Energy is crucial to Sustainable Development and poverty reduction because it influences all aspects of development. Achievement of the Millennium Development Goals (MDGs) is not possible, without an improvement in the quality and quantity of energy services. Sustainable Energy involves the provision of energy services in a sustainable manner, which in turn necessitates that energy services be provided for all people in ways that, now and in the future, are sufficient to provide the basic necessities, affordable, not detrimental to the environment, and acceptable to communities and people. Linkages between Sustainable Energy and factors such as efficiency and economic growth have been investigated.
The energy sector plays a pivotal role in attempts to achieve Sustainable Development, balancing economic and social developments with environmental protection. Energy is central to practically all aspects of Sustainable Development. Energy is central to the economy because it drives all economic activities. This characterisation of energy directs our attention to its sources in nature, to activities that convert and reconvert this energy, and finally to activities that use the energy to produce goods and services and household consumption. Traditionally, energy is treated as an intermediate input in the production process. This treatment of energy’s role understates its importance and contribution to development. All economic activities and processes require some form of energy. This effectively makes energy a critical primary factor of production. Given the state of technological advancement in the economy, capital and labour perform supporting roles in converting, directing, and amplifying energy to produce goods and services needed for growth and poverty reduction.
Energy services are essential ingredients of all three pillars of Sustainable Development, that is, economic, social, and environmental. Economies that have replaced human and animal labour with more convenient and efficient sources of energy and technology are also the ones that have grown fastest. No country in modern times has succeeded in substantially reducing poverty without adequately increasing the provision and use of energy to make material progress. Indeed, by not ensuring a minimum access to energy services for a broad segment of the population, economic development of developing countries such as Nigeria beyond the level of subsistence has proven to be a real challenge. At the national level, energy propels economic development by serving as the launch pad for industrial growth and, via transport and communications, providing access to international markets and trade. Reliable, efficient, and competitively priced energy supplies also attract foreign investment, which is a very important factor in boosting economic growth in recent times. At the local level, energy facilitates economic development by improving productivity and enabling local income generation through improved agricultural development (irrigation, crop processing, storage, and transport to market) and through non-farm employment, including micro-enterprise development. As an indicator of local recognition of the importance of energy for businesses, Nigerian manufacturers, who were asked to rank the constraints on their firms’ activities, identified power breakdowns, and voltage fluctuations as their top two problems. Recent developments in Ghana’s energy sector support this point.
Energy has also strong and important links to the environment. Many energy sources are drawn directly from the environment, requiring a sound management for these sources to be sustainable. Furthermore, energy use affects the environment. Emissions from fossil fuels, for example, reach beyond the local and national levels to affect the global environment and contribute to climate change. The poorest people often live in the most ecologically sensitive and vulnerable physical locations. These areas may be the most affected by the predictable effects of climate change such as an increased frequency of extreme events, for example floods, drought, rising sea levels, and melting ice caps. The risks facing poor people are often increased by the unsustainable use of biomass resources.
The connection between Energy, the Environment and Sustainable Development is worth highlighting. Energy supply and use are related to climate change as well as such environmental concerns as air pollution, ozone depletion, forest destruction, and emissions of radioactive substances. These issues must be addressed if society is to develop while maintaining a healthy and clean environment. Ideally, a society seeking Sustainable Development should use only energy resources which have no environmental impact. However, since all energy resources lead to some environmental impact, an improved efficiency and environmental stewardship can help overcome many of the concerns regarding the limitations imposed on Sustainable Development by environmental emissions and their negative impacts. Energy is directly linked to the broader concept of sustainability and affects most of civilisation. That is particularly evident since energy resources drive much, if not most of the world’s economic activity, in virtually all economic sectors. Also, energy resources, whether carbon-based or renewable, are obtained from the environment, and wastes from energy processes (production, transport, storage and utilisation) are typically released to the environment. Given the intricate ties between energy and the key components of Sustainable Development, the attainment of energy sustainability is being increasingly recognised as a critical aspect of achieving Sustainable Development.
Use of renewable natural resources, combined with efficient supply and use of fossil fuels with cleaner technologies, can help reduce the environmental effects of energy use and help Nigeria in replacing the existing, inefficient fossil fuel technologies that pollute the environment. As a complementary measure, careful management of energy resources is important to promote economic growth, protect ecosystems and provide sustainable natural resources. Thus, energy sustainability is considered to involve the sustainable use of energy in the overall energy system. This system includes processes and technologies for the harvesting of energy sources, their conversion to useful energy forms, to provide energy services such as operating communications systems, lighting buildings, and cooking.
The reform of the energy sector is critical to Sustainable Development in Nigeria. This includes reviewing and reforming subsidies, establishing credible regulatory frameworks, developing policy environments through regulatory interventions, and creating market-based approaches such as emission trading. Globally, countries are developing strategies and policies to enable a Sustainable Development of their energy resources, thus contributing to fuel economic and social developments, while reducing air pollution and greenhouse gas emissions. The energy sector is very strategic to the development of the Nigerian economy. In addition to its macroeconomic importance, it has major roles to play in reducing poverty, improving productivity, and enhancing the general quality of life. If Nigeria is to take the path of Sustainable Energy, it is important to accurately and technically model the energy demand and supply scenarios and their impacts on the economy, resources, and society along with the environment, for both medium and long terms. From such analyses, Nigeria can derive information that is vital for policy construction and investment.
