Nigerian Energy Transition: A Pathway to Economic Diversification and Sustainable Ocean Use—By Capt Emmanuel Ihenacho

APAPER DELIVERED AT THE IMO’S WORLD MARITIME DAY CELEBRATION LAGOS 25/9/25

By: Capt. Emmanuel Ihenacho

Introduction

Nigeria’s economy has long been dominated by the oil and gas industry. The output of this focused industrial activity has contributed significantly to the country’s GDP and government revenue growth. However, the volatility of global oil prices, the depletion of oil reserves, and the growing concern about climate change has created an imperative for Nigeria to diversify its economy and transition to a more sustainable energy mix. This paper explores the opportunities and challenges of Nigeria’s energy transition, with a focus on economic diversification and sustainable ocean use effects there from.

Nigeria’s Energy Landscape

Nigeria’s energy sector is characterized by a heavy reliance on fossil fuels, particularly oil and gas. However, in addition to the abundance of fossil fuel deposits, the country also has significant potentials for renewable energy development, including solar, wind, hydro, biomass and geothermal energy opportunities.

Realizing this fact, the Nigerian government has promulgated a dedicated plan, in the context of which it set ambitious targets to increase the proportion of renewable energy in the overall national energy mix, thereby reducing greenhouse gas emissions in its domestic and industrial applications.

There is a National Renewable Energy Action Plan (NREAP) currently articulated which aims to increase economic competitiveness and sustainable development in power utilization, minimizing negative environmental impacts and guaranteeing energy security and access.
NREAP currently targets 30% of Nigeria’s energy mix to come from renewable sources by the year 2030. Specific energy generation and utility milestones are set for solar, wind, biomass and hydroelectric power. It is an element of the plan to add 5000 MW of renewables to the national grid by 2030,
This proposal for energy transition is critical for Nigeria’s economic development and environmental sustainability.

IMPERATIVES FOR ENERGY TRANSITION

Economic Diversification In regard to the objectives of enabling overall risk reduction through economic diversification+, the proposed energy transition can contribute to Nigeria’s economic diversification in several ways:

–-Reducing dependence on oil and gas:

By co-opting policies for substituting renewables for fossil fuel energy in its industrial applications, Nigeria can mitigate the cost of its developmental and everyday risks through diversification. This risk mitigation will occur as any incidental downside risk manifesting in the one industry may be counter balanced by an opposing counter event occurring in the other. As a result of such energy source diversification therefore, the country would no longer be so critically exposed in the event of say, a grid collapse, occurring in the primary power supply networks.

–Creating jobs:

Arising from the ability to initiate the energy transition process, the renewable energy sector can be the source of new and specific job opportunities in the manufacturing, installation, and maintenance of renewable power infrastructure and equipment.

This effect is particularly apparent in the domestic and household electricity supply sector where a booming and growing business is currently taking hold in the production, installation, maintenance and trade in domestic solar power supply infrastructure.

–Stimulating innovation: The energy transition can also drive innovation and entrepreneurship in Nigeria, particularly in the development of new technologies and business models.

– Increasing economic resilience: By diversifying its Energy supply source, Nigeria can reduce its vulnerability to external shocks and increase its economic resilience.

Sustainable Ocean Use

Nigeria’s ocean resources are critical to its economy, but the impact of unsustainable practices such as unregulated overfishing and the dumping of harmful effluents at sea can harm the environment and threaten livelihoods. In this case, the energy transition process can promote ocean use sustainability by:

– Reducing pollution: Recourse to the use of renewable energy as the first choice in the national energy mix can reduce pollution arising from fossil fuels exploration thereby protecting integral marine ecosystems such as coral reefs etc.

– Promoting sustainable fishing: By reducing the impact of energy production on marine ecosystems, Nigeria can promote sustainable fishing practices and protect the livelihoods of fishing communities.

– Supporting blue economy: The energy transition can support the development of a blue economy in Nigeria, where ocean resources are used sustainably to drive economic growth.

– Protecting coastal ecosystems: Renewable energy can help reduce the impact of climate change on coastal ecosystems, including mangroves and coral reefs.

Opportunities for Renewable Energy applications Nigeria has significant potentials for renewable energy development, particularly in:

– Solar energy: Nigeria has abundant solar resources, making it an ideal location for solar energy development.

