Economic costs and environmental impacts of fossil fuel dependency in sub-Saharan Africa: A Nigerian dilemma

Abstract

Problem statementThe fleet of gasoline generators used for electrical power generation in urban areas in certain parts of sub-Saharan Africa has increased notably. This trend has economic and ecological cost implications for end-users (households and small businesses) and society. Due to lack of data, there exist hardly any empirical studies quantifying the drivers of adoption and the magnitude and of the costs and the impact on people's welfare, energy and environmental degradation. Closing this knowledge gap is critical to reach certain Sustainable Development Goals: 1 – No poverty, 7 – Affordable and clean energy, and 13 – Climate action across sub-Saharan Africa. MethodologyOrdinary Least Squares (OLS) regression was applied to determine the socioeconomic drivers of usage while a levelized- and life cycle cost assessment was used to estimate the economic costs of gasoline generators. The analysis is based on a unique dataset of 100 urban gasoline generator users in Lagos, Nigeria. ResultsPrimary motivation for the adoption of gasoline generators for electrical power generation is frequent on-grid power outages. The extent to which power generators are adopted, relates to the level of education, and correlated to education, income. Furthermore, the average cost of electricity generated through gasoline generators (USD 0.44 or ₦159 per kWh) is substantially higher than on-grid electricity supply (USD 0.06 or ₦20 per kWh). End-users of gasoline generators spend 48 % (ca. USD 99 or ₦35,727) of their monthly (ca. USD 207 or ₦74,702) income on electricity. Furthermore, the annual greenhouse gas (GHG) emissions from the current fleet of generators in Lagos was estimated at 1.5 million tons of carbon dioxide equivalent (CO2e), which is equivalent to the emissions from 326,087 passenger cars. PolicyPolicymakers must push for energy policy and incentives that promote sustainable electricity generation and use among urban households and small businesses in Lagos and throughout Nigeria.