MPR, DPs,
residential, commercial NNPC, OPS,
& institutional sectors NERC, NASS
Advocacy to ensure the CBO, NGO, FGN (ECN), * * *
approval NIPC OPS, DPs
Strengthening of FMST, FMEnv, FGN (ECN), * * *
leadership and MPR, FMWR, OPS, DPs
implementation capacity NNRA, NNPC,
at Federal, State and NERC, OPS,
Local governments DPs
levels
Development of MPR, DPR, FGN (ECN), * * *
mechanisms to mobilize NNPC, OPS, OPS, DPs,
investments through DPs, FMF, FMF
financial and fiscal BOI, NIPC
incentives, improve
access to financing
(microfinance) and
provide targeted
subsidies
Streamline and ECN, MPR, FGN (ECN), * * *
harmonize all policies DPR, NNPC, OPS, DPs
on renewable energy for OPS, DPs
a unified target setting
Enhance coordination of FMST, FMEnv, FGN(ECN), * * *
institutions involved in NNRA, OPS, DPs
the development of FMWR, DPR,
renewable energy, and MPR, DPs,
clearly define the roles NNPC, OPS,
of each institution and NERC
stakeholder.
Pre-determine Feed – In NERC NERC * * *
Tariffs for Renewable
energy
Conduct the assessment NERC, FMoP FGN(ECN), * * *
of Standard PPAs and OPS, DPs
Set up a standard PPAs
(Power Purchase
Agreements) for
electricity from
renewables, as well as
other incentives
13
Compile directory of all ECN FGN (ECN) * * *
policy instruments on
renewable energy in
Nigeria
Support existing nation- FMST, ECN, FGN(ECN), * * *
wide and sub-regional FMEnv, OPS, SON
networks designed to NNRA,
promote the exchange of FMWR, DPR,
policy experiences, MPR, DPs,
model policy case NNPC, OPS,
examples and lessons NERC
learned in renewables
development
Quality assurance and FMST, FMEnv, FGN(ECN), * * *
standards for the FMWR, DPR, OPS, DPs
renewables sub-sector MPR, DPs,
NNPC, OPS,
NERC, SON
Periodic Review of the FMST, FMEnv, FGN(ECN), * * *
Renewable Energy FMWR, DPR, OPS, DPs
Master Plan MPR, DPs,
NNPC, OPS,
NERC
Institutional Amend ECN law to FMST, FMEnv, FGN(ECN), * * *
Framework make ECN National FMW&SD, OPS, DPs
established focal point for FMWR, DPR,
Renewable Energy and MPR, DPs,
Energy Efficiency NNPC, OPS,
NGO, NERC,
NASS
Strengthen existing FMST, ECN, FGN(ECN), * * *
Associations MPR, DPs,
NNPC, OPS,
NERC
Promote the FMST, FMEnv, FGN(ECN), * * *
establishment of more FMWR, DPR, OPS, DPs
Renewable Energy MPR, DPs,
Specific professional NNPC, OPS,
and industry NERC
associations
14
Coordinate the FMST, NIPC, FGN(ECN), * * *
Related activities in MPR, DPs,
various Agencies, NNPC, OPS,
Ministries and NERC
departments
Encourage other Federal FMST, FMEnv, FGN(ECN), * * *
and State institutions to FMWR, DPR, OPS, DPs
mainstream renewable MPR, DPs,
energy development into NNPC, OPS,
their development NERC, NPC
efforts – like Ministries
of Works, Water
Resources, Agriculture,
etc…
Establishment of FMST, FMEnv, FGN(ECN), *
Renewable Energy NNRA, OPS, DPs,
Development Agency FMWR, DPR, NGOs
(REDA) MPR, DPs,
NNPC, OPS,
NERC, NGOs
3.4 Component – 3: Capacity Building and Skills Development Program

Relevant and adequate human capacity and skills are essential for implementation of
renewable energy programmes. Thus, the following are articulated:
Table 15: Capacity Building and Skills Development Program

Training Organise Training and NNPC, ECN, FGN, OPS, * * *
Workshops Re-training Workshops NBS, FMEd., DPs, NNPC,
organized on all renewable energy OPS, PTDF, PTDF
types for Engineers DPs, NBTE,
FMST,
RMRDC,
MAN,
NAPTIN,
NGOs
15
Organise Training and NNPC, ECN, FGN, OPS, * * *
Re-training Workshops NBS, FMEd., DPs, NNPC,
on all renewable energy OPS, PTDF, PTDF
types for Technicians DPs, NBTE,
and Craftsmen FMST,
RMRDC,
MAN,
NAPTIN,
NGOs
on all renewable energy OPS, PTDF, PTDF
types for relevant DPs, NBTE,
Ministries, Agencies and FMST,
Departments at Federal, RMRDC,
State and Local MAN,
Governments NAPTIN,
NGOs
Capacity and training to NNPC, ECN, FGN, OPS, * * *
improve skills necessary NBS, FMEd., DPs, NNPC,
for OPS, PTDF, PTDF
local design and DPs, NBTE,
manufacture of FMST,
renewable energy RMRDC,
technologies MAN,
NAPTIN,
NGOs
on the Design, OPS, PTDF, PTDF
Construction and DPs, NBTE,
Installations and FMST,
Maintenance of RMRDC,
renewable energy MAN,
technologies NAPTIN,
NGOs
Renewable Organise On-the-Job NNPC, ECN, FGN, OPS, * * *
Energy Training for NYSC NBS, FMEd., DPs
Mainstreamed OPS, PTDF,
into the DPs, NBTE,
Nation’s FMoP, NGOs,
Education FMST, FMYD,
Curricula NAPEP, NYSC,
NDE, NAPTIN
16
Organise Advanced NNPC, ECN, FGN, OPS, * * *
Training (Overseas and NBS, FMEd., DPs
Local) Courses on OPS, PTDF,
specific renewable DPs, NBTE,
energy type FMoP, NGOs
Organise training on the NNPC, ECN, FGN, OPS, * * *
preparation of pre- NBS, FMEd., DPs
feasibility and OPS, PTDF,
feasibility assessments DPs, NBTE,
on viability of FMoP, NGOs
renewable projects
Short Courses and NNPC, ECN, FGN, OPS, * * *
postgraduate programs NBS, FMEd., DPs
overseas on various OPS, PTDF,
renewable energy DPs, NBTE,
sources FMoP, NGOs
Introduce Renewable NNPC, ECN, FGN, OPS, * * *
Energy into the nation’s NBS, FMEd., DPs
educational Curriculum OPS, PTDF,
DPs, NBTE,
FMoP, NGOs
Developing indigenous NNPC, ECN, FGN, OPS,
human and institutional NBS, FMEd., DPs
capacities in the genetic OPS, PTDF,
manipulation of fast DPs, NBTE,
growing tree species. FMoP, NGOs,
FMST
Conduct periodic NNPC, ECN, FGN, OPS, * * *
national renewable NBS, FMEd., DPs
energy manpower OPS, PTDF,
survey to determine the DPs, NBTE,
actual Re Expert base of FMoP, NGOs,
the country SGs, LGAs
Develop and Implement NNPC, ECN, FGN, OPS, * * *
Specialized Renewable NBS, FMEd., DPs
Energy Curricula into OPS, PTDF,
the nation’s higher DPs, NBTE,
educational system FMoP, NGOs,
FMST, NUC,
NBTE, NCCE
Conduct a Study on the NNPC, ECN, FGN, OPS, * * *
Nigeria’s Renewable NBS, FMEd., DPs
Energy Manpower OPS, PTDF,
Stock and Needs DPs, NBTE
17
Develop Curricula for NNPC, ECN, FGN, OPS, * * *
primary, Secondary and NBS, FMEd., DPs
Tertiary Institutions on OPS, PTDF,
different Renewable DPs, NBTE,
Sources FMoP, NGOs,
FMST, NUC,
NBTE, NCCE
Establishment of NNPC, ECN, FGN, OPS, * * *
Barefoot-College for the NBS, FMEd., DPs
training of local artisans OPS, PTDF,
and end users on the DPs, NBTE,
installation, utilization, FMoP, NGOs,
maintenance and safety FMST, NAPEP,
of renewable energy NDE, FMoD,
technologies NBTE
Establish NNPC, ECN, FGN, OPS, * * *
linkages/collaboration NBS, FMEd., DPs
between tertiary OPS, PTDF,
institutions, research DPs, NBTE,
centres and industries FMoP, NGOs,
BOI, NUC,
NBTE, NCCE
3.5 Component – 4: Public Awareness/Sensitization

