Precious Anga
Lagos — Nigeria could save an estimated $121 billion in fuel costs by transitioning to a power generation mix dominated by renewable energy, the Federal Government has said, describing the move as a major economic opportunity capable of lowering energy costs for businesses, households and government while boosting industrial competitiveness.
Minister of Power, Joseph Tegbe, disclosed this at the Lagos Chamber of Commerce and Industry (LCCI) 2026 Renewable Energy Outlook Conference in Lagos, where government officials and private sector leaders examined the role of clean energy in strengthening Nigeria’s economy. He said the country’s Energy Transition Plan (ETP) treats renewable energy as an economic growth strategy rather than simply a climate commitment.
According to the minister, the ETP projects that increasing renewable energy’s share of Nigeria’s electricity mix to 90 per cent would generate $121 billion in fuel savings, while requiring about $10 billion in additional annual investment above current spending levels. He argued that the investment should be viewed as a long-term economic opportunity rather than a financial burden.
Tegbe said the transition plan targets 277 gigawatts of installed electricity generation capacity by 2060, with solar energy expected to become the dominant source of power. He noted that Nigeria, alongside South Africa, led Africa’s solar power expansion in 2025 and expressed confidence that abundant solar resources, supportive government policies and rising private sector investments would sustain the country’s leadership in renewable energy development.
While emphasising the importance of renewable energy, the minister maintained that natural gas would remain a key transition fuel. With about 202 trillion cubic feet of proven gas reserves, he said Nigeria has sufficient resources to provide reliable baseload electricity as renewable capacity expands. “Gas is not our destination, but it is an indispensable companion on the journey,” he said.
Tegbe also urged manufacturers, logistics operators, technology firms and other industrial players to take advantage of opportunities created by the Electricity Act 2023, which now permits embedded generation, industrial mini-grids, renewable energy procurement agreements and direct power supply from independent producers. He added that the Federal Government’s power sector reforms have already attracted more than $2 billion in private investment, while industry revenues nearly doubled from about ₦850 billion in 2023 to over ₦1.5 trillion in 2025.
The minister called on the organised private sector to play a greater role in ongoing electricity reforms by participating in state electricity market consultations and supporting commercially viable tariff structures, renewable energy procurement mechanisms and grid access regulations.
Also speaking at the conference, the Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, said renewable energy must evolve beyond rural electrification to become a catalyst for industrialisation, manufacturing, exports and digital infrastructure. He noted that the global economy is becoming increasingly dependent on electricity due to the rapid growth of artificial intelligence, electric mobility, advanced manufacturing and data centres, warning that countries unable to provide reliable and affordable electricity would struggle to remain competitive.
Aliyu said renewable energy infrastructure such as mini-grids, solar-plus-storage systems and distributed energy resources should now be regarded as productive industrial assets capable of powering markets, agro-processing centres, technology parks and manufacturing clusters. He argued that while mini-grids supplying electricity to households improve living conditions, those supporting businesses and commercial activities stimulate wider economic growth and job creation.
He further observed that Nigerian manufacturers’ heavy dependence on diesel generators continues to increase production costs and reduce competitiveness. According to him, recent regulatory reforms, including the Electricity Act 2023 and the Nigerian Electricity Regulatory Commission’s Mini-Grid Regulations 2026, have significantly expanded opportunities for commercially viable distributed renewable energy projects and increased private sector participation in the electricity market.
The conference concluded with renewed calls for stronger collaboration between government and investors to accelerate renewable energy deployment, improve electricity reliability and position Nigeria for a more competitive, low-carbon economy.
