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Developing an Institutional Framework for the Energy Efficiency Act and Regulations targeting energy intensive sectors (household and industries) in Nigeria

Nigeria power sector
This technical assistance advances the following Sustainable Development Goals:

Affordable and clean energy

CTCN
Goal7
Name:
Affordable and clean energy

Decent work and economic growth

CTCN
Goal8
Name:
Decent work and economic growth

Industry, innovation and infrastructure

CTCN
Goal9
Name:
Industry, innovation and infrastructure

Climate action

CTCN
Goal13
Name:
Climate action

Context

Nigeria is the largest economy in sub-Saharan Africa, but power sector limitations are constraining further economic development. Being endowed with large oil, gas, hydro and solar resources, the government has the potential to generate more than 12,500 MW of electric power from existing plants, but on most days it is only able to generate around 4,000 MW due to the unavailability of gas, breakdowns, water shortage and grid constraints that result in frequent electricity outages. The average Nigerian firm claims outage related losses equivalent to more than 4% of sales. According to the World Bank’s projection, electricity demand is expected to grow by a factor of 5 until 2035, to almost 530 TWh, which will exacerbate the existing challenges.

The government has therefore prioritized energy generation, transmission and consumption efficiency as key actions in its Nationally Determined Contributions (NDCs), as there is a need to formulate and implement energy efficiency programs in various sectors to reduce power shortage and also increase the competitiveness of the industrial sector by reducing energy intensity per unit product. Nationally coordinated energy efficiency measures are not yet in place, although several policies exist, and research has been conducted on energy conservation and efficiency, the promotion of energy efficient appliances and light bulbs, and on improved cookstove performance.

Energy efficiency is important in addressing energy insecurity and meeting present and future energy demands. However, the overarching barrier that must be overcome is the complexity of introducing energy sector reforms across industry, commerce and transport, where activities are highly fragmented.

CTCN Support

The objective is to develop a harmonized framework of regulations that instigate adoption and  implementation of energy efficient technologies and practices in the industrial, commercial and transport sectors. The technical assistance will also support the development of an institutional structure to monitor and report on activities undertaken toward compliance with the regulations.

Anticipated activities include:

  • Review and analysis of existing energy consumption data, identification of existing regulations and policies that regulate energy use, and the development of a framework for the Energy Efficiency Act (EEA) and regulations;
  • Development of a methodology to help identify and classify the industrial and household sectors and sub-sectors under the purview of the framework;
  • Development of the EEA framework, including a curriculum and training modules for energy auditors and managers; and
  • Proposal for an institutional structure for monitoring and reporting.

Expected Impact

The developed harmonized framework of regulations will facilitate the adoption and implementation of energy efficient technologies and practices in the industrial and household sectors, bolstered by a monitoring and evaluation framework to track compliance.

This project will contribute to the achievement of Nigeria’s NDC, which prioritizes an economy-wide energy efficiency as a key mitigation measure, with a potential GHG reduction of 179 million tonnes per year in 2030. Nigeria has specifically targeted energy efficiency to reduce overall energy demand and increase the efficiency of existing vehicles and the transport system.

The process to develop the framework will consider the role of gender in all decision-making and ensure equitable consultation and representation in the process. The framework will be designed based on a gender-differentiated understanding of opportunities and constraints to optimize social and climate impact.

    Date of submission:
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    Phase:
    Design