Even-though the Energy Commission of Nigeria and many other organizations have been
organizing several workshops and sensitization programmes on renewable energy, many
Nigerians are still ignorance of the benefits of renewable energy and its exploitation. The
following are some of the awareness and sensitization activities and projects that should be
embarked upon to create greater awareness.
Table 16: Public Awareness/Sensitization

Targeted ACTIVITIES Responsible Proposed TIMELINE
RE Awareness Setting up of renewable ECN, NOA, FGN, OPS, * * *
Created among energy awareness NGOs, CBOs, DPs
Nigerians programs (including DPs, OPS,
solar villages in each FMST, FMoP,
state) FMoI, RCs,
Media
Organise regular FMST, FMoI, FGN, OPS, * * *
programs on radio and Media DPs
TV to demonstrate the
role of renewable energy
18
Develop awareness ECN, NOA, FGN, OPS, * * *
creation & public NGOs, CBOs, DPs
enlightenment DPs, OPS,
programmes on different FMoP, FMoI,
renewable energy FMST,
technologies for the NESREA,
print and electronic ERCs, Media
media
renewable energy FMST, FMYD,
technologies for FMWA,
primary, secondary FMoN-D,
schools ERCs, Media
renewable energy FMST, ERCs,
technologies for the Media
Federal, State and
governments assemblies
renewable energy ERCs, Media
technologies for the Fed.
Ministry Officials,
Youth & Women groups
Publications in print ECN, FMoI, FGN, OPS, * * *
media on renewable DPs DPs
energy resources,
development and
technologies
Institute periodic ECN, NOA, FGN, OPS, * * *
international fairs on NGOs, CBOs, DPs
specific renewable DPs, OPS,
energy source FMoP, FMoI,
Judiciary,
NASS, SASSs,
LGAs, ERCs,
Media
19
Organize Awareness ECN, NOA, FGN, OPS, * * *
and Sensitization NGOs, CBOs, DPs
Seminars for Law and DPs, OPS,
Policy makers FMoP, FMoI,
ERCs, Media
Organise Annual ECN, NOA, FGN, OPS, * * *
Renewable Energy NGOs, CBOs, DPs
Week DPs, OPS,
FMoP, FMoI,
Energy
Research
Centres, Media
Organize Community ECN, NOA, FGN, OPS, * * *
based information and NGOs, CBOs, DPs
communications DPs, OPS,
technology FMoP, FMoI,
dissemination training ERCs, Media
for NYSC
Organise Advanced ECN, NOA, FGN, OPS, * * *
Training (Overseas and NGOs, CBOs, DPs, PTDF
Local) Courses on DPs, OPS,
specific renewable FMoP, FMoI,
energy type PTDF, ERCs,
Media
Production of handbills, ECN, NOA, FGN, OPS, * * *
leaflets, postcards, NGOs, CBOs, DPs
calenders, jingles and DPs, OPS,
documentaries on FMoP, FMoI,
renewable energy ICRC, FMST,
technologies Nollywood,
ERCs, Media
Build up partnerships ECN, NOA, FGN, OPS, * * *
between government, NGOs, CBOs, DPs
private sector and civil DPs, OPS,
society for renewable FMoP, FMoI,
energy development. FMT&I, ERCs,
Media
3.6 Component – 5: Development of Financing Options Program

Renewable energy ventures often have high up-front cost, and many projects require
government support in the initial start-up phases. Access to affordable finance is a major
constraint. Traditional banks are often unwilling to finance renewable energy projects due
to market uncertainties and perceived high risks, such as, high initial capital costs on a
per kW basis; higher transaction costs in the case of smaller renewables; uncertainty of
the resource base; limited number of developers with the skills to prepare financing
packages that meet the requirements of financial institutions; price uncertainty in the
20
market for final renewable energy service; and, lack of off-takers for renewable energy
produced. In some cases, there are limited data and information on the renewable energy
industry to guide investors and financiers in making sound judgments and decisions in
renewable energy projects development.
The activities in this component is geared towards increasing availability of information

on renewable energy project investments, and enhancing collaboration between the
various stakeholders, to ensure successful renewable energy project investments.
Financing for RETs can be in the form of assets, venture capital, private equity, loans and
grants, or multiple combinations of these.
The key question that needs to be addressed is: what are the options and strategies for
mobilizing domestic and international capital to finance the investment requirements of
sustaining long term energy and socio-economic development in Nigeria?
In the light of the above question, some measures need to be put in place in addressing
the key issues. For instance, energy projects should be properly chosen, designed and
packaged to be attractive to domestic and foreign investors. Moreover maximum
advantage should be taken of the international funds available for environmentally sound
energy projects.
In Nigeria access to energy finance is affected by:
• Inadequate national support system that guarantees the attraction and security of
investment,
• Inadequate financial capacity for energy investment
• Slow judicial process in settling dispute
• Inadequate strategies for attracting offshore financing
• Political and regulatory risks for investment in energy infrastructure
• Inadequate incentives to business to invest in new technologies
Some of the remedial measures to counter these, especially for the energy sector, have
been enumerated in this REAP such as establishing a tax holiday scheme, Introducing
tariffs that guarantee good rate of return on investment etc. Moreover some of the
identified niche products that could be employed in financing energy projects are Equity
financing mechanism, bond market, financial collaboration between government/private
with bilateral and multilateral institutions etc.
21
Table 17: Development of Financing Options Program
Enabling Assist institutions and REA, FMF, FGN * * *
environment project developers in OPS, DPs, (FMEnv)
for private financial analysis of FMST, ECN,
sector renewables investment MSMD, FMJ
investments NASS, MPR,
for DPR, NNPC
Renewable Producing draft legislation NERC, REA, FGN * * *
Energy for a Fossil Fuel Levy Act FMF, OPS, DPs, (FMEnv)
development to finance Renewable FMST, ECN,
created Energy development MSMD, FMJ
projects in the country NASS, MPR,
DPR, NNPC,
NIPC, BOI
Establish Renewable NERC, REA, FGN * * *
Energy Development Fund FMF, OPS, DPs, (FMEnv)
FMST, ECN,
MSMD, FMJ
NASS, MPR,
DPR, NNPC
Provide fiscal incentives: NERC, REA, FGN * * *
suspension of import FMF, OPS, DPs, (FMEnv)
duties, tax holiday, FMST, ECN,
investment grants, MSMD, FMJ
operational grants, etc.. NASS, MPR,
DPR, NNPC,
NIPC
Partner with financial NERC, REA, FGN * * *
institutions to develop FMF, OPS, DPs, (FMEnv)
financing FMST, ECN,
options for renewables MSMD, FMJ
NASS, MPR,
DPR, NNPC,
BOI
Develop a portfolio of NERC, REA, FGN (FMF) * * *
renewable investment FMF, OPS, DPs,
projects which can be FMST, ECN,
developed as pilot projects MSMD, FMJ
NASS, MPR,
DPR, NNPC
22
Support training on NERC, REA, FGN (FMF) * * *
renewables project FMF, OPS, DPs,
development targeted at FMST, ECN,
accessing carbon finance MSMD, FMJ
NASS, MPR,
DPR, NNPC
Develop pipeline of NERC, REA, FGN (FMF) * * *
projects that can access FMF, OPS, DPs,
carbon financing FMST, ECN,
MSMD, FMJ
NASS, MPR,
DPR, NNPC
Introducing tariffs that NERC, REA, FGN (FMF) * * *
guarantee good rate of FMF, OPS, DPs,
return on investment (E.G, FMST, ECN,
Feed- In – Tariff, etc..) MSMD, FMJ
NASS, MPR,
DPR, NNPC
Instituting a scheme for NERC, REA, FGN (FMF)
accelerated depreciation of FMF, OPS, DPs,
equipment in respect of FMST, ECN,
(foreign) loans invested in MSMD, FMJ
energy projects. NASS, MPR,
DPR, NNPC
Establishing special risk NERC, REA, FGN (FMF) * * *
fund scheme for FMF, OPS, DPs,
commercialization of new FMST, ECN,
and emerging energy MSMD, FMJ
technologies such as RET NASS, MPR,
DPR, NNPC
Attracting long-term NERC, REA, FGN (FMF)
financing from FMF, OPS, DPs,
international institutions FMST, ECN,
MSMD, FMJ
NASS, MPR,
DPR, NNPC
Providing adequate NERC, REA, FGN (FMF)
security for energy FMF, OPS, DPs,
infrastructural facilities FMST, ECN,
MSMD, FMJ
NASS, MPR,
DPR, NNPC
23
Ensuring the provision of NERC, REA, FGN (FMF)
basic physical FMF, OPS, DPs,
infrastructural facilities to FMST, ECN,
enterprises involved in the MSMD, FMJ
development of the energy NASS, MPR,
sector. DPR, NNPC
Introducing environmental NERC, REA, FGN (FMF)
regulations that encourage FMF, OPS, DPs,
investment in FMST, ECN,
environmental friendly MSMD, FMJ
technologies NASS, MPR,
DPR, NNPC,
NESREA
Feed-In-Tariff
(i) Large Hydro Plant
2012 2013 2014 2015 2016
Wholesale contract prices
4,898 5,290 5,715 6,174 6,671
(N/MWh)
(ii) Small Hydropower (SHP)

