Is natural gas a viable option to promote electrification in Nigeria?
Gifted with vast reserves of oil and natural gas, Nigeria is a country with a low level of electrification but a rapidly rising demand. This invites the question of whether domestic natural gas can be leveraged to facilitate full electrification in Nigeria. The authors contend that, while in principle natural gas is a solution to the problem of electrification, in practice there are constraints, in the gas industry specifically and in the general power sector, to the use of gas for electrification in Nigeria. The gas-industry-specific constraints are the lack of an independent downstream regulatory regime and poor geographical coverage of transportation pipelines. Even when such constraints are resolved, and gas is readily available for use in power generation, electrification is inhibited by the failure of power sector reform to encourage the participation of private capital in financing new generation capacity, an unstable transmission network, and a liquidity crisis in the power sector due to high energy loss, exacerbated by non-cost-reflective tariffs and irregular bill collection.
Peng, D. and Poudineh, R. (2018). ‘Is natural gas a viable option to promote electrification in Nigeria?’ Economics of Energy & Environmental Policy, 8(1), 1–18.