Overcoming the market constraints to on-grid renewable energy investments in Nigeria

This paper explains the constraints to on-grid renewable energy (RE) investments in Nigeria. It moves past the prevailing argument that establishes a dichotomy between an emerging RE niche and a dominant resistive hydrocarbon-intense regime. It argues that in Nigeria, there are wider industrial organizational issues that constrain on-grid RE investments in the Nigerian electricity supply industry (NESI). It analyses the NESI within the commercial and regulatory dimensions. The structure–conduct–performance–regulation (SCPR) framework, which is based on the traditional structure–conduct–performance (SCP) framework, was used in this paper to evaluate the NESI’s structure, which constrains new investment. The SCPR framework adds the regulatory dimension of analysis to industries such as the NESI, where government intervention is significant and necessary. Data from 24 semi-structured interviews and various reports from NESI actors were analysed in preparing this paper. Findings show that the market structure of the NESI has created a liquidity crisis in the sector, and this liquidity crisis constrains on-grid RE investments in Nigeria. The liquidity crisis constrains not only on-grid RE investments, but also conventional on-grid generation investments in Nigeria