2012 2013 2014 2015 2016
23,561 25,433 27,456 29,643 32,006
(N/MWh)
(iii) On-Shore Wind Plant

2012 2013 2014 2015 2016
24,543 26,512 28,641 30,943 33,433
(N/MWh)
(iv) Solar Power Plant

2012 2013 2014 2015 2016
67,917 73,300 79,116 85,401 92,192
(N/MWh)
(v) Biomass Power Plant

2012 2013 2014 2015 2016
27,426 29,623 32,000 34,572 37,357
(N/MWh)
Source: NERC (2012): Multi-Year Tariff Order, 1st June 2012 – 31st May 2017
24
3.7 Component – 6: Development of RE Projects
Nigeria is well endowed with a wide range of renewable energy resources, including
hydro-electricity, biomass, solar, wind, and other renewables, most of which are currently
under-exploited. Based on experience from various initiatives that have been undertaken
to date, the use of these renewable energy resources could contribute significantly to the
development of the energy sector in many African countries.
If successfully exploited, renewables can significantly contribute to addressing two key

challenges facing the energy sector in Nigeria: Energy Access: Increasing access to
modern energy for the wider majority in pursuit of poverty reduction, MDGs, and
more equitable socio-economic development; Energy Security: Responding to the
increased burden of the high cost of fossil fuels compounded by power shortages
triggered by lower investment flows to the power sector and drought.
Renewables can contribute to poverty alleviation and assist in addressing the Millennium
Development Goals (MDGs), by providing modern improved energy services to the poor.
Renewables are particularly suited to meet the decentralized energy needs of poor rural
remote community institutions such as hospitals, dispensaries, schools, and farmer
training centers. This is particularly true of small-scale renewables that are made locally
and run on locally available resources. Such systems can provide energy that is both
affordable and a source of employment and enterprise creation for both the rural and
urban poor. Examples of such renewables include:
• Low cost more efficient biomass-based combustion technologies (e.g., improved
cook stoves, efficient charcoal kilns, brick making kilns, fish smokers, tea dryers,
and wood dryers);
• Pico and micro hydro for shaft power for processing agricultural produce and
increasing its value, as well as for pumping water;
• Low cost efficient hand tools and animal drawn implements, to increase the
agricultural productivity of rural areas;
• Treadle, wind, and ram pumps for irrigation to increase agricultural outputs and
generate income for the farmer;
• Solar dryers that lower post-harvest losses enabling farmers to market their
produce when prices are higher;
• Solar water purifiers to provide clean potable water and reduce water borne
diseases, which translates to increased availability of labor and thus increases
agricultural output and income.
Renewables offer diversification in energy generation and therefore can play a vital role
in increasing energy security by minimizing risks related to high and unstable oil prices.
Some renewables are not reliant on rainfall (e.g., geothermal, solar, wind) thereby
reducing climate variability related risks.
In fact, it could be argued that in view of the continued and serious lack of access to
energy in Nigeria and the increased energy security challenges, policy makers in the
country now fully recognize the need to develop renewable energy as a matter of priority.
25
The widespread deployment of renewables in the region has also been constrained by
other factors that include: poor institutional frameworks and infrastructure; inadequate
planning; the lack of coordination and linkage in national renewables programs; pricing
distortions that place renewable energy at a disadvantage; high initial capital costs; weak
dissemination strategies; lack of skilled manpower; poor baseline information; and low
maintenance capacity. Therefore, meaningful scaling up of the use of renewable energy
resources can only be realized if these barriers are overcome through specific projects
and programmes as outlined as follows:
Table 18: Development of RE Projects

