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Feed-in Tariff design for Renewable Energy Utilization in Nigeria's Electricity Generation Fuel Mix
no.28 | Presentation | 2012-11-27
Presenter : Habib Nuhu and Eunnyeong Heo
Abstract Renewable energies have received increased attention among developed and developing countries for electricity generation. This is mainly in response to quest for energy security fuelled by growing depletion of fossil fuel and their associated negative externalities. Feed-in tariff have in this regards been one of the most widely adopted policy intervention that stimulated renewable energies production frontier and mass deployment around the world. However, Nigeria is lagging behind in this global response. Even though there exist strategic policy for renewable energy development in Nigeria but its deployment have largely been at demonstration scale by donor entities and/or at individual levels. This is largely due to inadequate commitments from government in the provision of fiscal incentives to encourage and provide enabling environment for public-private participation in renewable energy utilization. Current government efforts at increasing electricity access through generation capacity additions are leveraging on Nigeria’s vast natural gas resources, but also there exist vast quantities of renewable sources that can supplement the conventional energy sources and increase energy access especially in rural areas. We qualitatively analyzed the effectiveness of FIT design elements in increasing RE electricity generation by benchmarking with its performance in selected countries. We found that FIT do increase RE electricity generation and reduce energy poverty. Based on the lessons learnt from the experience of our case studies, the policy tool can increase both dynamic and static efficiency if carefully designed. Nigeria should hasten the provision of the policy and regulatory framework that will enable FIT to facilitate RE generation with careful consideration of design elements selection for optimal attainment of the policy goals.