Macroeconomic Determinants of Renewable Electricity Technology Adoption in Nigeria

Olufemi Muibi SAIBU


https://orcid.org/0000-0001-9162-3817

Oluwasola E. OMOJU


https://orcid.org/0000-0002-4678-1522


Abstract

Renewable electricity technology adoption is an essential part of the measures to mitigate climate change and promote sustainable development. This paper investigates the drivers of and barriers to renewable electricity technology adoption in Nigeria. Specifically, the factors that influence the share of renewable electricity in total electricity consumption in Nigeria is investigated using data from 1981 to 2011 and employing the Johansen cointegration technique and vector error correction method. The results show that there is a long run relationship between renewable electricity consumption and GDP, trade openness, financial development and share of fossil fuel in energy consumption. Trade openness promotes renewable electricity consumption while obsession with economic growth and the lobby of conventional energy sources undermine it in Nigeria. Financial development does not have significant impact on renewable electricity technology adoption in Nigeria. It is recommended that the Nigerian government should pursue policies that not only increase the amount of renewable electricity, but also increase the share of renewables in total electricity consumption.

Keywords:

Renewable technology, electricity consumption, economic development, Nigeria

Abur, B.T.; Duvuna, G. A. (2014). Renewable energy resources in Benue State – Nigeria: Estimation and mapping of solar energy potentials. International Journal of Current Engineering and Technology 4(3): 1406-1411.
  Google Scholar

Aguirre, M.; Ibikunle, G. (2014). Determinants of renewable energy growth: A global sample analysis. Energy Policy 69: 374-384.
  Google Scholar

Beckman, J.; Borchers, A.; Stenberg, P. (2011). The determinants of on-farm renewable energy adoption. Presentation at the Agricultural and Applied Economics Association’s 2011 AAEA & NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24-26, 2011.
  Google Scholar

Bird, L.; Bolinger, M.; Gagliano, T.; Wiser, R.; Brown, M.; Parsons, B. (2005). Policies and market factors driving wind power development in the United States. Energy Policy 33: 1397-1407.
  Google Scholar

Brunnschweiler, C.N. (2010). Finance for renewable energy: An empirical analysis of developing and transition economies. Environment and Development Economics 15(3): 241-274.
  Google Scholar

Carley, S. (2009). State renewable energy electricity policies: An empirical evaluation of effectiveness. Energy Policy 37: 3071–3081.
  Google Scholar

Chang, T. H.; Huang, C. M.; Lee, M. C. (2009). Threshold effect of the economic growth rate on the renewable energy development from a change in energy price: Evidence from OECD countries. Energy Policy 37: 5796-5802.
  Google Scholar

Chien, T.; Hu, J.L. (2008). Renewable energy: An efficient mechanism to improve GDP. Energy Policy 36: 3045-3052.
  Google Scholar

Emberga, T.T.; Obasi, I.; Omenikolo, A.I.; Nwigwe, C. (2014). Renewable energy potentials and production in Nigeria. Standard Scientific Research and Essays 2(3): 55-59.
  Google Scholar

Gan, L.; Eskeland, G.; Kolshus. H. (2007). Green electricity market development: Lessons from Europe and the US. Energy Policy 35: 144-155.
  Google Scholar

Gertler, P.; Shelef, O.; Wolfram, C.; Fuchs, A. (2013). How Pro-poor Growth Affects the Demand for Energy. NBER Working Paper Series No. 19092. Cambridge, MA: National Bureau of Economic Research.
  Google Scholar

Hong, Y. (2010). Lecture notes on advanced econometrics. Cornell University.
  Google Scholar

Huang, M.Y.; Alavalapati, J.; Carter, D.; Langholtz, M. (2007). Is the choice of renewable portfolio standards random? Energy Policy 35: 5571-5575.
  Google Scholar

Johnstone, N.; Hascic, I.; Popp, D. (2010). Renewable energy policies and technological innovation: Evidence based on patent counts. Environmental and Resource Economics 45: 133-155.
  Google Scholar

Lin, B.; Xie, C. (2014). Reduction potential of co2 emissions in China’s transport industry. Renewable and Sustainable Energy Reviews 33: 689-700.
  Google Scholar

Marques, A.C.; Fuinhas, J.A.; Manso, J. R. P. (2010). Motivations driving renewable energy in European countries: A panel data approach. Energy Policy 38: 6877-6885.
  Google Scholar

Martinot, E. (2002). Power sector restructuring and environment: Trends, policies and GEF experience. Washington, DC: Global Environment Facility.
  Google Scholar

Menz, F.; Vachon, S. (2006). The effectiveness of different policy regimes for promoting wind power: Experience from the States. Energy Policy 34: 1786-1796.
  Google Scholar

Mitchell, C.; Sawin, J.; Pokharel, G.R.; Kammen, D.; Wang, Z.; Fifita, S. (2011). Policy, financing and implementation. In: Edenhofer, O.; Pichs-Madruga, R.; Sokona, Y.; Seyboth, K.; Matschoss, P.; Kadner, S.; Zwickel, T.; Eickemeier, P.; Hansen, G.; Schlomer, S.; Stechow von, C. (eds.). IPCC special report on renewable energy sources and climate change mitigation. New York: Cambridge University Press.
  Google Scholar

Mohammed, Y.S.; Mustafa, M.W.; Bashir, N.; Mokhtar, A.S. (2013). Renewable energy sources for distributed power generation in Nigeria. A review of the potential. Renewable and Sustainable Energy Reviews 22: 257-268.
  Google Scholar