Biomass Identifying the fast ECN, NGOs, FGN, OPS, * * *
Projects growing indigenous FMA&WR, DPs, NNPC,
established trees species. FMEnv.,SGs, PTDF
LGAs, OPS,
DPs, FMST,
FIRN
Identifying & sourcing NNPC, ECN, FGN, OPS, * * *
foreign fast growing tree NGOs, DPs
species FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
Creating nurseries and ECN, NGOs, FGN, OPS, * * *
intensifying the FMA&WR, DPs
cultivation of plantation FMEnv.,SGs,
of fast growing trees LGAs, OPS, DPs
Establishing more NNPC, ECN, FGN, OPS, * * *
shelter belts in the semi- NGOs, DPs
arid zones FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
Establishment of Small- NNPC, ECN, FGN, OPS, * * *
Scale Industries for the NGOs, DPs
design and production of FMA&WR,
improved woodstoves FMEnv.,SGs,
LGAs, OPS,
DPs, SMEDAN,
FMST, RMRDC,
NDE, NARICT
NCAM
26
Construction of NNPC, ECN, FGN, OPS, * * *
biodigester plants NGOs, DPs
FMA&WR,
FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST, FMT&I,
RMRDC, NDE,
NARICT,
NCAM
Establishment of bio- NNPC, ECN, FGN, OPS, * * *
fuels plants NGOs, DPs
FMA&WR,
FMEnv.,SGs,
LGAs, OPS,
DPs, FMT&I
Establishment of energy NNPC, ECN, FGN, OPS, * * *
farms NGOs, DPs
FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
Manufacture and NNPC, ECN, FGN, OPS, * * *
dissemination of NGOs, DPs
improved woodstoves FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
briquetting plants for NGOs, DPs
fine particle of biomass FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
Blending of up Develop local capacity NNPC, ECN, FGN, OPS, * * *
to 10% of fuel for large scale NGOs, DPs
ethanol with production of biofuels FMA&WR,
gasoline (E-10) feedstock FMEnv.,SGs,
LGAs, OPS, DPs
plantations of energy NGOs, DPs
crops and biofuels FMA&WR,
plants FMEnv.,SGs,
LGAs, OPS, DPs
27
Creating Market NNPC, ECN, FGN, OPS, * * *
Demand for Biofuels NGOs, DPs
FMA&WR,
FMEnv.,SGs,
LGAs, OPS,
DPs, FMF, DPR,
NIPC, FMT&I
Registration of Biofuels NNPC, ECN, FGN, OPS,
Plants NGOs, DPs
FMA&WR,
FMEnv.,SGs,
LGAs, OPS,
DPs, FMF, DPR,
NIPC, FMT&I
Provide fiscal and NNPC, ECN, FGN, OPS, * * *
economic incentives: NGOs, DPs
Tax holiday, waiving FMA&WR,
VAT, etc… FMEnv.,SGs,
LGAs, OPS,
DPs, FMF, DPR,
NIPC, FMT&I
Development of the NNPC, ECN, FGN, OPS, * * *
Biofuels Industry Equity NGOs, DPs
Fund FMA&WR,
FMEnv.,SGs,
LGAs, OPS,
DPs, FMF, BOI,
FMT&I
Solar Energy Construction of Solar ECN, NGOs, FGN, OPS, * * *
Projects Projects in the FMEnv., SGs, DPs
residential, commercial LGAs, OPS,
and industrial setors DPs, FMST,
FMT&I,
RMRDC,
NARICT
Construction of Solar ECN, NGOs, FGN, OPS, * * *
Thermal Projects in the FMEnv., SGs, DPs
residential, commercial LGAs, OPS,
and industrial setors DPs, FMST,
FMT&I,
RMRDC,
NARICT
Develop and site ECN, NGOs, FGN, OPS, * * *
appropriate solar FMEnv., SGs, DPs
schemes LGAs, OPS, DPs
28
Installation of Solar ECN, NGOs, FGN, OPS, * * *
Home Systems FMA&WR, DPs
FMEnv., SGs,
LGAs, OPS,
DPs, FMH&UD
Water Pumping FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST
Street and traffic FMEnv., SGs, DPs
Lightings LGAs, OPS,
DPs, FMH&UD
Construction of Large- ECN, NGOs, FGN, OPS, * * *
Scale Solar PV plants FMEnv.,SGs, DPs
LGAs, OPS,
DPs, FMoP,
FMST
projects for community FMA&WR, DPs
services FMEnv.,SGs,
LGAs, OPS, DPs
Collectors FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS, DPs
Cookers FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS, DPs
Dryers, Chicken FMA&WR, DPs
Brooders, etc… FMEnv.,SGs,
LGAs, OPS, DPs
desalination, solar stills, FMA&WR, DPs
etc.. FMEnv.,SGs,
LGAs, OPS, DPs
efrigeration and A/C FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS, DPs
29
Installation of Solar NNPC, ECN, FGN, OPS, * * *
thermal electricity NGOs, DPs
FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
Installation of Solar NNPC, ECN, FGN, OPS, * * *
pasteurization, NGOs, DPs
sterilization FMA&WR,
FMEnv.,SGs,
LGAs, OPS, DPs
Small Hydro Construction of Small FMWR, FMP, FGN, OPS, * * *
Projects Hydropower Stations in FMEnv, ECN, DPs
each of the six OPS, DPs
geopolitical zones of the
country
Refurbishment of NNPC, ECN, FGN, OPS, * * *
abandoned SHP projects NGOs, DPs
in the country, namely: FMA&WR,
- 6 MW Hydro project FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP
Progressively increasing NNPC, ECN, FGN, OPS, * * *
indigenous participation NGOs, DPs
in the planning, design FMA&WR,
and construction of FMEnv.,SGs,
hydropower plants in a LGAs, OPS,
ratio that ensures full DPs, FMoP
benefits to the country
Promote local NNPC, ECN, FGN, OPS, * * *
manufacturing & NGOs, DPs
fabrication of turbines FMA&WR,
and other electro- FMEnv.,SGs,
mechanical compnents LGAs, OPS,
DPs, FMoP
Wind Energy Installation of Wind ECN, NGOs, FGN, OPS, * * *
Projects Power Plant FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST
Carry out feasibility ECN, NGOs, FGN, OPS, * * *
study for a hybrid FMA&WR, DPs
demonstration plants FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST
30
Construction of Wind- ECN, NGOs, FGN, OPS, * * *
Solar-Hydro hybrid FMA&WR, DPs
plants FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST
Establishment of Wind ECN, NGOs, FGN, OPS, * * *
Technology Centre FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST, NUC,
NBTE, NCCE,
ERCs
Construction of Wind ECN, NGOs, FGN, OPS, * * *
Projects in the FMA&WR, DPs
residential, commercial FMEnv.,SGs,
and industrial setors LGAs, OPS,
DPs, FMoP,
FMST, NUC,
NBTE, NCCE,
ERCs
Develop and site ECN, NGOs, FGN, OPS, * * *
appropriate wind FMA&WR, DPs
schemes FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST
Installation of wind ECN, NGOs, FGN, OPS, * * *
Home Systems FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST,
FMH&UD
Installation of Wind ECN, NGOs, FGN, OPS, * * *
Water Pumping FMA&WR, DPs
FMEnv.,SGs,
LGAs, OPS,
DPs, FMoP,
FMST
Construction of Large- ECN, NGOs, FGN, OPS, * * *
Scale wind power plants FMEnv., SGs, DPs
LGAs, OPS,
DPs, FMoP,
FMST
31
Encouraging local and ECN, NGOs, FGN, OPS, * * *
foreign investors to FMEnv., SGs, DPs
establish factories for LGAs, OPS,
production of major DPs, FMoP,
components of wind FMST, FMF,
energy systems (e.g. FMFA, NIPC,
wind turbines, blades, FMT&I
deep cycle batteries,
charge controllers
3.8 Component – 7: Incentives for RE Development

Governments should pursue investment incentives for the exploitation of renewable
energy as a means to an end. Policy-makers attribute poor renewable energy development
in most countries to a lack of investment. Incentives are used as a tool to boost
investment and growth, even if the causal links between each of these stages is far from
proven. Incentives work by changing the parameters of an investment project. Investors
choose to make investments when the Net Present Value (NPV) of a project’s cash flows
(suitably discounted) is greater than zero. In a world where companies face capital
rationing, they choose the mix of projects with the greatest Internal Rate of Return.
Incentives bias investors’ decision-making positively in favour of investments in certain
sectors like renewables. By reducing the tax burden or providing cash incentives, there is
increased expected profitability of projects in those sectors. Where investors have good
access to finance, the introduction of special incentives to certain sectors should in theory
lead to an overall increase in investment.
Experiences have shown that government policy support is the key to moving
commercial renewable energy development forward in its initial stages. Government-
supported financial and economic incentives, in particular, play an important role in
helping to develop commercial markets and reduce the financial life-cycle costs of
renewable energy technologies.
The governments also recognize that the financial life-cycle costs of today’s renewable
energy systems often exceed those of conventional alternatives. As a result, governments
are providing financial incentives to help overcome the financial incremental costs of
renewable energy systems. In most cases, the financial incentives are structured and
applied in ways that aim to reduce the cost of renewable energy systems, thereby building
toward a future where the technologies are financially viable. Financial incentives are
also being provided to counterbalance those provided to conventional alternatives (that is,
to provide a level playing field), and to account for environmental costs and benefits not
considered in conventional economic comparisons and pricing methodologies.
32
Table 19: Incentives for RE Development
Targeted ACTIVITIES Responsible Proposed Timeline
Provision of low interest CBN, FMF, FGN, OPS, * * *
ECONOMIC
soft loans from special NCs, OPS, DPs DPs
INCENTIVES
low interest development
finance agencies such as
Bank of Industry (BOI)
and Community Bank
should be reserved for
Renewable Energy
Supply and Utilization
Projects, at interest rate
not exceeding 5% p.a.
Subsidies and Grants: CBN, FMF, FGN, OPS, * * *
Subsidies of up to 30% NCs, OPS, DPs DPs
of initial costs of a RE
utilization facility is to be
granted to communities,
enterprises and
individuals that embark
on such projects. The
subsidies should however
be in kind, and should be
subject to due processing
by the responsible
administering agency, the
ECN.
Waiver of Purchase CBN, FMF, FGN, OPS, * * *
Taxes: Individual, NCs, OPS, DPs DPs
corporate or community
consumers of RE
technologies should
benefit from a waiver of
initial purchase taxes,
such as VAT.
33
Provision of CBN, FMF, FGN, OPS, * * *
appropriate rebates on NCs, OPS, DPs DPs
income Taxes and
Levies for individuals
and corporate bodies who
acquire, at their own cost,
renewable energy
technologies and who are
subject to income tax or
community levies by
government
FISCAL Lower Profit Tax: CBN, FMF, FGN, OPS, * * *
INCENTIVES Corporate organizations NCs, OPS, DPs DPs
that are involved in RE
business should pay
profit tax at 50% of
prevailing rate (presently
30%).
Tax Holidays: For new CBN, FMF, FGN, OPS, * * *
companies active in RE, NCs, OPS, DPs, DPs
a tax holiday should be NIPC, FIRS
provided for a minimum
of ten years of operation.
Reduction in Import CBN, FMF, FGN, OPS, * * *
Duty for materials, NCs, OPS, DPs DPs
components and
equipment used for the
manufacturing of RE
devices, products and
components.
Capital Allowance: CBN, FMF, FGN, OPS, * * *