There are three widely recommended market policy options to promote Renewable Energy in the marketplace. Firstly, price-based feed-in laws, which require mandatory purchase of Renewable Energy at a fixed price. Secondly, quantity-based Renewable Energy Portfolio Standards (“RPS”), which require a minimum share of power or a minimum level of installed capacity in a given region is met by renewable energy. Thirdly, tendering mechanisms, which involves government-sponsored competitive bidding processes for the acquisition of renewable electricity whereby long-term contracts are awarded to lowest priced projects. All these three mandated market policies ensure the right for the Renewable Energy power suppliers to recover incremental costs between Renewable Energy and conventional energy from consumers and to connect to the grid. Each approach has its own advantages and disadvantages. Xiaodong Wang has noted thus:
Feed-in laws produce high penetration rates in a short period, create local manufacturing opportunities, provide strong incentives for private investments, and can be cost effective if the tariff is periodically and wisely adjusted. To date, feed-in laws demonstrate the highest installation rates for RE and are considered most desirable by investors given their price certainty.
Nigeria has Regulations on Feed-In Tariff for Renewable Energy Sourced Electricity in Nigeria.The Regulations are made by the NERC in exercise of the powers to make regulations under section 32(1) and 96 of the EPSRA 2005 with effect from December 8, 2015 to supersede the Multi-Year Tariff Order (MYTO) II (2012-2017). The overarching aim of the Regulations is to stimulate investment in Nigeria’s vast and mostly untapped Renewable Energy potentials. The regulation states:
The provisions of these regulations shall apply to all qualifying renewable energy sourced electricity of capacity above 1MW and smaller than 30MW at a site that is connected to the transmission grid or the distribution networks. For large renewable (30MW above) integrated resource planning will be carried out before the NERC will initiate a competitive bid process.
The effect of a well-established FiT system in Nigeria is significant since it will immediately see an uptake of solar systems not necessarily to reduce electricity expenditures but as a means of revenue generation by individuals and households from the government. This will result in a massive boost in the power generation capacity of Nigeria. However, the downside is the country’s inability to transmit power beyond 7,000MW. This is due to the fact that the current transmission capacity of the country is dilapidated and will immediately upon transmission of 7,000Mw lead to systemic collapse plunging the entire country into darkness. On the other hand, the government and utility companies will increase energy generation, achieve a diversified energy mix and move towards a cleaner society.
A society seeking Sustainable Development ideally must utilise only energy resources which cause no environmental impact, such as harmful emissions to the environment. However, since all energy resources lead to some environmental impact, improved efficiency and environmental stewardship can help overcome many of the concerns regarding the limitations imposed on Sustainable Development by energy emissions and their negative impacts.
Suggested Further Reading:
World Commission on Environment and Development, Our Common Future (Oxford: Oxford University Press, 1987) p. 43.
Konrad Prandecki “Theoretical Aspects of Sustainable Energy” (2014) 2 Energy and Environmental Engineering, pp. 83-90.
Marc A. Rosen, “Energy Sustainability: A Pragmatic Approach and Illustrations” (2009) 1 Sustainability, pp. 55-80 at 56.
Junxia Liu “China’s renewable energy law and policy: A critical review” (2019) 99 Renewable and Sustainable Energy Reviews, pp. 212-219.
Renewable Energy Law the People’s Republic of China adopted at the 14 the meeting of the Standing Committee of the 10 the National People’s Congress on February 28, 2005.
Sunday Olayinka Oyedepo “On Energy for Sustainable Development in Nigeria” (2012) 16 Renewable and Sustainable Energy Reviews, 2583– 2598.
Energy Commission of Nigeria, Renewable Energy Masterplan, (Kaduna: Shukrah Printers, 2005).
Marc A. Rosen “Towards Energy Sustainability: A Quest of Global Proportions” (2015) 1 Forum on Public Policy,
Energy Commission of Nigeria, National Energy Masterplan (2007).
Federal Ministry of Environment, Nigeria Renewable Energy Master Plan (REMP) 2006.
Energy Commission of Nigeria, National Energy Policy, pp. 1-34.
World Economic Forum, “Why Energy Efficiency is Key to Sustainable Development” at
Fortune Ganda & Collins C. Ngwakwe “Role of Energy Efficiency on Sustainable Development” (2014) 5 Environmental Economics, 86 – 99 at 88.
Benjamin K. Sovacool & David Jacobs, Powering the Green Economy: The Feed-in Tariff Handbook, (World Future Council, 2012).
M. Meyer-Renschhausen, “Evaluation of Feed-in Tariff Schemes in African Countries” (2013) 24 J. energy South. Afr.
Benjamin K. Sovacool & David Jacobs, Powering the Green Economy: The Feed-in Tariff Handbook, World Future Council, 2012.
Xiaodong Wang, “Legal and Policy Frameworks for Renewable Energy to Mitigate Climate Change” (2007) 7 Sustainable Development Law & Policy, p. 19.
Michael Dugeri is a Lagos-based Legal Practitioner with specialties in Energy Law, Employment and Capital Markets.