Path to sustainable energy consumption: The possibility of substituting renewable energy for non-renewable energy

Globally, energy consumption profile is largely dominated by fossil fuels with non-renewable energy sources accounting for as high as 84% of the total energy mix in 2019. Non-renewable energy resources emit high carbon and are subject to resource depletion which create concerns over environmental safety and resource sustainability. To correct these scenarios, there is need to rejig energy mix of individual countries by reducing the share of non-renewable energy and increase that of renewables. Nigeria is one of the countries which has a significant proportion of its energy consumption accounted for by non-renewable energy sources. This study therefore aims to examine the interfuel substitution possibility between renewable and non-renewable energy in Nigeria for the period 1987–2016. Owing to the existence of contemporaneous cross-error correlation in the system of equations which violates a key assumption of the Ordinary Least Squares (OLS) estimation technique, the seemingly unrelated regression (SUR) procedure was employed to estimate the parameters. The results show substantial evidence of substitution possibilities between renewable and non-renewable energy. To maximally actualise the potential of renewable energy in the country, the study recommends that the government should, especially at this developmental stage, design and develop an integrated renewable energy planning and investment that will promote investment in research, market development and regulation of renewable energy resources.