Investment Capital NCs, OPS, DPs DPs
Allowance of 20% per
year for the first four (4
No.) years and 19% in
the 5th year, with 1%
retained in the books, is
to be provided.
34
Capital Relief: CBN, FMF, FGN, OPS, * * *
Government should NCs, OPS, DPs DPs
provide interest free
capital relief of 50% on
the initial investments to
genuine manufacturers of
renewable energy
equipment, devices and
systems. The relief is to
be provided in kind, in
the form of needed
facilities for the
production activities. A
graduated repayment
schedule of 10%, 20%,
30% and 40% of the
relief in the 1st, 2nd, 3rd
and 4th repayment years
respectively, beginning
from the second year of
production, is to be
specified.
Encourage the use of CBN, FMF, FGN, OPS, * * *

Solar water heaters and NCs, OPS, DPs DPs
biogas for water heating
in new housing estates,
as well as bio-fuels in
transport vehicles.
3.9 Component – 8: Research and Development

Coherent R&D programmes for renewable energies are key elements in designing
political strategies, not only for renewable energies but also for climate mitigation.
Enhancing the dialogue between science and policy is essential to achieve a consistent
global approach which takes into account the maturity of the different renewable energy
technologies.
Renewable energy could meet almost half of global energy demand by 2050 according to
the International Energy Agency’s ambitious BLUE MAP scenario published in Energy
Technology Perspectives 2008.
Research and development (R&D) has a vital role to play if the potential of renewable
energy is to be fully exploited. Policy measures, such as taxes, cap and trade schemes,
obligations and feed-in tariffs, which take into account environmental impacts and, in
particular, the social cost of carbon dioxide emissions, will contribute to faster
deployment. However, investment in R&D will not be delivered by market signals alone;
35
extensive support at the national and international levels is needed to accelerate the
development of renewable technologies.
R&D targeted at different stages of the innovation chain will yield benefits in the short-
term (up to five years), medium-term (5–15 years); and in the longer term (15 years plus).
R&D with a short-term focus is needed to improve technologies that are already
technically proven like: small hydro, wind energy and the standard silicon-based
conversion of solar energy to electricity in photovoltaic (PV) cells.
Much R&D with a short-term perspective will be provided by industry itself. But
research activity in publicly-funded institutions (universities, laboratories and institutes)
will also be needed. This will provide basic scientific insights and respond to the more
fundamental science, engineering and socio-economic challenges that are inevitably
thrown up in the process of demonstrating and deploying new technologies.
R&D with a medium and long-term perspective is needed to underpin long-term

improvements in renewable technologies and enable breakthroughs that could give such
technologies a decisive advantage in energy markets. The medium-term goal must be to
ensure that renewables can compete successfully, without subsidy, once external
environmental costs and other contributions to social goals (e.g. access, security) are
taken into account. Medium- or long-term R&D efforts in this area will largely be
developed through public sector support.
Regardless of whether R&D is conducted with a long or short-term perspective, it must

contribute to improved performance and cost reductions or otherwise help to reinforce the
role of renewable energy in a sustainable energy system. Areas of focus for R&D activity
should be:
• improved performance, including conversion efficiency, reliability, durability and
sustainability;
• advanced manufacturing techniques for components;
• reduced material requirements, especially for toxic materials;
• sustainable production processes that minimize life-cycle environmental impacts
through manufacturing, use, recycling and final disposal;
• improved methods for integrating renewable energy into buildings, electricity
grids and other distribution systems;
• socio-economic research aimed at developing effective policy measures that will
encourage the deployment of renewables and enhance public acceptability of new
energy technologies; and
• capacity-building aimed at developing new generations of trained scientists,
engineers and others.
36
Table 20: Research and Development
RE National Intensify R & D in FMST, ECN, FGN (ECN), * * *
Programmes renewable energy RIs, OPS, DPs, OPS, DPs
developed and science and technology TIs.
Research as well as policy
Centres analysis and market
well-equiped research
Provide increased FMST, ECN, FGN (ECN), * * *
funding to research RIs, OPS, DPs, OPS, DPs
institutes, centers and NASENI
tertiary institutions, who
are undertaking R & D
work on renewable
energy resources to
ensure production and
industrial applications.
Upgrade facilities in the FMST, ECN, FGN (ECN), * * *
nation’s designated RIs, OPS, DPs OPS, DPs
renewable energy
research centres and
institutes.
Equip the National FMST, ECN, FGN (ECN), * * *
Renewable Energy RIs, OPS, DPs, OPS, DPs
Centres and other Tert. Insts.
Universities with energy
R & D capability and
facilities
Conduct R & D and FMST, ECN, FGN (ECN), * * *
technical studies on RIs, OPS, DPs, OPS, DPs
renewable energy Tert. Insts.
policies and institutional
structures as
well as for detailed case
study
assessments
37
Develop and promote FMST, ECN, FGN (ECN), * * *
local capability in the RIs, OPS, DPs, OPS, DPs
nation’s Energy Centres NASENI,
and Research Institutes NESRESA,
for the design and NDE, RMRDC
fabrication of efficient
(environmentally
friendly) energy devices
and technologies for the
utilization of renewable
energy resources
Ensure that earnings FMST, ECN, FGN (ECN), * * *
from crude oil and other RIs, OPS, DPs, OPS, DPs
energy resources MPR, NNPC,
contribute significantly PTDF
to Research,
Development and
Training (R, D & T) in
renewable energy sub-
sector of the national
economy.
Develop research FMST, ECN, FGN (ECN), * * *
portfolios in solar RIs, OPS, DPs, OPS, DPs
thermal energy & solar NASENI, FMoP,
PV, Wind, Small Hydo REA, TIs
and Biomass
3.10 Component – 9: Standards, Codes of Practice and Specifications

Interest in the use of alternative energy in the form of renewable energy has increased
substantially because of the potential to provide increased reliability and lower cost of
power delivery to the customer, particularly with customer-site generation. There are also
substantial environmental benefits in reduced or no emissions as compared with
traditional technologies.
The new means for generation, storage and transmission of energy present exciting
possibilities but raise many questions about safety and reliability, questions that must be
answered to ensure public acceptance. For example, the integration of new generation
and storage technologies with existing national grids need to provide safe and reliable
service during peak and off peak demand.
Governments must be committed to the advancement of safe, renewable and sustainable

energy through the necessary research, testing and development of standards and codes to
help energy end-users make a smooth and safe transition to alternative energy.
The equipment and systems used for alternative energy are required to comply with
numerous electrical, fire, mechanical, plumbing, and building-related codes and
38
installation requirements. These different codes require compliance with different
standards and installation requirements.
Relevant agencies of government have developed standards and codes for use by code
and inspection authorities, electric utilities, contractors, installers, users, system
designers, and other interested parties to aid in understanding the basic components of
alternative energy systems and the applicable codes and standards in order to facilitate a
reasonably safe and code-compliant installation.
Table 21: Standards, Codes of Practice and Specifications

Standards and Compile directory of SON, ECN, FGN (SON), * * *
Codes for global FMJ, FMI&C, OPS, DPs
Renewable and Africa-wide and NGOs, CPC,
Energy proven Prof. Assocs.
Technologies successful standards,
established codes of practice on
renewable energy
technologies
Develop Standards and SON, ECN, FGN (SON), * * *
Codes for each FMJ, FMoI, OPS, DPs
Renewable Energy NASENI, RIs,
Technologies: NESREA
Installations,
Maintenance,
Components, etc..
Develop standards for SON, ECN, FGN (SON), * * *
solar radiation FMJ, FMoI, OPS, DPs
measurement process, NIMET
measurement instrument
calibration, etc..
Develop Standards for SON, ECN, FGN (SON), * * *
solar cells (modules) FMJ, FMoI, Ris, OPS, DPs
characteristic NESREA
measurement, solar cells
(modules) tests and
other standards referring
to solar cells (modules)
production and testing,
etc.
Develop standards to SON, ECN, FGN (SON), * * *
regulate solar simulators FMJ, FMoI, OPS, DPs
and testing methods.
39
In this category various SON, ECN, FGN (SON), * * *
standards regulating FMJ, FMoI, OPS, DPs
modes of photovoltaic NESREA
system functioning
supervision or standards
advising planning and
implementation of such
systems can be found.
The category includes
safety regulations,
which have to be
considered upon
photovoltaic systems
implementation.
Develop standards for SON, ECN, FGN (SON), * * *
batteries, over-voltage FMJ, FMoI, OPS, DPs
protection components NESREA
and other system
components not
included in the
categories mentioned
above.
3.11 Component – 10: Local Manufacturing & Commercialization

