A deep dive into Nigeria’s energy crisis (+ opportunities for DeCharge)
In the West of Africa, Nigeria, a nation of many cultures and abundant resources, faces an energy dilemma. Rich in oil, the nation’s economy thrives on this black gold, yet electricity remains scarce. Cities endure daily power cuts, rural areas rely on kerosene lamps, and generators hum everywhere.
However, little hope shines through. Solar farms sprout in some areas, and natural gas is captured to reduce waste. Government initiatives aim to diversify the energy mix and improve infrastructure, but corruption and inefficiencies often hinder progress.
Despite these challenges, the Nigerian spirit remains unbroken. Entrepreneurs have created local energy solutions, young engineers drive innovation, and communities embrace renewable energy. Education and grassroots movements advocate for sustainable practices.
In this deep-dive article, I’ll take you through the journey to a sustainable Nigeria as the nation moves forward with resilience and hope.
Here’s what to expect about the rechargeable energy sector in Nigeria and the opportunities for DeCharge to enter and gain market share.
Table of content
· State of Energy in Nigeria
∘ Power generation deficit
∘ Renewable energy potential
· Electric Vehicles (EVs) in Nigeria
· State of Rechargeable Devices in Nigeria
· DeCharge in Nigeria
∘ Opportunities for DeCharge
∘ Strategies for Capturing Nigerian Market Share
· Key Takeaway
State of Energy in Nigeria — A Bright Future?
Nigeria is the most populated country in Africa, and it is well known for its rich oil reserves and energy production. However, the country’s energy landscape has been marked by challenges, including power outages, reliance on fossil fuels, and a lack of access to clean energy.
The energy sector relies heavily on fossil fuels, with petroleum products accounting for a huge amount of the country’s energy consumption. This heavy dependence on fossil fuels has led to environmental concerns, including air pollution and greenhouse gas emissions.
Additionally, the country’s power sector is plagued by frequent power outages, which can last for hours in some areas or even days, significantly impacting economic productivity and daily life. Despite the significant energy resources, including oil and natural gas, Nigeria faces power generation and distribution issues.
In 2022, Nigeria’s total energy consumption was 168 mega tonnes, growing 1.7% per year since 2012. Also, electricity consumption per capita is relatively low, at 120 kWh/hab, 2.8 times lower than the average for Sub-Saharan Africa.
As Africa’s largest crude oil producer, oil production has been declining due to ageing infrastructure, poor maintenance, and theft. The average crude oil production in May 2024 fell to 1.25 million barrels daily.
Regardless, many Nigerians lack access to clean energy sources, such as solar and wind power, which can help reduce the country’s reliance on fossil fuels. The CO2 emissions per capita were 0.49 tCO2/capita in 2022, with a target to reduce emissions by 20% below the business-as-usual scenario by 2030 and reach net-zero emissions by 2060.
A survey by Shell found that 75% of Nigerians consider reliable electricity one of the most important issues facing society, alongside employment and education. Most Nigerians believe that collaboration between government, industry, and society is key to building future energy solutions.
Power generation deficit
The current national grid has an installed electricity generation capacity of 11,165.4 MW but only transmits less than 5,000 MW to the grid daily. This is significantly lower than the estimated demand of 19,798 MW, leaving a large deficit. This further explains why over 92 million Nigerians, more than 40% of the population, lack access to grid electricity.
Hence, Nigeria’s electricity generation heavily depends on fossil fuels, especially natural gas, which accounts for over 70% of the capacity. Infrastructure and maintenance issues have affected the reliance on gas-powered plants, leading to unreliable power supply. The country’s ageing and inadequate transmission infrastructure also contribute to the power supply deficit.
Frequent grid collapses and power outages are recurring issues, with the national grid collapsing 98 times under the previous administration of former President Muhammadu Buhari.
Many households and businesses resort to purchasing and operating expensive and polluting fuel-powered generators to cope with the unreliable grid, which provided an estimated 6,000 MW in 2008. The reliance on generators has led to high operational costs for businesses and individuals, deterring foreign investment and weakening industrialization.
