Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Alternative Source of Power Supply: Implications on Cost of Production in Nigeria

Chukwuma Victoria Azuka

Abstract

The increasing inadequacy of Nigeria’s electricity supply has significantly hindered industrial growth and economic development, driving macro and micro businesses to seek alternative sources of power. This study examines the implications of utilizing alternative power sources on the cost of production in Nigeria. Alternative energy sources, such as solar and biomass, present opportunities for more reliable power, yet their adoption remains slow due to high capital costs, technical challenges, and limited infrastructural support. This study investigates how these alternative power options can mitigate the challenges associated with the unreliable national grid while affecting the cost structures of production in businesses. The study aims to consider the financial and operational consequences of transitioning to alternative power source by focusing on cost, the reliability of supply, and sustainability. The study will adopt energy economics theory and the qualitative method of literature review. This study concludes that although alternative power sources require significant financial investment, they offer long-term benefits in reducing fuel dependency, enhancing production efficiency, and contributing to environmental sustainability. For businesses, the transition to alternative power sources is more than an economic imperative; it is increasingly becoming a competitive advantage.

Keywords

Power supplyProductionAlternative sourcesolarcost

References

Adebobola, T., Adetunmbi, A., & Omoniyi, O. (2023). Cost challenges facing Nigerian manufacturing industries using generating sets as main source of power supply. ABUAD Journal of Engineering Research and Development (AJERD). https://doi.org/10.53982/ajerd.2023.0601.03-j. Adelaja, A. O. (2020). Barriers to national renewable energy policy adoption: Insights from a case study of Nigeia. Energy Strategy Reviews, 30(1), 105-119. Ademola, C. (2024). Breaking: Blackout as national grid collapses for the tenth time in 2024. https://www.nairametric.com/2024/11/07/breaking-blackout-as-national-grid-collapses-for- the-tenth-time-in-2024 Akinwumi, I., Moses, R., & Akinbami, J. (2006). Electric power supply strategies and productivity in selected manufacturing industries in Nigeria. Journal of Resources, Energy, and Development, 3, 107-128. https://doi.org/10.3233/RED-120034. Amoah Twum, M. A., & Beecham, E. O. (2024). AD814: Nigerians lack reliable electricity, leaving most discontent with government efforts. https://www.afrobarometer.org/publication/ad814-nigerians-lack-reliable-electricity- leaving-most-discontent-with-government-efforts Arowolo, W., & Perez, Y. (2020). Market reform in the Nigeria power sector: A review of the issues and potential solutions. Energy Policy, 144, 111580. Baker, L., Hook, A., Sovacool, B. K. (2021). Power struggles: Governing renewable electricity in a time of technological disruption. Geoforum, 118, 93-105. Boateng, G. O., Balogun, M. R., Dada, F. O., Armah, F. A. (2020). Household energy insecurity: Dimensions and consequences for women, infants and children in low-and middle-income countries. Social Science & Medicine, 28. Daus, Y., Yudaev, I. V., Taranov, M. A., Gazalov, V. S., (2019). Reducing the costs for consumed electricity through the solar energy utilization. International Journal of Energy Economics and Policy, 9(2), 19-23. Eweka, E. E., Lopez-Arroyo, E., Medupin, C. O., Oladipo, A., & Campos, L. C. (2022). Energy landscape and renewable energy resources in Nigeria: A review. Energies. 15(15), 5514. https://doi.org/10.3390/en15155514 Hernandez, D. (2013). Energy insecurity: A framework for understanding energy, the built environment, and health among vulnerable populations in the context of climate change. American Journal of Public Health, 103(4), e32-e34. Ikpoto, E. (2023). Manufacturers spend N60bn on alternative energy in six months-MAN. https://www.punchng.com/manufacturers-spend-N60bn-on-alternative-energy-in-six- months-MAN Melnyk, L. H., Sommer, H., Kubatko, O. V., Rabe, M., & Fedyna, S. M. (2020). The economic and social drivers of renewable energy development in OECD countries. Business Perspectives in Management, 18(4), 37-48. Obuebite, A. A., Nwosi-Anele, A., & Okwonna, O. (2021) Public private partnership (PPP) and the provision of infrastructure in Nigeria: A case for energy mix sector in the Niger-Delta. International Journal of Petroleum and Petrochemical Engineering, 7(1), 11-20. Olisah, C. (2023). MAN says manufacturers spent 144 billion on alternative electricity supply, opposes tariff hike. https://www.nairametric.com/2023/06/23/man-says-manufacturers- spent-n144-billion-on-alternative-electricity-supply-opposes-tariff-hike Olujobi, O. J. (2022). Legal analysis of erratic supply of electricity in Nigeria: Is renewable energy a true alternative? Redeemer’s University Journal of Jurisprudence and International Law, 2(1), 14-33. Onyshchenko, V., & Sivitska, S. (2014). Alternative energy developing investment support in terms of energy dependence. Economic Magazine, 10(1), 34-37. Oshin, O. A., Onile, A. E., Adanikin, A., & Fakorede, E. (2018). Reliability of distribution networks in Nigeria: Ikorodu, Lagos State as a case study. International Journal of Engineering and Emerging Scientific Discovery. 3(4), 20-33. Punchng (3 November, 2024). Blackout, a national security threat. https://www.punchng.com/blackout-a-national-security-threat Sanni, S. O., Oricha, J. Y., Oyewwole, T. O., & Bawonda, F. I. (2021). Analysis of backup power supply for unreliable grid using hybrid solar PV/diesel/biogas system. Energy, 227, 120- Solarin, S. A. (2020). An environmental impact assessment of fossil fuel subsidies in emerging economies. Environmental Impact Assessment Review,85, 106-143. Suleiman, U. G. (2023). Effect of renewable energy development on sustainable development of small and medium enterprises potentials in Nigeria. Research Journal of Business and Economic Management, 6(1), 1-11. Sweeny, J. L. (2001). Energy economics. International Encyclopedia of the Social & Behavioural Sciences, 4513-4520. Thai-Ha, L. & Park, D. (2021) What drives energy insecurity across the world? A panel data analysis. Energy Research & Social Science, 77. Twidell, J. (2021). Renewable energy resources. Routledge. Williams, E. A., Olalekan, R. M., Yarwamara, E. I., & Oshatunberu, M. (2019). Renewable energy sources for the present and future: An alternative power supply for Nigeria. Energy and Earth Science. 2(2), https://doi.org/10.22158/ees.v2n2p18 Zweifel, P., Praktiknjo, A., & Erdmann, G. (2017). Energy economics: Theory and applications. Springer.