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Introduction
Renewable energy supplies in a developing economy, Nigeria is considered one of the energy-rich country in the world. Nigeria is rated among the top Oil Producer in Africa, second in natural gas reserve (with an estimate of 176trillion cubic feet) and an estimated 2 billion metric tonnes of coal. (UNDP, 2012) Nigeria is also rich in water, wind and sun energy from which appreciable electricity can be generated. With the abundance of energy resources, Nigeria need not import energy to achieve a sustainable generating capacity suffices the targeted economic growth and also has an excess generation to sell to neighbouring countries. Nigerian electricity crisis i.e. the increase in demand of electricity along with the increase in population with no significant plan of how to resolve the energy crisis, lead to Nigerian Electricity Power Policy.
The policy mainly called for privatisation of the energy sector, but it was not signed until 2005. After the privatisation of the sector in 2005, there has been a call for reforms that led to the introduction of the idea of utilisation of renewable energy resources to solve the electricity crisis. Since the privatisation of the energy sector, there have been drastic reforms in the Nigerian energy sector that are depicted in the image below:
The research will focus on how the utilisation of the renewable energy resources will impact Nigeria and will also provide knowledge about how it can impact all developing economies similar to Nigeria. The purpose of the research is to analyse the effect of energy transformation on developing economies such as Nigeria. The main reason for the research is to interpret how feasible is the idea of utilising renewable energy resources is for developing economies.
Background and Context:
World economies are progressing at a rapid rate and hundreds and thousands of people enjoy major improvements in the economies. The energy sector is one of the most crucial sectors of the economies; in fact, it would not be wrong to say that energy is the fuel of an economy. Thus, this research deals with the important objective of analysing the major changes in the energy sector and its impacts. With the introduction of renewable energy sources i.e. solar energy and geo energy it is important to analyse and predict its impact of developed and developing world.“Although renewable energy sources will help in reducing the problems of an energy crisis, renewable energy supplies in a developing economy the process is extremely complex and expensive.”
The continuous economic development globally increases the need to focus on the role of energy in economic growth. Energy industry of an economy is important for the steady growth of an economy. Energy can be considered as a fuel to an economy. The importance of energy for an economy is put in following words by Peter Voser, “The economic progress of past decades has seen hundreds of millions of people enjoy major improvements in their material well-being, and these changes have been particularly noteworthy in the emerging economies” (Voser, 2012).“The major focus globally is usually on globalisation and market liberalization, but it is important to not undermine the important role that energy plays in the economic growth of a country.”
Considering the importance of energy sector, and crucial role of energy resources in economic growth, the research focuses on transformation in the energy markets and its impact on future renewable energy supplies in a developing economies i.e. Nigeria. It is important to understand that resource development and growth because of energy is only possible if there is availability of resources. If a country faces any constraints such as fiscal, regulatory, scarcity then it can lead to a poor economic growth. With the constant development globally, not only market structures, economies and trade patterns have changed, but the energy sector is constantly developing.
Currently the energy sector depends mostly on traditional energy sources however the push for growth and innovation in the energy sector, especially renewable sector will alter the degree of the dependency. (Voser, 2012)
In order to understand the importance of this research and how renewable energy is going to impact developing economies, it is important to understand the development in renewable energy sector. According to a global status report 2011, renewable energy delivers 20% of global electricity, 80% of hydropower is renewable power and 16% of global power is renewable energy. (National Planning Commission, 2011)
United Nations Development program is planning to launch a renewable energy development program in Nigeria. The program will focus on promoting clean technologies and renewable energy in the country. According to a research Nigeria is endowed with sufficient energy resources to meet its development requirement, renewable energy supplies in a developing economy thus United Nations program will help in building the economy. The following graphs utilisation of energy resources and their estimated reserve in Nigeria.
