Enabling Economic Sustainability in Nigeria through Energy Efficiency Best Practices for Businesses

Energy remains one of the fundamental challenges for the future of the world. Businesses need to strike the balance between operational efficiency and sustainable development. With soaring energy prices and increased scarcity of natural resources, pointing out energy efficiencies – from planning to manufacturing to operations - makes great business sense.

This paper would address the impact of energy efficiency on the economic sector, how energy efficiency can influence the prices of goods, and ways businesses and industries can apply energy-efficient best practices to drive growth and sustainability.

The Current Evaluation of Nigeria Energy for Businesses and Industries

The availability of reliable electricity supply has always been a challenge to businesses and industries in Nigeria. Even as a nation endowed with enormous energy resources, Nigeria is affected by a chronic energy crisis because of inadequate power supply to the citizens.

The issue of energy has become one of the most sensitive topics of our time; and as a result, the world is starting to accept the possibility of change in the patterns of consumption, leading to energy conservation measures and more rational use of existing energy sources to ensure sustainability. This change in perception is no more apparent than in the growing recognition that energy is the key to the development of the global civilization and essential to improving the quality of life beyond the basic activities necessary for survival.

Nigeria is currently consuming 0.2% of total world energy consumption and this is not to say that the total demand is being met. To statistics, the per capita energy

consumption is 1964.3kWh as against the United States’ value of 99,356.3kWh while the energy-related carbon dioxide emissions are 91.94 million metric tons (which contributes about 0.4% of world carbon dioxide emissions). Hence, Nigeria is still below its expected level of permissible emission. But in Nigeria, less than 25% of the population has access to electricity thus it further showed that the electricity demand is suppressed by supply. There is not enough energy for businesses to run their chain and even worse for industries that require sustainable and reliable energy for running their production lines.

Challenges Faced By Businesses And Industries On Energy Supply

The cost of energy is often a barrier to the business growth and success of many businesses today. This is becoming an issue for even more businesses now than ever as the energy market sees some of the highest prices we have ever seen.

The quest to attain sustainable industrial development is one of the greatest challenges of the 21st century. Besides the fact that industrialization has brought unprecedented improvement in wealth and prosperity, industrialization has also produced many externalities.

Externalities like the overexploitation of natural resources, air and water pollution, climate change, and massive accumulation of waste on the earth's surface. In recognition of the earth‘s limited capacity, researchers posit that industrial development must progress in a sustainable direction to ensure that the needs of this generation are met without compromising the ability of future

generations; this involves taking into consideration environmental protection, social advancement, and economic development.

The exploitation and harnessing of primary energy sources for industrial purposes is one of the major threats to industrial development; thus, the progressive development of industrialization is vital and dependent on industrial energy use.

The industrial sector uses more energy than any other end-use sector and this sector represents about 37% of the world‘s primary energy consumption.

Due to the unreliability of Nigeria's power supply, there are reports report of great damage to hypersensitive electronic devices used in the production lines of many factories which has made some of the manufacturers (e.g. Dunlop, Cadbury, etc) embark on using standby generators and these damages happen several times a year, in curing huge loss on the

companies. Companies like British American Tobacco (BAT) Nigeria, have reiterated their commitment to renewable energy. It will be implementing a 1MW solar panel renewable energy solution (without backup battery storage) to complement the existing gas engine-powered supply at its Ibadan factory. Also, Total Energies is set to invest $60 billion into renewable projects in Nigeria.

It has become difficult for manufacturers to have faith in the utility, and in order not to interrupt the production line activities, thus the manufacturers resort to private

electricity generation using standby generators. The cost of maintaining the generators to avoid knockouts equally implicates the price of commodities for consumers.

Using fuel generators did not only increase production costs but affected a high increase in the cost of goods. Generators used by these industries and companies resulted in a high increase in air pollution because of the release of gas emissions, which also made the environment harmful and unfriendly for healthy living.

Studies by Research gate show that 262 firms spent nearly N2 billion on privately supplied electricity. According to the Central Bank of Nigeria (CBN), it has also been revealed that Nigerians spend about $14 billion on generators and fuel yearly to prevent their businesses from being crippled.

The Impact Of Energy Efficiency On Industrialization And Economic Growth

The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said in a report

“The costs incurred to provide alternative sources of power are inevitable if industrialists are to remain in business in Nigeria. This, perhaps, is the biggest single factor impeding the growth of industrialization."

“The issue has made our industries very uncompetitive in recent times. That is one of the reasons our industries cannot produce for export unlike their counterparts abroad. Also, our industries contribute less than 10 percent to the country’s Gross Domestic Product (GDP.)”

According to the International Monetary Fund (IMF), lack of access to electricity and unreliable power supply are key constraints to doing business in Nigeria. The IMF estimated the annual economic loss at about $29 billion.

It is without a doubt that the Energy use of Business and Industries influence industrialization and economic growth in the Nigerian economy. So far it has been negatively affected due to the lack of energy supply.

To meet this suppressed power demand then energy efficient tools must be employed as it is done in various nations of the world.

