Nigeria is endowed with abundant energy resources, both conventional and renewable,
which provide her with immense capacity to develop an effective national energy plan. However,
introduction of renewable energy resources into the nation’s energy mix have implications on its energy
budget. The national energy supply system has been projected into the future using MARKAL,
a large scale linear optimization model. However, this model may not be absolutely representative of
the highly non-linear future of renewable energy. Results of the model reveal that under only a least
cost constraint, only large hydro power technology is the prominent commercial renewable energy
technology in the electricity supply mix of the country. Despite the immense solar energy potentials
available, solar electricity generation is attractive only under severe CO2 emissions mitigation of
the nation’s energy supply system. Similarly, the penetration of small-scale hydro power technology
in the electricity supply mix is favoured only under CO2 emissions constraints. Due to economy
of scale, large hydro power technology takes the lion share of all the commercial renewable energy
resources share for electricity generation under any CO2 emissions constraint. These analyses reveal
that some barriers exist to the development and penetration of renewable energy resources for electricity
production in Nigeria’s energy supply system. Barriers and possible strategies to overcome them
are discussed. Intensive efforts and realistic approach towards energy supply system in the country
will have to be adopted in order to adequately exploit renewable energy resources and technologies
for economic growth and development.