Renewable energy potential
Nigeria has abundant solar radiation, with average daily solar radiation ranging from 3.5 to 7.0 kWh/m2 across the country. The northern regions of Nigeria have the highest solar radiation levels, making them ideal for large-scale solar photovoltaic (PV) projects. Nigeria’s solar energy potential is estimated to be around 427,000 MW, but only a small fraction has been tapped.
Also, there’s a large hydropower potential of around 24 GW, with an additional 3.5 GW of small hydropower potential. However, only about 1.9 GW of large hydropower and 60 MW of small hydropower have been developed. Major hydropower projects in Nigeria include the Kainji, Jebba, and Shiroro dams, with a combined installed capacity of around 1.9 GW.
The Nigerian government has implemented several policies and incentives to promote renewable energy development, including:
- The National Renewable Energy and Energy Efficiency Policy (NREEEP), which sets targets for renewable energy deployment.
- The Renewable Energy Master Plan, which aims to increase the share of renewables in the energy mix to 30% by 2030.
- Tax incentives and import duty waivers for renewable energy equipment and components.
- The Rural Electrification Agency, which supports off-grid renewable energy projects in rural areas
Electric Vehicles (EVs) in Nigeria
Currently, there are some electric vehicles in Nigeria, even though the market is still in its infancy. The exact number of electric vehicles in the country is not readily available, but only a few hundred units have been sold since their introduction in 2020. Majority of the EVs in Nigeria are privately owned and rely on private charging stations installed in homes and offices.
Some of the top electric vehicle startups and companies in Nigeria include TOUR Drive NG, VoltaEV, Hellobikee, Quadricycle Automobile, Trekk Scooters, and Possible Electric Vehicle Solution, Egoras Technology etc.
Electric vehicles typically have higher upfront costs than gasoline-powered vehicles. However, their running costs are significantly lower due to reduced maintenance and lower fuel costs.
The high upfront costs of EVs make them less accessible to the average Nigerian consumer. However, financing schemes and subsidies can help offset these costs and make EVs more affordable.
There is also a scarcity of certified EV technicians in Nigeria, which can create issues with maintenance and repair. Then, the country lacks a viable battery recycling and disposal system, which is essential for reducing environmental harm and conserving raw materials.
The future growth potential of electric vehicles (EVs) in Nigeria is promising, driven by rising fuel prices and increasing awareness of EVs. The increasing fuel cost in Nigeria is a major factor in the growing demand for EVs. As fuel prices continue to rise, more people are looking for alternative transportation options that are more cost-effective and environmentally friendly.
Public awareness about the benefits of EVs, such as reduced carbon emissions and lower operating costs, is growing. This increased awareness drives demand for EVs and encourages more people to adopt sustainable transportation options.
On one hand, there are initiatives to promote the adoption of electric vehicles (EVs) and develop EV infrastructure. For instance, the National Automotive Design and Development Council (NADDC) has set up EV charging stations in some universities across the country. Private charging stations are also installed in homes and offices, although these are not widespread.
On the other hand, the availability of public charging infrastructure is limited, and the regulatory framework for EVs is still evolving. The lack of specific regulations for EV infrastructure is a significant challenge, as it hinders the development of a sustainable and efficient charging network. The current infrastructure is insufficient, and concerted efforts are needed to revamp the regulatory framework, finance, train, and build capacity to upgrade it.
The Nigerian government has been actively promoting EV adoption through initiatives such as the Nigerian Energy Transition Plan (ETP) and the Electric Vehicle Development Plan. These plans aim to phase out internal combustion engines and promote the use of EVs, which will help reduce greenhouse gas emissions and improve air quality.
The government has also introduced incentives such as tax rebates, import duty waivers, and subsidies for EV purchases to encourage adoption. These incentives will continue to support the growth of the EV market in Nigeria.