– Wind energy: Nigeria’s coastal regions have significant wind resources, which can be harnessed for electricity generation.

– Hydro energy: Nigeria has several rivers and waterways that can be used for hydroelectric power generation.

– Other opportunities: Nigeria can also explore other renewable energy sources, such as biomass and geothermal energy.

Challenges and Opportunities

The energy transition in Nigeria faces several challenges, including:

– Infrastructure: Nigeria’s energy infrastructure is relatively underdeveloped, making it difficult to integrate renewable energy sources into the national grid seamlessly.

– Policy and regulation: Nigeria needs to develop appropriate policies and regulations that support the development of renewable energy and sustainable ocean use.

– Financing: The energy transition requires significant investment, and Nigeria needs to attract financing from domestic and international sources.

– Capacity building: Nigeria needs to build capacity in the renewable energy sector, including training and education programs to promote general familiarity with the process and technical concepts of the renewable technology.

Relevant Case Studies

Several countries have successfully transitioned to renewable energy and promoted sustainable ocean use. Nigeria can learn from these examples and adapt best practices to its own context. Some examples include:

– Costa Rica’s renewable energy transition: Costa Rica has made significant effort and progress in transitioning to renewable energy, with over 90% of its electricity coming from hydroelectric power. The country targets 100% renewable power penetration by 2030.

– Denmark’s wind energy industry: Denmark has developed a thriving wind energy industry, with wind power accounting for over 40% of its electricity production in the country.

– The blue economy in Seychelles: Seychelles has made significant progress in developing a blue economy based on a transition to renewable energy, witha focus on sustainable fishing and tourism.

Policy Recommendations

To support the energy transition and sustainable ocean use, Nigeria needs to develop policies and regulations that: Promote renewable energy development: Nigeria needs to develop policies that support the development of renewable energy, including fiscal incentives such as tax and subsidies. Encourage sustainable ocean use: Nigeria needs to develop policies that promote sustainable ocean use, including regulations to protect marine ecosystems.

Attract financing: Nigeria needs to attract financing from domestic and international sources to support the energy transition.

Build capacity: Nigeria needs to build capacity in the Renewable energy sector, including training and education programs.

Implementation Roadmap To achieve the envisaged energy transition and sustainable ocean use, Nigeria needs to develop an implementation roadmap that:

Sets clear targets: Nigeria needs to set clear and measurable targets in respect of its energy transition and ocean use sustainability proposals as follows:

Nigeria’s energy transition implementation roadmap requires clear targets to achieve its goals. Based on available information from knowledgeable energy industry and economic sources, here are some potential targets:

Renewable Energy Capacity: Nigeria aims to add 5,000MW of renewable energy to its national grid by 2030, with a potential market opportunity of over 20 GW in the next 10 years.

Renewable Energy Mix: The country targets 30% of its Energy mix to come from renewable sources by 2030, with some proposals suggesting a more ambitious target of 50% by 2030.

Energy Access: Nigeria’s Energy Transition Plan (ETP) aims to deliver electricity to 300 million Africans by 2030 through the Mission 300 initiative. Net Zero Emissions: The country has set a goa! to achieve net zero emissions by 2060, with a financing need of over $410 billion.

As Nigeria navigates the complexities of climate change, economic diversification, and sustainable development, a well planned energy transition is crucial.

– Nigeria has vast renewable energy resources, including solar, wind, and hydro power, which can reduce dependence on fossil fuels and promote sustainable development.

– A transition to renewable energy can drive economic diversification, create new industries, and stimulate job growth.

Nigeria’s ocean resources offer significant opportunities for sustainable development, including offshore wind, marine conservation, and eco tourism.

Develop a comprehensive energy transition plan which Integrates renewable energy, economic diversification, and sustamable ocean use into a cohesive strategic development proposition for the nation.

– Enhance policy and regulatory frameworks, strengthening institutions and regulations to support renewable energy development and sustainable ocean use.

– Foster international cooperation and collaboration with international partners to access financing, technology, and expertise.

Conclusion:

Nigeria’s energy transition presents a unique opportunity to drive economic diversification, promote sustainable development, and protect the country’s rich ocean resources.
By leveraging renewable energy potentials, promoting sustainable ocean use, and addressing challenges, Nigeria can create a more resilient and prosperous future.