As mentioned earlier according to research Nigeria has enough reserves to fulfil her economic needs. However some research show that in order for the project to be success investments from private sector are required. Thus, some experts might argue the idea of the development of renewable energy sources might not be very feasible for developing economies because it is usually hard to attract private investors. However in Nigeria’s case as mentioned earlier, there are enough reserves to fulfil economic needs (KPMG 2013). Thus the presence of resources and the opportunity to gain lucrative profits will attract investments. (KPMG, 2013)The purpose of the research is to analyse the effect of energy transformation on developing economies such as Nigeria. renewable energy supplies in a developing economy The main reason for the research is to interpret how feasible is the idea of utilising renewable energy resources is for developing economies.
The research will help in answering the question of feasibility of the utilisation of renewable resources in developing world. Moreover it might also help in analysing how successful Nigeria’s renewable energy source program will be and how will it affect the economy.
Research Question:
How is transformation in the energy sector going to impact future renewable energy supplies to developing economies i.e. Nigeria?
Objective
The objective of the research is to highlight the transformation in energy markets and to understand how growth and innovation in the energy sector, specially development of renewable energy resources going to affect supply of resources to developing economies i.e. Nigeria.
Research Gap
The research is focused on finding the impact of transformations occurring right now in developed world on developing world in future. One of the methodologies proposed is analysis of the existing literature on Nigerian economy and energy sector and how the transformation in energy sector will affect the future supplies of energy in Nigeria. However, renewable energy supplies in a developing economy Nigeria adopted the renewable energy resources very recently and there is not enough literature on Nigerian renewable energy sector. The lack of sufficient literature and research results from past can be considered as a research gap. However that gap can be easily bridged by utilising the resources from other economies that are similar to Nigeria and adopted successful renewable energy methods.
The outcome of the proposed research can help in understanding the future of developing economies in terms of supply of renewable energy. Moreover, it will not only show how developing economies will be affected by the shift to renewable energy sector but also provide an overview of how the energy sector is going to evolve in the near future.
Approach and Methodology:
The research is focusing on supply of renewable energy in Nigeria, and the supply can be affected by many factors i.e. investment, resources etc.In order to have accurate results and presentation different techniques will be used, research from already existing literature, creating new literature, analysis of current economic conditions and forecasting future economic conditions is important.
Following are the techniques employed in the research:
• Qualitative research
• Quantitative research
• Representational models
• Data envelopment analysis
• Multi-criteria analysis
The main techniques used in the research will focus on analysis of dynamics of changes in the energy sector. The research will employ different indicators to analyse the effect of energy transformation, renewable energy supplies in a developing economy mainly it is going to focus on the current situation of Nigeria’s economy, percentage of renewable reserves in Nigeria and how global transformation can affect those reserves. Research will analyse economic, environmental and political factors affecting the energy sector.
Approach
The approach of the research will be slightly complex because the research will follow different approaches to reach the results. Ones of the main approaches that will be used is the EURENDEL approach. The EURENDEL approach was employed in Europe to analyse the needs of the future energy systems. The purpose of the research is to analyse the impact of transformation in energy sector on developing economies, in order to do so, it is important to look not only at energy but technological potentials and societal demands as well. The research will start with background research, research on current situation of Nigerian economy, current situation of energy reserves and based on societal demands and change in the economies. All these factors and analysis of current development models such as UNDP’s renewable energy development program will help in analysing the impact of transformation in energy sector on Nigeria.
The research is mainly focused on different factors that can affect energy sector of the economy and how development and transformation in the sector can impact the future of the economy. Since, the research is focused not only on developing countries i.e. Nigeria but also on transformation in the energy sector globally. Since the idea is to analyse the impact of transformation in the energy sector globally on the developing world. Thus, it will be focused not only on Nigeria but other economies mainly developed ones as well.
Scope and Limitations
The research will help in analysing the effects of transformation of energy sector not only in developing countries i.e. Nigeria but also on the developed world. Since the research is focusing on the how the energy sector is evolving globally and how that global phenomenon can affect the developing world. The methodology used in the result and the results cannot only be used in research on Nigeria but in any other developing country. It will provide a framework for research in energy sector especially for economies that are similar to Nigeria. The methodology employed in research depend on existing data, however one of the limitation in the research might be lack of sufficient data on Nigeria’s renewable sector. Moreover, the research is focused on how renewable energy supplied is going to be changed in future. The results will be predicted results but they might not be completely accurate because several external factors affect the energy sector greatly and those variables can also affect the results of the research. One of the examples can be impact of environmental changes on the energy supplies, some environmental changes are not foreseen hence their affects can also not be predicted, thus the research cannot take into account those factors.