Speaking at the launch of Nigeria’s first EV charging station in Abuja, the NNPC New Energies Limited (NNEL) managing director, Kanayo Odoe, referred to renewable energy sources as the way of the future because they are less expensive, cleaner, and less hazardous to human health and the environment.
He said: “This is the way of the future. This is the way of the world. Aside from climate change, we are also concerned about the health impacts of fossil fuels on the environment.”
In the coming years, the market for EVs in Nigeria is expected to grow significantly. Possible EVS, a leading electric vehicle company, plans to deploy 10,000 charging stations across the country in the next five years, enhancing convenience for EV owners and encouraging adoption. The company also aims to establish local manufacturing facilities, creating employment opportunities and stimulating economic growth. This will position Nigeria as a regional hub for EV production, creating export opportunities within Africa and beyond.
State of Rechargeable Devices in Nigeria
Many Nigerians rely on petrol and diesel generators to cope with power shortages. However, these are noisy, expensive, and environmentally harmful. Few people are gradually moving to installing solar inverters in their homes, which is quite expensive.
Entrepreneurs are developing new rechargeable solutions to address these challenges. For example, Reeddi offers rental services for compact solar-powered batteries called “Reeddi Capsules,” which can power various devices like TVs, laptops, and refrigerators.
Rechargeable batteries are widely available in Nigeria, with various brands and models available online and in physical stores. Different types of rechargeable batteries are available, including lead-acid, nickel-cadmium (Ni-Cd), nickel-metal hydride (NiMH), and lithium-ion (Li-ion) batteries.
Lead-acid batteries dominate due to their lower cost and established presence, while lithium-ion batteries are gaining ground despite higher initial costs. They are used in various applications, such as power backup systems, solar systems, and consumer electronics.
Efficient power backup systems, including rechargeable batteries, reduce the adverse effects of power interruptions and ensure a continuous and reliable power supply. Rechargeable batteries offer a reliable and sustainable energy storage solution, allowing for efficient use of backup power. They can be charged during periods of electricity availability and provide power when the grid fails, ensuring uninterrupted operations and activities.
Products like the Original EBL Rechargeable Batteries and Chargers offer up to 14 charging bays and can be used for various applications, including sound engineering, media houses, and photography. These batteries are designed to be strongly universal and can be used and recharged over 1500 cycles before replacement.
In terms of battery technology, Nigeria has the potential to develop its lithium-ion battery production, but several challenges remain. The country’s energy access deficit and reliance on diesel generators are significant hurdles. However, batteries are emerging as a competitive alternative to diesel generators, particularly in off-grid settings.
The widespread use of rechargeable batteries in Nigeria generates remarkable amounts of e-waste, including lithium-ion and lead-acid batteries, for energy storage. Improper disposal of these batteries poses environmental challenges and health risks.
Nigeria’s lack of adequate e-waste management and recycling infrastructure prevents the responsible disposal and recycling of used batteries, contributing to the environmental pollution and health hazards associated with improper battery disposal.
DeCharge in Nigeria
DeCharge is using blockchain technology to improve electric vehicle charging. As more and more people switch to electric vehicles, there’s a big need for convenient and dependable charging stations. DeCharge tackles this problem by creating a network of smart charging stations connected through the Solana blockchain.
The Decentralized Physical Interaction Network (DePIN) system makes finding a place to charge your EV easier and creates new ways for people to own stations and buy and sell charging services. This makes the process smoother for everyone involved, from EV drivers to businesses hosting stations and investors.
The DeCharge protocol is intended to function across any compatible hardware setup that follows the Open Charge Point Protocol (OCPP) global standards for EV charging infrastructure.
DeCharge is making EV charging a breeze with its user-friendly approach. The platform connects you to a giant network of charging stations powered by blockchain. You can find stations, reserve a spot to charge, and even pay for it through the app. Plus, you get rewarded with DeCharge tokens for using it. This clever use of blockchain makes charging your EV easier and more accessible than ever, which is exactly what Decharge offers.
