By:Africanreview

Nigeria’s renewable energy sector offers substantial opportunities for growth, with the country aiming to raise the share of renewables in electricity generation to 23% by 2025 and 36% by 2030

As outlined in the Renewable Energy Master Plan (REMP), targets for installed capacity by 2025 include 2GW from small hydropower, 500MW from solar PV, 400MW from biomass, and 40MW from wind. In line with these plans, Nigeria’s renewable power capacity is projected to reach 1.7GW by 2035, expanding at a compound annual growth rate (CAGR) of 18.9% from 2024 to 2035, according to insights from GlobalData, a leading data and analytics firm.

Solar investment surge

In its most recent publication, Nigeria Power Market Outlook to 2035, Update 2025 – Market Trends, Regulations, and Competitive Landscape, GlobalData forecasts that the country’s annual power generation will grow at a CAGR of 17.5% from 2024 to 2035, eventually reaching 1.8TWh. Within this transition, solar PV is emerging as a key area of investment. The past few years have seen a consistent rise in solar PV installations, largely spurred by the policy and objectives under the REMP.

According to Attaurrahman Ojindaram Saibasan, senior power analyst at GlobalData, “Nigeria relies heavily on thermal sources for its power generation. The nation possesses one of the largest natural gas reserves globally and the most extensive in Africa, which has led to the increasing prevalence of thermal power generation within the country.”

Despite the abundance of natural gas, a major obstacle for power producers remains the inconsistent availability of fuel, which results in significant underuse of generation assets. Following the sector’s privatisation, insufficient infrastructure hindered the creation of a reliable framework for fuel supply agreements, which are essential for securing bankable power purchase agreements.

To mitigate this challenge, Nigeria has increased its emphasis on renewable sources, particularly solar PV, to help meet rising electricity needs. As the country undergoes rapid urbanisation, household electricity demand is climbing, driven by needs such as lighting, refrigeration, cooking, entertainment, and cooling. In addition, power-intensive sectors such as textiles, cement, and food processing continue to consume large amounts of electricity.

Due to the persistent unreliability of the grid, many businesses rely heavily on petrol or diesel generators, suggesting that the actual energy demand in Nigeria is significantly higher than what is shown by grid-based data. Incorporating renewable energy along with storage systems is viewed as a practical solution to bridge this gap.