Chapters Summary
Introduction:
Nigerian electricity crisis lead to a call for reforms in the energy sector of Nigeria. Reforms started in the form of changes in the administration and in 2005 18 sectors of Nigerian energy sector were privatised. (KPMG 2013) After the privatisation several reforms were introduced to solve the energy crisis and the biggest one is the utilisation of the renewable energy resources in order to solve the electricity crisis. Recently the United Nations Development Program also introduced a plan to develop clean and renewable energy sources in Nigeria, the main objective of the program is to develop the energy sector and solve the energy crisis. However, research shows that in order for the project to be success investments from private sector are required (UNDP). Thus the research will analyse how factors i.e. investment can affect the supply of renewable energy in Nigeria.
Research Question:
How is transformation in the energy sector going to impact future renewable energy supplies to developing economies i.e. Nigeria?
Objective
“The objective of the research is to highlight the transformation in energy markets and to understand how growth and innovation in the energy sector, specially development of renewable energy resources going to affect supply of resources to developing economies i.e. Nigeria.”
Nigeria Energy Sector
“Nigeria is one the energy rich countries in the world. In Africa, Nigeria has been rated among top oil producer, second in natural gas reserve and with an estimated 2 billion metric tonnes of coal.”Nigeria is not only rich in natural resources but also in renewable energy resources such as win, sun and water. The abundance of the energy resources in Nigeria causes Nigeria to be a self-sustainable economy in terms of the energy resources and generating capacities; if the resources are used efficiently. (UNDP,2012)”
This chapter will contain the in depth review of the Nigerian energy sector, mainly focusing on the renewable energy resources, how they are being utilised now and how the current utilisation and production will impact the supply in future.
Nigeria Reforms in the Energy Sector
Nigerian electricity crisis i.e. the increase in demand of electricity along with increase in population with no significant plan of how to resolve the energy crisis, lead to Nigerian Electricity Power Policy. The policy mainly called for privatisation of the energy sector, but it was not signed until 2005. After the privatisation of the sector in 2005, there has been a call for reforms that led to the introduction of the idea of utilisation of renewable energy resources to solve the electricity crisis. (KPMG, 2013)
This chapter will contain the in depth review of the reforms in the energy sector, one of the main focus will be on the reforms in production of electricity because renewable energy in Nigeria is mainly used to produce electricity.
Challenges in the Reforms Process
Following are the few of the challenges described by the government in reform process:
1. Limited access to infrastructure.
2. Inadequate power generating capacity
3. Inefficient usage capacity
4. Lack of capital for investment
5. Ineffective regulation
6. High technical losses and vandalism
7. Insufficient transmission and distribution facilities
8. Inefficient use of electricity by consumers
9. Inappropriate industries and market structure
10. Unclear description of roles and responsibilities.
(NEP, 2003)
Introduction of Renewable Energy to Resolve Energy Crisis
This chapter will present how renewable energy was introduced in Nigeria and how is it helping in resolving the energy crisis.
Feasibility of the Proposed Solution
This chapter will mainly deal with the analysis of efficiency in generating electricity by using renewable energy resources, and on analysing how all of the factors above will affect the supply in the future.
Future of Renewable Energy in Nigeria
After the Analysis of all the factors mentioned above, this chapter will predict the future of renewable energy resources in Nigeria.
Conclusion
Nigeria has enough reserves to fulfil her economic needs. However some research show that in order for the project to be success investments from private sector are required. Thus, some experts might argue the idea of the development of renewable energy sources might not be very feasible for developing economies because it is usually hard to attract private investors. However in Nigeria’s case as mentioned earlier, there are enough reserves to fulfil economic needs (KPMG 2013). Thus the presence of resources and the opportunity to gain lucrative profits will attract investments. The purpose of the research is to analyse the effect of energy transformation on developing economies such as Nigeria. The main reason for the research is to interpret how feasible is the idea of utilising renewable energy resources is for developing economies…
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