Opportunities for DeCharge
Nigeria’s current energy landscape presents DeCharge with exciting opportunities to address challenges and transform the EV charging sector. DeCharge can empower communities plagued by unreliable grids — they facilitate financing, tokenization, and incentivization of rechargeable energy systems. Some opportunities available are;
Increasing fuel prices and awareness
The increasing fuel prices and awareness of the benefits of electric vehicles (EVs) in Nigeria present opportunities for Decharge in the EV market. Nigeria has been experiencing frequent fuel shortages, increasing prices, and worsening the cost-of-living crisis.
Fuel prices in Nigeria are highly volatile, influenced by global oil market fluctuations, exchange rates, and local supply and demand dynamics. The high and volatile fuel prices affect consumers, making them more receptive to alternative transportation options like EVs.
EVs offer cost savings compared to gasoline-powered vehicles, making them more attractive to consumers. The development of charging infrastructure can support the growth of the EV market by providing convenient and reliable charging options for consumers.
Government initiatives
Government initiatives and incentives play an important role in promoting the adoption of electric vehicles (EVs) in Nigeria. The National Automotive Design and Development Council (NADDC) has been actively promoting the development and adoption of EVs in Nigeria. It has acquired locally-assembled electric vehicles with charging infrastructure from Nigerian Jet Motors and is working on the Electric Vehicle.
There is a development plan to position Nigeria as a leading country in EVs. The plan aims to create a roadmap for developing and adopting EVs in Nigeria, including establishing charging infrastructure and developing local manufacturing capabilities.
Charging infrastructure development
One of the major challenges hindering the widespread adoption of EVs in Nigeria is the lack of adequate charging infrastructure. The lack of charging infrastructure presents an opportunity for investment and development in this area.
Developing a robust charging network will make it more convenient for EV owners to charge their vehicles, addressing one of the key barriers to adoption. An innovative blockchain-based platform like DeCharge can create a decentralized network of smart charging stations, making the charging process more efficient and accessible.
Environmental benefits
Growing awareness of environmental concerns, such as air pollution and climate change, drives interest in EVs as a cleaner and more sustainable alternative.
Electric vehicles produce zero tailpipe emissions, reducing greenhouse gas emissions and air pollution in urban areas. They are quieter than traditional gasoline-powered vehicles, reducing noise pollution in cities. Therefore, EVs have a lower carbon footprint and contribute to improved air quality by reducing emissions and pollutants in urban areas.
Strategies for Capturing Nigerian Market Share
Despite Nigeria’s unreliable power supply, it is difficult to charge EVs consistently. DeCharge developing EVs charging infrastructure in Nigeria will go a long way. Public awareness campaigns can educate consumers about the benefits of EVs and encourage their adoption.
DeCharge, with its innovative concept and Web3 integration, has the potential to disrupt the Nigerian EV market. Here’s a roadmap for DeCharge to penetrate this market.
1. Promoting off-grid solutions
In many rural and remote areas of Nigeria, access to the national grid is limited or non-existent. DeCharge can provide off-grid energy storage solutions paired with renewable energy sources to provide reliable power to these areas. This can improve the quality of life and economic opportunities for people in these regions.
Nigeria has significant solar energy resources, making it an ideal location for off-grid solar charging stations. These charging stations can reduce dependence on grid power, which is often unreliable in Nigeria. These charging stations can be installed in areas with poor electricity supply, increasing accessibility to electric vehicles.
Obviously, off-grid solar charging stations can be more expensive than traditional grid-connected charging stations. However, with adequate incentives and funding, it can be set up. Regular maintenance and proper battery management are also important for optimal performance.
Decharge’s tokenization of charging stations (RWA) allows for a new way to attract investment. This can accelerate the development of a wider off-grid charging network across the country. It also makes it easier and more profitable to set up charging stations.
2. Leveraging existing strengths
DeCharge can seamlessly integrate with Nigeria’s mobile money systems. This lets users conveniently pay for charging using DeCharge tokens directly within their familiar mobile money platform.