Issues of environment, energy security and least-cost energy access for rural populations
have all played a role in making renewable energy an integral component of the nation’s
development strategy. Efforts to promote renewable energy in Nigeria have intensified in
recent years, with several domestically and internationally supported initiatives, but the
widespread commercialization and adoption of locally manufactured technologies are
impeded by many challenges in capacity, financing, policy, technology and information.
This component is meant to strategically address a number of these challenges.
Table 22: Local Manufacturing & Commercialization

Establish National BoI, FMoI, FG (ECN) * * *
Renewable Energy OPS, DPs,
Technologies Designers ECN, SON,
Association (NRETDA) MAN, FMST
Conduct Inventory of BoI, FMI &C, FG (ECN) * * *
Locally manufactured OPS, DPs,
renewable appliances ECN, SON,
and equipment in MAN, FMST,
Nigeria RMRDC
40
Produce catalogue of BoI, FMoI, FG (ECN) * * *
existing Energy R & D OPS, DPs,
results and pilot projects ECN, SON,
in the country MAN, FMST,
RMRDC, NBS
Link industrial Sector to BoI, FMoI, FG (ECN) * * *
Energy R & D OPS, DPs,
agencies/institutions and ECN, SON,
vice versa MAN, FMST,
NASENI
Develop comprehensive BoI, FMoI, FG (ECN) * * *
database of researchers, OPS, DPs,
profiling their work and ECN, SON,
expertise MAN, FMST
Organize Expos, Trade BoI, FMoI, FG (ECN) * * *
Fairs to showcase R & OPS, DPs,
D outputs ECN, SON,
MAN, FMST,
NACCIMA,
NIPC
Establish State –of –the BoI, FMoI, FG (ECN) * * *
art workshop for the OPS, DPs,
manufacturing of simple ECN, SON,
(environmentally MAN, FMST,
friendly) renewable NASENI, NIPC
energy devices
Provide soft loans to BoI, FMI &C, FG (ECN) * * *
project developers to OPS, DPs,
scale up and ECN, MAN,
commercialize pilot FMST, NDE
projects
Establish market-based BoI, FMoI, FG (ECN) * * *
instruments for RE OPS, DPs,
commercialization: ECN, MAN,
concessionary financing FMST, FMF,
arrangements, targeted, NIPC
but market value credit
lines, tax relief to
investors and
standardized Power
Purchase Agreement
(PPA), etc..
Produce comprehensive BoI, FMoI, FG (ECN) * * *
business plan for the OPS, DPs,
commercialization of ECN, MAN,
the R & D results FMST
41
4.0 ECONOMIC AND FISCAL INCENTIVES
4.1 Introduction
Incentives are essential in promoting the development of renewable energy. Being new,
the sub-sector faces serious difficulties in penetrating and establishing its place in the
energy market; notwithstanding the fact that they could play significant role in meeting
energy needs in a sustainable manner. One of the challenges include high initial cost,
hence the need for some economic incentives to encourage its development.
The incentives fall under two categories, namely:

i. Financial Incentives
These include subsidies, grants etc that are targeted mostly at the demand side
ii. Fiscal Incentives
These include tax relief, duty and levy waivers, etc which are targeted mostly at
the supply side.
4.2 Financial Incentives

(a) Soft Loans
A percentage of the annual loans by special low interest development finance agencies
should be reserved for Renewable Energy Supply and Utilization Projects, at interest rate
not exceeding 5% p.a.
(b) Subsidies and Grants

Subsidies of up to 30% of initial costs of a RE utilization facility should be granted to
communities, enterprises and individuals that embark on such projects. The subsidies
should however be in kind, and should be subject to due processing by the responsible
administering agency, the ECN.
Examples may be found in USA, Germany, Thailand, Korea, who offer subsidies that
range between 30-50%.
(c) Capacity Development

Free (sponsored) training programme should be provided for interested communities and
individuals on RE technologies as business ventures. Examples of such programmes are
production, operation and maintenance of biodigesters, improved woodstoves and other
more efficient biomass stoves, biomass briquetting machines, installation operation and
maintenance of solar-PV systems, wind power generators, small-scale hydropower
systems etc.
Special funding for such programmes is to be provided, principally by government. Other

local or foreign institutions/individuals may contribute to it.
42
4.3 Fiscal Incentives
These packages of incentives are targeted at producers/providers of RE goods and
services, such as manufacturers, corporate importers and suppliers, providers of technical
services and supports.
(a) Lower Profit Tax
Corporate organizations that are involved in RE business should pay profit tax at
50% of prevailing rate (presently 30%).
(b) Tax Holidays

For new companies active in RE, a tax holiday should be provided for minimum
of ten years of operation.
(c) Reduction in Import Duty
(i) Import of materials, components and equipment by bonafide
manufacturers of RE devices and components. Exclusively for the
manufacture of the said devices and components, should be duty free.
(ii) Import of RE devices and components should attract import duties as
indicated.
PV: Modules 0%
Module sub-assemblies and spares 0%
Solar batteries 0%
Inverters 0%
Charge controllers 0%
Solar water pumps 0%
Solar refrigerators 0%
Wind: Wind turbines 0%

Wind turbine sub-assemblies & spare parts 0%
Small –Scale Hydro: Micro-hydro turbines 0%

Micro-hydro turbine sub-assemblies & spare parts 0%
Solar Thermal: Solar-Thermal Water Heaters 0%

Specially Selective Surfaces 0%
Transparent Insulation 0%
Biomass Energy: Processing equipments/plants 0%
(d) Capital Allowance

Investment Capital Allowance of 20% per year for the first four (4 No.) years and
19% in the 5th year, with 1% retained in the books, is to be provided.
(e) Capital Relief

Government should provide interest free capital relief of 50% on the initial
investments to genuine manufacturers of renewable energy equipment, devices
43
and systems. The relief is to be provided in kind, in the form of needed facilities
for the production activities. A graduated repayment schedule of 10%, 20%, 30%
and 40% of the relief in the 1st, 2nd, 3rd and 4th repayment years respectively,
beginning from the second year of production, is to be specified.
An example is Czechoslovakia which provides 30% relief on initial investments

for producers of solar water heating systems and components. The stipulated
repayment schedule is 20% - 1st year, 30% - 2nd year, 40% -3rd year.
(f) Demand Stimulation

It is further recommended that water heating in new government housing estates
should be done with solar water heaters or biogas generators. Use of E10 and B20
in Government vehicles and generators use CFLs in Government building.
(g) Waiver of Purchase Taxes

Individual, Corporate or Community consumers of renewable energy technologies
should benefit from a waiver of initial purchase taxes, e.g. VAT.
(h) Rebates on Income Taxes and Levies

For individuals and corporate bodies who acquire, at their own cost, renewable
energy technologies and who are subject to income tax or community levies by
government, such taxes or levies should be subject to rebate as follows:
Expenditure on Renewable Energy Technology % Rebate on Tax/Levy

Less than N100, 000.00 10%
N100, 000.00 - N499, 999.00 15%
N500, 000.00 - N5 million 20%
Greater than N5 million 25%
The amount of rebate, however, is limited to a maximum of 10% of amount spent on

renewable energy technology.
44
5.0 RISK IDENTIFICATION AND ANALYSIS
5.1 Introduction
Several factors will militate against the successful implementation of planned activities
and milestones, and may hinder the realization of the objectives and targets of the REMP.
These potential risk factors include policy and political changes, uncertainties in the
energy market, instability in the macroeconomic framework, international shocks,
operational risk (inadequate public awareness, human resources and raw materials
availability) and risks associated with neglect of infrastructure.
Identification and analysis of these risks will allow stakeholders in the renewable energy
economy to factor in these risks, or seek alternative approaches to reaching national
renewable energy targets and objectives.
5.2 Policy and Political Risks

