As Africa’s largest economy, Nigeria faces frequent power outages. On October 19, reports indicated that the West African country’s power grid experienced a major failure. Data from Nigeria’s System Operator Portal showed that the collapse began around 7 PM, with the grid reaching an unprecedented zero megawatts. This was the third grid collapse in the country within one week and the eighth this year, leaving parts of Nigeria with only 5-6 hours of stable daily power supply. High energy costs and limited access to fuel compound the challenges facing the Nigerian population.
Situated in the southeastern region of West Africa, Nigeria has a population exceeding 220 million, making up one-sixth of Africa’s total population. It is Africa’s most populous country and its leading oil exporter. Over the past decade, Nigeria has maintained a rapid 6.8% annual economic growth rate, overtaking South Africa in 2018 to become the continent's largest economy. However, the country’s rapid economic growth has outpaced its fragile power grid, resulting in frequent blackouts. In the last decade, Nigeria recorded nearly 140 power failures, with 46 occurring between 2017 and 2023, and around 10 more from 2022 to date.
Nigeria’s total installed generation capacity is estimated at 13.5 GW, with a peak demand of 8.25 GW, yet actual generation falls below 4 GW. To fully meet the needs of its 200 million citizens, Nigeria would require approximately 30 GW of generation capacity. Current power generation is 70% thermal and 30% hydropower, but much of this infrastructure is outdated, lacks essential maintenance, and suffers from limited gas supplies and widespread power theft. Due to the shortage of reliable power, over 97% of businesses, government offices, and public institutions in Nigeria rely on backup generators, with about 40% of Nigerians dependent on standby generators for electricity, according to the International Energy Agency (IEA). Resolving this power imbalance is thus critical for Nigeria’s economic progress.
In recent years, Nigeria has launched various policy measures aimed at accelerating the transition to renewable energy, with a strong focus on solar and energy storage to meet rising demand and address energy security challenges. This shift is intended to alleviate power shortages, lower electricity costs, and create a large market for energy storage solutions.
At the policy level, Nigeria's government initiated an Energy Transition Plan in August 2022 and passed a new Electricity Act in June 2023, decentralizing power generation and enabling local governments and private companies to invest. According to this transition plan, Nigeria aims to reach 250 GW of installed power capacity by 2050, with 90% coming from renewable energy. Additionally, the Nigeria Energy Commission and the International Renewable Energy Agency have outlined a “Renewable Energy Roadmap for Nigeria,” projecting utility-scale solar installations of 5 GW by 2030 and 25 GW by 2050. Nigeria’s “Green Vision 30:30:30” also sets a goal of deploying 30 GW of power by 2030, with 30% sourced from renewables.
As incentives, the Nigerian government has introduced a Feed-in Tariff (FiT) and Power Purchase Agreements (PPAs), ensuring solar system providers receive stable payments and attracting direct foreign investment. These measures have been effective. At the end of 2023, Nigeria partnered with Sun Africa to invest $2.2 billion in a 961 MW solar-plus-storage project. This project, with its substantial capacity, is expected to significantly improve Nigeria’s energy reliability, providing a solid foundation for economic growth.
Additionally, the Nigerian government offers subsidies to contracting firms in the power sector, with support from the World Bank over the past decade amounting to around $4.36 billion through ten loans. These funds are divided into two main subsidy types: one for companies installing off-grid solar systems for households and businesses, and another for those deploying solar microgrids in rural areas.
Nigeria has also implemented tax reliefs, reduced import tariffs on solar products, and other fiscal incentives to encourage private investment in solar projects. These measures help developers reduce financial burdens, increasing returns and drawing both domestic and international investors to large-scale solar projects. Moreover, with the recent elimination of fossil fuel subsidies in 2023, solar energy’s cost-effectiveness has made distributed solar projects even more attractive, spurring microgrid and small-scale solar development nationwide.
Market analysts project that, with the end of fossil fuel subsidies, Nigeria could add 1.6 GW of new solar capacity in 2024, potentially reaching 21.5 GW by 2030. The expansion of solar installations will inevitably drive increased demand for energy storage. Given its vast population base and growing energy needs, Nigeria holds immense potential in the energy storage market.
Experts believe that while South Africa currently leads Africa’s energy storage market, its growth is slowing due to market saturation and economic deceleration. Over the next two years, Nigeria is poised to emerge as a new driver for energy storage expansion in Africa.