Mobile money is widely used in Nigeria, making it the preferred payment method for many Nigerians. Decharge’s integration will eliminate the need for a separate payment system, enabling wider adoption because users don’t have to learn a new way to pay.
DeCharge can empower local communities by enabling them to co-own and manage charging infrastructure through a model similar to Brooklyn Microgrid (community-owned renewable energy projects). This creates a sense of ownership and community involvement.
Community ownership can resonate well in Nigeria, where a strong community spirit exists. DeCharge can encourage local investment and participation in the EV revolution by allowing communities to co-own charging stations. Additionally, community-owned stations can be better maintained and managed, leading to a more sustainable network.
3. Building a strong foundation
Collaboration with energy companies can provide access to their grid expertise and existing infrastructure that can be adapted for charging solutions. Also, partnering with existing charging station operators allows Decharge to integrate its technology into their stations, expanding the reach of the network quickly.
Additionally, DeCharge can implement pilot projects in strategic locations. This will showcase the real-world functionality and benefits of Decharge’s Web3 technology. Successful pilot projects can generate positive publicity and build trust in DeCharge’s capabilities.
Educating Nigerians about DeCharge, Web3 technology, and the benefits of EVs is important for widespread adoption. Many Nigerians might not be familiar with these concepts. DeCharge can implement workshops and seminars, social media campaigns, and collaborate with influencers
Ensuring DeCharge adheres to all evolving regulations around cryptocurrencies and tokenized assets in Nigeria is essential to operate legally and avoid potential roadblocks. A strong foundation for DeCharge can increase user trust, accelerate growth, and ensure a sustainable ecosystem in the Nigerian market.
4. Energy storage solutions
To further solidify its position in the Nigerian EV market, DeCharge can provide energy storage systems to help manage the load on the electrical grid caused by EV charging stations. By storing energy during off-peak hours and releasing it during peak demand periods, these systems can reduce strain on the grid and prevent overloads.
These energy storage systems can support fast charging technologies, such as the Level 3 DC fast chargers used by Egoras Technology’s Egostation. It provides the high power output required for rapid charging, allowing EVs to charge up to 80% within 20 minutes. This capability can make EV charging more affordable and economically viable in the long run.
Key Takeaway
Nigeria’s energy landscape is at a crossroads, with a potential for renewable energy development despite existing challenges. The energy crisis has increased demand for alternative energy solutions, including pay-as-you-go solar systems. However, the cost of these systems has increased by over 50% in just two years due to currency devaluation and import challenges
As electric vehicles gain adoption in Nigeria, their batteries could be used as mobile charging sources for rechargeable devices through vehicle-to-device (V2D) charging. This could provide reliable charging, especially in areas with limited grid access.
While challenges remain, such as the need for infrastructure development and technical capacity building, the overall outlook for the rechargeable energy market in Nigeria is somewhat positive.
DeCharge can play a good role in transforming Nigeria’s energy landscape through advanced technologies such as blockchain and decentralized infrastructure. Thereby promoting sustainable energy practices and driving the adoption of electric vehicles.
The combination of government support, market demand, technological improvements, and international partnerships positions the sector for continued growth in the coming years
References
- Nigeria’s energy future https://www.shell.com.ng/energy-and-innovation/nigeriaenergyfuture.html
- Electricity an unending crisis https://thenationonlineng.net/electricity-an-unending-circus/
- Role of electric vehicles in Africa’s energy transition https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8886055/
- Regulatory framework for EV in Nigeria https://businessday.ng/news/legal-business/article/examining-the-legal-and-regulatory-framework-for-electric-vehicle-infrastructure-in-nigeria/
- Addressing energy poverty through renewable energy https://rean.org.ng/bridging-the-gap-addressing-energy-poverty-inequality-through-renewable-energy/
- Startup plans blockchain powered EV charging station https://punchng.com/startup-plans-blockchain-powered-ev-charging-station/
- DeCharge https://decharge.network/