Several policy and political risks confront the renewable energy sector. These include:
• Outlined policies not adopted. Sound policies elaborately developed by

government might at the end of the day not be adopted, and when adopted may
not be implemented to significant levels. Several policy documents, including
Vision 2010, several Rolling Plans and the recent NEEDS and SEEDS documents
have reserved key roles for renewable energy. Such policy attention may not
necessarily translate into tangible changes in actions of government. Strategies in
addressing such implementation risks include the setting of realistic targets,
identification of make-or-break implementation issues, outlining concrete
activities to address risks and proactively securing the political will to reach
agreed targets.
The contents of this REMP shall be strengthened by the time the NASS passes the
RE bill now before it.
• Policy inconsistency, instability and contending interests within Government. A

certain risk will prevail when elements of the REMP are not properly aligned to
the overall economic policy thrust of the government or are at cross-purposes to
some broader energy policy objectives. This may result in policy inconsistencies
and poor performance of the Master Plan. Inconsistencies may also result with
frequent changes in policy thrusts, for instance in trade policies. Other
inconsistent government policies, particularly in the application of tariffs and
exemptions, transaction costs at ports, customs clearance procedures, and the use
of import bans on goods, merchandize, products, equipment and production
machinery; tariff and non-tariff barriers pose great risk on investment in RE.
When government is irresolute as a result of poor planning or pressure from

contending interests, the overall objectives of the Master Plan may be
compromised. To address these risks, it is not enough to design rational and
45
ambitious plans, meeting the concerns and interests of all relevant stakeholders is
important in reducing potential conflicts and inertia. Greater chances of success
will be achieved when key stakeholders participate fully, and where
implementation agencies are properly equipped.
• Risks of inadequate implementation. A certain degree of policy short sightedness

characterizes the implementation of policies of the country. Even when energy
policy documents encourage long term planning, few concrete actions are taken to
build the groundwork for meeting future security, economic, social and
environmental challenges. The large revenue from finite hydrocarbons and
abundance of conventional energy resources may not allow us to see the future
challenges of a growing population and declining resource base. Accelerated
energy policy reforms where pricing increasingly reflect the opportunity cost of
resource use will stimulate conservation and a price regime that encourages
investments in renewables.
• Lack of continuity in government policies. Government has embarked on several

reforms leading to increased liberalization of the energy market, and potentially
creating opportunities for renewable energy to make increased market entry.
Uncertainties loom over the policy direction of the government that will succeed
the present one. In an atmosphere where continuity of policy is often lacking, the
risk of a new government discarding prevailing reforms is real. Accelerating the
pace of implementation of the REMP and rapidly institutionalizing its activities
will assist in entrenching the key activities and achieving its objectives.
• Socio-cultural conflicts. Local conflicts and trade disputes often interrupt supply
of some RE resources and end products. Restive youths and armed bandits, long-
drawn trade disputes, electoral malpractices and endless election petitions – all
create a political atmosphere that is not supportive of investments, including
potential renewable energy businesses.
5.3 Market Risks

Price distortions, poor regulatory environment and inadequate infrastructure characterize
current energy market conditions in the country. This has reduced the scope for
competition, growth and innovation in the market. Such market conditions create a
disincentive for market entry for mature RE technologies such as solar photovoltaic,
small scale hydro and wind power; and make hydrogen, ocean and geothermal energy
systems prohibitive.
The energy market in Nigeria is on the verge of vital reforms. These include the Power
Sector Reform, solid minerals, oil and gas and specific initiatives on renewable energy.
The outcome of these emerging RE options will introduce a more vibrant energy market
that will stimulate growth, build infrastructure, increase competition and create a basis for
investments in tomorrow’s energy systems. The innovations that will follow will reduce
market constraints for RE systems. The innovations that will follow will reduce market
constraints for RE systems.
46
However, growing the renewable energy sector will depend on a stable macroeconomic
framework. Already the Vision20:2020 outlined a number of risks that are inherent in the
Nigerian economy, and they include:
• poor and decaying infrastructure;
• epileptic power supply;
• weak fiscal and monetary policy coordination;
• fiscal dominance;
• pervasive rent seeking behaviour by private and public agents, including
corruption;
• weak institution and regulatory deficit;
• policy reversals and lack of follow through;
• inordinate dependence on the oil sector for government revenue/expenditure;
• disconnect between the financial sector and the real sector;
• exchange rate instability;
• insecurity of lives and property.
These factors constrain the development of more rational and liberal macroeconomic
framework that is supportive of market development for renewable energy. The following
specific factors constitute major risks for the success of the REMP:
• Weak purchasing power. The level of poverty in Nigeria is high, and increasing.
This reduces opportunities to embark on fuel switching from traditional to modern
renewable uses. Certain renewable technologies are comparatively expensive.
Even low cost improved woodstoves seem increasingly beyond the affordability
of the extreme poor that make up about 70 percent of the population. The risk of
increasing poverty will therefore compromise the objectives of the REMP. The
situation may change if current reforms in years to come begin to reduce poverty,
and when middle class preferences change to greener energy options. Increased
emphasis on the provision of micro finance will also assist in boosting the ability
of the poor to afford new and cleaner energy options.
• Inadequate access to investment capital. There is a major shortage of investment

capital, leading to high interest rates for RE electricity. Several promising
projects, especially in new areas like renewable energy investments suffer
setbacks due to the scarcity of funds from banks and financial institutions. The
reforms in the financial sector aimed at creating more solid financial institutions
and also warehousing some of Nigeria’s current external reserves will help bolster
the financial market and improve overall access and cost of credits.
• High initial cost for electricity generation. Though conventional energy prices are
assumed to hold back the development of alternative energy supplies, the fact of
the matter is that the RE systems for electricity generation are more expensive at
the initial investment. However in the long run, the capital investment is cheaper
than the conventional sources.
47
• Poor infrastructure. Poor infrastructure increases transaction costs and reduces
the profitability of businesses. Roads, telecommunication – and in fact, access to
energy is important for local manufacturing of renewable energy systems and
components.
• Macroeconomic factors. Changes in the Nigeria economy or effects from the

global economy can result in significantly unstable conditions for the Nigerian
currency. The generally upward movement of the exchange rate of the Naira to all
international currencies, high interest rate, unfriendly tax regime and excise duty
and other levies are great risk to local manufacturing industry.
• Non-implementation of financial incentives. The REMP’s vision is premised on

the immediate imperative to make the playing field among competing energy
sources more even. It also envisages a rapid increase in financial incentives to
support the growth and development of renewable energy in Nigeria. However,
there is always a risk that the implementation of these agreed incentives might fall
short of the requirements of the sector. Non- implementation or withdrawal of
government incentives such as subsidies would result in low return on investment,
which could ultimately lead to project abandonment.
• Loan defaulting. Unfortunately, Nigeria has not been able to develop the culture
of prompt loan repayment as many other African countries especially in southern
and eastern sub-regions have successfully done. This is a great threat and risk to
renewable energy market development, as loans would necessarily have to be
repaid in order to sustain and expand the market. The fund managers also are a
great risk to the market as examples of failed banks and national project funds that
have been mismanaged are many. The poor state of public utilities is a glaring
example of their reluctance to pay bills. Utility’s unintelligible tariff and billing
have to be avoided in the new renewable energy market.
• Counterpart funding. Projects requiring counterpart funding have often been

delayed because of the inability of the country to meet its own obligation.
Investing in realistic projects and increased political will to back them up is
essential.
5.4 International Development Risks

In an increasingly interdependent world, globalization in the movement of capital,
technology, goods and services transcend boundaries and subject plans like the REMP to
pressure. Of particular importance to the success of the REMP is the global market for
renewable energy technologies and the actions of other governments and international
agencies. However, the following global risks may affect RE development in Nigeria:
• Global market risks. Several international developments with strong impacts on

the successful implementation of the REMP are outside Nigeria’s control. For
48
instance, while the objectives of the REMP are premised on lowering the cost of
renewable energy technologies, such as PVs, phenomenal growth in demand from
developed countries, primarily USA and Germany, have kept the price of solar
modules at a high level. Local incentives in other countries can both influence the
prices of our renewable import, and will also determine the appetite of major
manufacturers of these technologies to venture into our markets.
• International cooperation risks. Multi-lateral agencies such as the World Bank,

