Power Failures Drive Nigeria’s Renewables Push as NERC Strengthens Regulatory Backbone

Amid worsening power grid failures and deep-rooted energy sector challenges, Nigeria is accelerating its transition to renewable energy — with a renewed focus on decentralized systems and regulatory reforms led by the Nigerian Electricity Regulatory Commission (NERC).

Persistent collapses of the national grid — including seven in 2024 alone and over 140 since the sector’s privatization in 2013 — have left millions of Nigerians underserved. Experts attribute these failures to gas shortages, poor maintenance, inadequate investment, and systemic inefficiencies, compounded by a non-cost-reflective tariff system that discourages private sector participation.

Nigeria’s energy infrastructure is further burdened by massive electricity debts, energy theft, weak governance, and widespread insecurity. Compounding these technical and financial issues are commercial and managerial shortfalls, such as ineffective contracts, poor planning, and limited policy alignment with national goals.

Currently, grid supply hovers around 4 gigawatts (GW) — a fraction of the estimated 14 GW demand — leaving more than 80 million Nigerians without access to electricity. In response, the public and private sectors rely on captive diesel and petrol generators, which collectively generate an estimated 24 GW, albeit at more than double the grid’s Band A tariff.

NERC’s Role in Driving Renewable Adoption

In response to this crisis, the Nigerian Electricity Regulatory Commission is aggressively pushing for distributed and renewable energy systems to close the supply gap.

Leveraging its powers under the Electricity Act (EA) 2023, NERC is mandated to license and regulate all electricity sector players, and promote renewable energy adoption as a core national priority (Sections 34(1) and 34(2)(d)).

Key NERC interventions include:

• Mini-Grid Regulations (2016, 2023)
• Eligible Customer Regulations (2017, 2024)
• Supplementary Order to MYTO 2024, which mandates DisCos to source at least 10% of electricity supply from embedded generation, with half of that from renewables

These efforts are aimed at supporting embedded solar systems, interconnected and isolated mini-grids, rooftop solar installations, and hybrid energy models.

Investment and Progress

Nigeria has set a target to generate 30% of its electricity from renewable sources by 2030 under the National Renewable Energy Master Plan. With solar energy potential exceeding 10 GW, and hydropower capacity between 6–10 GW, the country is a viable hub for clean energy investment.

Key initiatives include:

• A €9.3 billion EU-GIZ investment in interconnected solar mini-grids
• A $500 million Nigeria Fund launched by the Nigeria Sovereign Investment Authority to back distributed renewable energy projects
• A $750 million World Bank-funded DARES Project supporting solar hybrid mini-grids in underserved communities
• African Development Bank and PowerGen Renewable Energy partnership targeting 120 MW of renewable capacity across Nigeria and other African nations

Impact and Expansion

Between 2019 and 2024, NERC approved 316 renewable energy projects with a total capacity of 149 MW, including:

• 286 mini-grid permits totaling 36.8 MW
  • 271 isolated mini-grids
  • 8 interconnected mini-grids
  • 7 solar hybrid mini-grids
• 30 embedded and captive generation projects totaling 112 MW

This reflects significant growth, especially in 2023 which saw 84 mini-grid approvals, up from six annually between 2019 and 2020.

The Rural Electrification Agency (REA) attributes its success to NERC’s regulatory reforms, particularly:

• Raising the mini-grid licensing threshold from 1 MW to 5 MW, enabling larger projects
• Facilitating the integration of mini-grids with existing distribution networks

According to REA’s Managing Director, Abba Aliyu, the improved framework has helped deploy over 500 mini-grids and 1.4 million solar home systems, reaching over 7.5 million Nigerians, including 300,000 women-led MSMEs.

“NERC’s interventions have been instrumental in creating a robust regulatory environment that fosters investment and accelerates the rollout of clean energy across the country,” Aliyu said through Media Director Muntari Ibrahim.

Strategic partnerships formed under this framework — including recent MOUs with five private developers — aim to deliver 1,265 MW of renewable energy in distributed projects nationwide.

Conclusion

As Nigeria grapples with persistent grid instability, renewable energy is no longer a distant ambition but a strategic necessity. With NERC’s regulatory leadership and growing international and domestic investments, the country is poised for a cleaner, more reliable, and inclusive energy future.