Moomaw, W.; Yamba, F.; Kamimoto, M.; Maurice, L.; Nyboer, J.; Urama, K.; Weir, T. (2011). Introduction. In: Edenhofer, O.; Pichs-Madruga, R.; Sokona, Y.; Seyboth, K.; Matschoss, P.; Kadner, S.; Zwickel, T.; Eickemeier, P.; Hansen, G.; Schlomer, S.; Stechow von, C. (eds.). IPCC special report on renewable energy sources and climate change mitigation. New York: Cambridge University Press.
  Google Scholar

Narayan, P. K.; Smyth, R. (2008). Energy consumption and real GDP in G7 countries: New evidence from panel cointegration with structural breaks. Energy Economics 30: 2331-2341.
  Google Scholar

Newsom. C. (2012). Renewable energy potential in Nigeria: Low-carbon approaches to tackling Nigeria’s energy poverty. London: International Institute for Environment and Development (IIED).
  Google Scholar

Ogujiuba, K.; Obiechina, M. E. (2011). Financial sector reforms in Nigeria: Issues and challenges. International Journal of Business and Management 6(6): 222-233.
  Google Scholar

Olowojaiye, G. (2013). Post-reform financing of grid power plants: A Banker’s concern. In: Adenikinju, A.; Iwayemi, A.; Iledare, W. (eds.). Energy technology and infrastructure for development. Ibadan: Atlantis Books.
  Google Scholar

Omojolaibi, J.O. (2012). Financing the alternative: Renewable energy in the Nigerian economy. In: Adenikinju, A.; Iwayemi, A.; Iledare, W. (eds.). Green energy and energy security: Options for Africa. Ibadan: Atlantis Books.
  Google Scholar

Omri, A.; Nguyen, D.K. (2014). On the determinants of renewable energy consumption: International evidence. Energy 72: 554-560.
  Google Scholar

Perc, M.; Szolnoki, A. (2010). Coevolutionary games – A mini review. Biosystems 99: 109-125.
  Google Scholar

Peterson, S. (2007). Greenhouse gas mitigation in developing countries through technology transfer: A survey of empirical evidence. Mitigation and Adaptation Strategies for Global Change 13(3): 283-305.
  Google Scholar

Pfeiffer, B.; Mulder, P. (2013). Explaining the diffusion of renewable energy technology in developing countries. Energy Economics 40: 285-296.
  Google Scholar

Popp, D.; Hascic, I.; Medhi, N. (2011). Technology and the diffusion of renewable energy. Energy Economics 33(4): 648-662.
  Google Scholar

Rafiq, S.; Alam, K. (2010). Identifying the determinants of renewable energy consumption in leading renewable energy investor emerging countries. Paper presented at the 39th Australian Conference of Economists, held 27-29 September, in Sydney.
  Google Scholar

Sadorsky, P. (2009a). Renewable energy consumption, CO2 emissions and oil prices in the G7 countries. Energy Economics 31: 456-462.
  Google Scholar

Sadorsky, P. (2009b). Renewable energy consumption and income in emerging economies. Energy Policy 37: 4021-4028.
  Google Scholar

Saibu, O.M.; Omoju, O.; Nwosa, P.I. (2012). Trade openness and the dynamics of unemployment and poverty incidence in Nigeria: A multivariate cointegration analysis. Nigerian Journal of Economic and Social Studies 54(3): 367-388.
  Google Scholar

Salim, R. A.; Shuddhasattwa, R. (2012). Why Do Some Emerging Economies Proactively Accelerate the Adoption of Renewable Energy. Energy Economics 34(4): 1051-1057.
  Google Scholar

Shaaban, M.; Petinrin, J. O. (2014). Renewable energy potentials in Nigeria: Meeting rural energy needs. Renewable and Sustainable Energy Reviews 29: 72-84.
  Google Scholar

Sovacool, B. (2009). Rejecting renewables: The socio-technical impediments to renewable electricity in the United States. Energy Policy 37: 4500-4513.
  Google Scholar

SDSN and IDDRI (2014). Pathways to deep decarbonisation – 2014 interim report. Sustainable Development Solutions Network (SDSN) and Institute for Sustainable Development and International Relations (IDDRI). New York: Columbia University.
  Google Scholar

Stadelmann, M.; Castro, P. (2014). Climate policy innovation in the South – Domestic and international determinants of renewable energy policies in developing and emerging countries. Global Environmental Change 29: 413-423.
  Google Scholar

Vachon, S.; Menz, F. (2006). The role of social, political, and economic interests in promoting state green electricity policies. Environmental Science and Policy 9: 652-662.
  Google Scholar

Van Ruijven, B.; Vuuen van, D. P. (2009). Oil and natural gas prices and greenhouse gas emission mitigation. Energy Policy 37: 4797-4808.
  Google Scholar

Van Rooijen, S.; Wees van, M. (2006). Green electricity policies in the Netherlands: An analysis of policy decisions. Energy Policy 34: 60-71.
  Google Scholar

Wang, Y. (2006). Renewable electricity in Sweden: An analysis of policy and regulations. Energy Policy 34: 1209-1220.
  Google Scholar

Wustenhagen, R.; Bilharz, M. (2006). Green energy market development in Germany: Effective public policy and emerging customer demand. Energy Policy 34: 1681-1696.
  Google Scholar

Download


Published
2020-12-01

Cited by

SAIBU, O. M., & OMOJU, O. E. (2020). Macroeconomic Determinants of Renewable Electricity Technology Adoption in Nigeria. Economic and Environmental Studies, 16(1(37), 65–83. Retrieved from https://czasopisma.uni.opole.pl/index.php/ees/article/view/2889

Authors

Olufemi Muibi SAIBU 
https://orcid.org/0000-0001-9162-3817

Authors

Oluwasola E. OMOJU 
https://orcid.org/0000-0002-4678-1522

Statistics

Downloads

Download data is not yet available.