UNDP, ADB as well as bilateral agencies such as USAID have contributed
greatly to lifting renewable energy from relative obscurity to the mainstream of
energy policy making. Much of the planned activities of the REMP are expected
to be financed from international sources. This constitutes a major risk factor that
must be managed to prevent the crumbling of the main pillars of the REMP.
Managing other related issues such as democracy, economic reforms and good
governance is important in securing international support for clean and renewable
energy programmes.
5.5 Standards and Quality Control Risks

A major constraint to the development of the renewable energy market in Nigeria is the
inadequate implementation of established standard and quality control of locally
manufactured and imported technologies. Creating quality assurance is a precondition for
building consumer confidence and in growing the market for renewable energy. Three
important dimensions to issues of quality include the perception potential users, quality
assurance as well as professionalism among operators.
• Perception on untested technologies. Much of the technologies envisaged in the

REMP are “new”, or non-conventional. This is so much the case for improved
fuelwood burning stoves as they are for biogas plants or solar water heaters.
Potential users are worried about their efficacy or complexities in using them.
The perception of most of these systems are untested technologies can only be
countered by increased public awareness and policy reform that makes them more
affordable.
• Poorly developed standards and testing procedures. Presently, there are

inadequate number testing centers for both locally made and imported renewable
energy technologies. Consequently the requisite regulatory environment does not
exist. This results to sub-standard technologies that harm the market. The REMP
recommends the strengthening of agencies responsible for quality control and
standards for product entering the Nigerian market with emphasis on RE
technologies.
• Entry of unqualified people in the field. The lack of professional associations and
strong entrepreneurship in emerging renewable energy businesses, particularly
solar PV and improved woodstoves result in people without the relevant
professional background to enter the industry. They achieve bad publicity for the
industry and make market growth difficult.
49
5.6 Research and Development Risks
A vibrant R&D capacity and infrastructure is crucial in achieving several objectives of
the REMP. Building the capacities to launch and sustain programmes are major
concerns.
• R&D capacity risk. Achieving the targets of the RE will depend on the
identification of appropriate resource centres and professionals to lead the long
term R&D programmes. The conditions of Nigeria’s R&D institutions fall short
of expectations in several respects, including funding, infrastructure, professional
morale, etc. Poor economic conditions in the country have also reduced the stock
and quality of existing scientists. Achieving set targets and milestones are
therefore difficult under these conditions.
Establishing vibrant resource centres can assist in mitigating R&D capacity risks.
Such a long term and collaborative programme should be overseen by a strong
board and should be submitted to periodic monitoring and evaluation.
• R&D funding risk. Funding for R&D has always been in short supply in Nigeria.
This may be more so for research on futuristic energy systems. Leveraging
adequate financial resources to launch and sustain R&D programmes, including
the proposed NERDP will therefore be challenging.
Part of the failure to raise enough financial resources for R&D efforts in Nigeria
is the over-dependence on public budgets. A mitigation strategy will focus on
expanding the scope for funding by actively engaging international agencies, the
private sector and fostering international collaboration among R&D centres.
5.7 Environmental Risks

Despite the known fact that renewable energy represents a cleaner alternative, certain
environmental risk occurs, and these include:
• Adverse impact on the environment. Large and small hydro plants are known for
their impacts on aquatic life. Wind turbines also cause noise pollution. Poorly
managed biofuel consumption may also result in deforestation. In some situations,
the production of liquid fuels from biological sources may consume so much
conventional energy that their environmental effects might be enormous. Several
environmental tools could be useful in addressing these concerns, and they
include environmental impact assessment, environmental audits and
environmental management planning.
• Human dislocation and resettlement. Hydro power plants are known to cause
dislocation to local livelihoods, including farming, fishing and transportation. In
severe cases, they lead to resettlement of communities. These environmental
trade-offs must be properly assessed, and alternative approaches to meeting
energy needs considered.
50
• Esthetics. Several clean and renewable energy forms unfortunately might not be
so pleasant to behold. Wind farms, for instance arouse significant resentment by
environmentalist, as they seem to deface natural environments. Large PV farms as
currently obtainable in Germany and the US also invoke such concerns, handling
of domestic waste such as excreta for biogas generation will as well pose some
problems.
51
6.0 CONCLUSION
This 2nd edition of the renewable energy master plan (REMP) which is concise and
precise is contained in six chapters. The first chapter is an introduction, which articulates
reasons for the review, drivers of renewable energy and the renewable resources in the
country.
The renewable energy programmes for the provision of electricity, fuels and heat, and
their targets and timelines in the short, medium and long terms are provided in the second
chapter. The third chapter expatiates on the action plans that would facilitate the
attainment of the targets within the timelines. Incentives for the promotion of renewable
energy are articulated in the fourth chapter, while a risk analysis is carried out in the fifth
chapter.
It is projected that renewable electricity is to contribute about 20% of the total electricity
supply in the nation; while renewable fuels (biofuels) is to meet 10% - 20% of the
national fuel supply. Biomass, and indeed fuelwood, would continue to play significant
role in meeting the domestic heat requirements. However, dependence on fuelwood is
expected to decline over the years.
52

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What renewable energy programmes and targets are outlined in the document?

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What action plans are discussed to facilitate achieving the renewable energy targets?

What action plans are discussed to facilitate achieving the renewable energy targets?

RENEWABLE ENERGY

Prof. A. S. Sambo, OON, NPON

The Nigerian government’s commitment to accelerating the development of renewable

This REMP is therefore a roadmap for actualization of Government’s commitment to

Prof. Bassey Ewa Okon

1.2 Energy Resources, Energy Supply and the Economy

Table 1: Fossil Energy Resources and Nuclear Energy Sources

Table 3: Energy Supply and the Nigerian Economy

1.4 Objectives of the Renewable Energy Master Plan

1.5 Overview of the 1st Edition of the REMP

1.5.4 Chapter 4: Planned Activities and Milestones

1.5.5 Chapter 5: Strategy and Implementation Issues

1.5.6 Chapter 6: Risk Identification and Analysis

2.2 Energy Demand and Supply Projections for Nigeria

The following growth scenarios were considered:

Table 4: Projected Access to Grid Electricity by Household for Nigeria

Table 5: Electricity Demand Projections per Scenario, MW

Table 7: Projected Electricity Supply by Fuel Type Based on 13% Economic

Table 9: Solar Programme Targets

Table 11: Wind Programme Targets

Table 12: Summary of Renewable Energy Targets

(iii) Fuels (bio fuels) Targets*

* Based on 13% GDP growth

3.2 Component – 1: Assessment of Resource Base/Data Acquisition

Table 13: Assessment of Resource Base/Data Acquisition

3.3 Component – 2: Renewable Energy Policies, Regulations and Institutional

Table 14: Renewable Energy Policies, Regulations and Institutional Frameworks

3.4 Component – 3: Capacity Building and Skills Development Program

Table 15: Capacity Building and Skills Development Program

3.5 Component – 4: Public Awareness/Sensitization

Table 16: Public Awareness/Sensitization

3.6 Component – 5: Development of Financing Options Program

The activities in this component is geared towards increasing availability of information

In Nigeria access to energy finance is affected by:

(ii) Small Hydropower (SHP)

(iii) On-Shore Wind Plant

(iv) Solar Power Plant

(v) Biomass Power Plant

If successfully exploited, renewables can significantly contribute to addressing two key

Table 18: Development of RE Projects

3.8 Component – 7: Incentives for RE Development

Capital Allowance: CBN, FMF, FGN, OPS, * * *

Encourage the use of CBN, FMF, FGN, OPS, * * *

3.9 Component – 8: Research and Development

R&D with a medium and long-term perspective is needed to underpin long-term

Regardless of whether R&D is conducted with a long or short-term perspective, it must

3.10 Component – 9: Standards, Codes of Practice and Specifications

Governments must be committed to the advancement of safe, renewable and sustainable

Table 21: Standards, Codes of Practice and Specifications

3.11 Component – 10: Local Manufacturing & Commercialization

Table 22: Local Manufacturing & Commercialization

The incentives fall under two categories, namely:

4.2 Financial Incentives

(b) Subsidies and Grants