Nigeria, Africa’s largest economy and most populous country, continues to face numerous bottlenecks in its power sector that limit national growth and development. Constrained power transmission capacity accompanies large supply deficits; high aggregate technical, commercial, and collection (ATC&C) losses; non-cost reflective tariffs; and low revenue collections. These factors limit the ability of electricity distribution companies (DisCos) to cover operational costs and prevent them from funding distribution infrastructure upgrades. The vicious cycle of debt and weakening infrastructure inhibits electricity distribution companies from adequately serving their customers with the reliable and affordable electricity they need to power their homes and businesses.

Utility-enabled distributed energy resources (DERs) provide a unique opportunity to address the persistent challenges of power availability and reliability in Nigeria. Leveraging the momentum generated by initial “first-wave” projects, this strategic roadmap shows that a more than 20 GW market opportunity is possible with the rapid expansion of utility-enabled DERs across Nigeria over the next 10 years. This roadmap recommends solutions to address challenges encountered by distribution companies (DisCos) and developers in reaching this scale. It suggests a massive investment opportunity for distributed solar PV, batteries, and gas technologies that offer clear tangible benefits for DisCos, project developers, and end-users:

• Each DisCo can increase its revenue by an average of over ~US$50 million every year over the next decade.
• DisCos can reduce ATC&C losses by up to 20 percent across their respective territories.
• Customers can save up to 25 percent on their energy costs by displacing existing diesel and gas generators.
• Project developers can charge cost-reflective tariffs, supporting commercial viability.
• Carbon pollution can be reduced by about 33 million tons per year, approximately 8% of Nigeria’s total 2022 emissions.

The Roadmap offers guidance for Nigerian DisCos to meet their strategic goals and calls for stronger collaboration by developers, investors, and stakeholders to accelerate project deployment. It describes utility-enabled DER business models and outlines key lessons learned from the implementation of the first wave of projects. Based on an assessment of five DisCos, the roadmap quantifies the market potential of utility-enabled DERs over the next decade, including a breakdown of technology needed year by year to close DisCo supply gaps. Finally, the roadmap introduces and describes four priority areas and provides action-oriented recommendations for each priority area to achieve the DER opportunity.