For industries to operate sustainably it is then required that innovative mechanisms are tailored to solve the negative impacts of industrial energy use. As such, ensuring that industries make the switch to renewable energy sources would improve productivity and save every cost. But Industrial energy efficiency practices and management are effective means of mitigating the negative effects of industrial energy consumption and at the same time ensuring that these industries save cost, conserve energy, and influence a cleaner environment.

Renewable Energy Technologies For Driving Energy Efficiency

Energy efficiency simply means using less energy to perform the same task – that is, eliminating energy waste. Energy efficiency brings a variety of benefits: reducing greenhouse gas emissions, reducing demand for energy imports, and lowering our costs on a household and economy-wide level. Renewable energy technologies help to accomplish these objectives.

To provide access to reliable energy and power supply in Nigeria and to reduce these emissions, the electricity generation industry needs to decrease its use of fossil fuels. A way of decreasing fossil fuel use is by switching to reliable energy sources, such as renewable energy.

Renewable energy is derived from resources that are replenished naturally on a human timescale. Such resources include biomass, geothermal heat, sunlight, water, and wind.

For Nigeria, Sunlight is the biggest source of renewable energy. The Northern part of Nigeria has the highest potential for solar. The North has average solar insolation of 2200 kWh/m^2, while the southern part has 1800 kWh/m^2. In addition to adequate power outputs, solar energy would aid the country in reducing carbon emissions from fossil-fueled energy generation.

The sun provides more than enough energy to meet the whole world's energy needs, and unlike fossil fuels, it won't run out anytime soon. As a renewable energy source, the only limitation of solar power is our ability to turn it into electricity efficiently and cost-effectively. With storage banks and batteries, solar energy can produce electricity for 24 hours all year even on less sunny days.

No greenhouse gas emissions are released into the atmosphere when you use solar panels to create electricity as a renewable energy source. Electricity from solar power is a very important energy source in the move to clean energy production.

After solar panels have been installed, operational costs are quite low compared to other forms of power generation. Fuel isn’t required, and this means that solar power can create large amounts of electricity without the uncertainty and expense of securing a fuel supply. This eradicates the use of generators and drastically reduces operational costs for running diesel generators to 80% and reduces the cost of electricity bills by 70%.

Renewable Energy technology used as electricity and for buildings, influences energy efficiency, energy consumption, and energy conservation.

Recommendations For Energy Efficiency Practices For Industries

It is evident from our discussion that energy efficiency practices are a necessity not only for the protection of the environment but also for the protection of consumers through the price paid for finished products from the industries in Nigeria. For industries in Nigeria to effectively reduce the cost of energy utilization, aside from renewable energy technologies, the following recommendations should not be looked over.

(i) Embarking on the training of the staff on the need to be prudent in the way they use and apply energy.

(ii) Management should create energy efficiency awareness committee whose duties among others will be to educate the workers on how best to use energy. Such committee can embark on printing stickers with the inscription, for instance, “Switch off your electrical appliance at the close of work daily” and place it in strategic locations.

(iii) In space conditioning, ventilation and cooling needs can be reduced. For example, external heat gains can be minimized by shade trees, exterior and interior shades, insulated windows, light roofs, walls, and roof insulation.

(iv) Minimize as much as possible the use of incandescent bulbs. Much more efficient and cost-efficient lighting techniques such as using compact fluorescent lamps and LED bulbs should be encouraged.

(v) Industries should use improved designs and better control, more efficient equipment which ultimately leads to low power consumption.

Recommendations For Energy Efficiency Practices For Businesses

i) Use Energy Saving Business Equipment and Technology

If your business is making changes to be more energy efficient, an obvious solution would be to acquire energy-saving business equipment. This could include a paper-saving printer, energy efficient Air Conditioning, LED lighting, etc.

ii) Energy Efficient Buildings

Buildings can cause the emission of carbon dioxide as they use electricity and fossil fuels. Electricity is the primary source of power in buildings. Every building needs an electric supply for lighting and other electronic appliances. Applying Energy efficiency in buildings by focusing on energy-efficient design and insulation, can provide the same energy service but use less energy thereby contributing to reducing your energy bills over time.

iii) Unplugging unused electronic appliances

It is not right to leave electronic alliances that are not in use plugged into the socket. Not only is it harmful, but it also increases your energy consumption. So to conserve energy and be energy efficient, it is important to unplug unused electronic appliances. This would help save energy, money, and utility bills for business owners.

iv) Acquire energy audit technologies

There is an energy audit technology that businesses can acquire to help measure their energy loads. The Use of solar meters can also assist to track energy consumption and appropriate billing.


Energy efficiency allows businesses and industries to use less energy and obtain the same energy service. It is cost-effective and reduces the impact on the price of commodities, improving economic satisfaction for Nigerian citizens. Energy efficiency reduces greenhouse gas emissions, production costs, operating costs, electricity generation costs, and the need for energy imports. Knowing the shortage of power supply in Nigeria, and the recent commitment to transition to renewable energy, the concept of energy efficiency is used in the economic sector to drive sustainability. This is because these two are the core elements of sustainable energy, industrialization, and development

Just like Manitoba Hydro Place located in Manitoba, Canada practiced energy efficiency in building their office. It is now the most energy-efficient building in North America and uses 70 % less energy than other office buildings.

Businesses and industries need to also take steps toward energy efficiency best practices.