7 Will a Transition to Renewable Energy Promote …
253
• electricity sector structure often controlled by single, state-owned utilities accountable for a sizable share of generation, transmission and
distribution,
98
• weak grids induced technical limitations,
99 and finally,
• low tariffs and a large volume of required investments.
100
Essentially, any country desirous of deploying a sizable amount of renewables must address these risks through appropriate energy policy and
market strategy-based incentives. For Nigeria, appropriate energy policy
would need to focus on a redesigned, fully liberalized competitive power
market, one that considers competitors in both generation and supply
sectors, in addition to remedying critical barriers highlighted above
through various incentives. The liberalization process will create an entry
point for scaling energy transition regime and overcoming challenges
hampering effective renewable energy deployment in Nigeria, and as
a process will remove monopoly right and introduce competition and
choice of energy providers at competitive prices for energy consumers.
The choice of energy itself and the availability of different energy sources
is an underlying characteristic of the energy transition. The whole aim
of liberalization, however, may not initially focus on price minimization,
but at least to encourage new entrants or investors, and or to generate
additional funds for investments, since Nigeria does not have existing
sufficient capacity to meet demand.
The introduction of competition into the power market is, by implication, an invitation to investors. But investors indeed need an acceptable
level of regulatory and political certainty or are otherwise interested in
understanding what regulatory and political risks exist in, or characterize
a particular energy market. Currently, Nigeria lacks an affirmative legal
framework supporting the implementation of government objectives on
energy mix. This, coupled with energy-related political instability and
rights-based social malady, serves as one of the challenges to renewable
98 Climatescope, ‘The Clean Energy Country Competitiveness Index’ (Bloomberg New
Energy Finance, 2017), http://2017.global-climatescope.org/en/download/insights/climatescope2017-energy-transition.pdf, accessed 18 April 2020.
99 Eberhard and others (n 93); Quitzow and others (n 90)
100 Lucas, del Rio and Sokona (n 86)
253
• electricity sector structure often controlled by single, state-owned utilities accountable for a sizable share of generation, transmission and
distribution,
98
• weak grids induced technical limitations,
99 and finally,
• low tariffs and a large volume of required investments.
100
Essentially, any country desirous of deploying a sizable amount of renewables must address these risks through appropriate energy policy and
market strategy-based incentives. For Nigeria, appropriate energy policy
would need to focus on a redesigned, fully liberalized competitive power
market, one that considers competitors in both generation and supply
sectors, in addition to remedying critical barriers highlighted above
through various incentives. The liberalization process will create an entry
point for scaling energy transition regime and overcoming challenges
hampering effective renewable energy deployment in Nigeria, and as
a process will remove monopoly right and introduce competition and
choice of energy providers at competitive prices for energy consumers.
The choice of energy itself and the availability of different energy sources
is an underlying characteristic of the energy transition. The whole aim
of liberalization, however, may not initially focus on price minimization,
but at least to encourage new entrants or investors, and or to generate
additional funds for investments, since Nigeria does not have existing
sufficient capacity to meet demand.
The introduction of competition into the power market is, by implication, an invitation to investors. But investors indeed need an acceptable
level of regulatory and political certainty or are otherwise interested in
understanding what regulatory and political risks exist in, or characterize
a particular energy market. Currently, Nigeria lacks an affirmative legal
framework supporting the implementation of government objectives on
energy mix. This, coupled with energy-related political instability and
rights-based social malady, serves as one of the challenges to renewable
98 Climatescope, ‘The Clean Energy Country Competitiveness Index’ (Bloomberg New
Energy Finance, 2017), http://2017.global-climatescope.org/en/download/insights/climatescope2017-energy-transition.pdf, accessed 18 April 2020.
99 Eberhard and others (n 93); Quitzow and others (n 90)
100 Lucas, del Rio and Sokona (n 86)