The availability of energy plays a major role in every aspect of a country’s socio-economic life. Energy is, and will always be, a key component of the economic, social and political development of any country. An inadequate supply of energy restricts socio-political development, limits economic growth, and adversely affects the quality of life of citizens, both in urban and rural areas. Improved energy supply results in improved standards of living, which manifests in increased food production and storage, increased industrial output, improved security, provision of efficient transportation, adequate shelter, improved healthcare and enhancements in other human services.
Nigeria is blessed with abundant primary energy resources. These include non-renewable energy sources such as natural gas, crude oil, and coal; and renewable energy sources such as hydro, biomass, solar and wind. However, the economy has mainly depended on the consumption of oil and gas for commercial energy. Nigeria is a country of about 200 million people with one of the largest underserved population base in terms of access to energy (80 million people unserved). In other words, about 40% of the population do not have access to electricity. For those who have access, the electricity supply is oftentimes erratic and unstable.
Nigeria’s current electricity reality reveals a daily average dispatch of about 5000 MWs of electricity (Texas produces three times as more as wind energy alone), far below the 45,000 MW needed to meet current demand. On March 31st, 2016, Nigeria arrived at a new low, producing 0 MW for almost three hours. This was not the only incident as we have encountered incidences of net-zero generation after that.
With the bulk of Nigeria’s electricity generation coming from thermal sources like coal and gas-fired plants (over 80%), there has been a push to diversify the energy mix and include more renewable sources. A recent report by GET.invest revealed that the theoretical generation capacity of solar in northern and central Nigeria, using only 5% of suitable land, is 42,700 MW. The same study cites the potential for small hydro at 3,500 MW and that for large hydro at 11,250 MW. With an average of 2m/s -4m/s at 10m hub height, Nigeria also has potential for moderate wind generation. For the purpose of this write-up, renewable energy will refer to mostly solar energy, since it is the prevalent technology being deployed in Nigeria.
With so much potential for electricity generation through renewable energy, why aren’t we seeing greater renewable energy penetration in Nigeria? While not an exhaustive list, this write up hopes to touch on a few issues plaguing renewable energy integration and access in Nigeria and proposes possible solutions to correct them.
Government as the Quarterback
The quarterback’s position in American football is to read the defence of the opposing team and coordinate his team’s offence to overcome that defence scheme. He orchestrates the plays and makes sure every player on the team knows their position and responsibilities. Similarly, the government must anticipate setbacks and roadblocks in the renewable energy space and proffer solutions to overcome them. The government must also make sure its policies are clear, transparent and implementable by all stakeholders in the sector. The driver of a viable and sustainable renewable energy sector must be the government. Whether through policy making or by engaging with relevant stakeholders, the position of the government must be to create a conducive atmosphere for the growth and deployment of renewable technology and services. The Electric Power Sector Reform Act 2005 (Act No. 6 of 2005) for feed-in tariffs for renewable energy and National Renewable Energy and Energy Efficiency Policy (NREEEP) are just a few of the policies being implemented by the Nigerian government that is seen as positive steps for the renewable energy space. What informs good policy decision making and what should be some of the key policy drivers?
- There must be a drive to localize the manufacture of equipment and materials that are key to the renewable energy value chain. This implies that the government must invest in research and development and must encourage the private sector to do the same. Long term benefits are that these materials and equipment will become cheaper, thereby driving down the cost of deploying the solutions.
- For equipment that cannot be locally produced, the government must make importing them cheaper and easier. This can be in the form of tax breaks/holidays or reduced import duty tariffs on renewable energy products.
- The government must ensure there is a strong and continuous interface between all relevant stakeholders, especially renewable energy developers and policymakers. Those with technical knowledge of the sector (Discos, consultants and developers) should be involved in shaping the policy of the market.
- Government must synergize all platforms in the renewable energy space to make sure they are working towards a common goal. For example, regulatory bodies like the Nigeria Electricity Regulatory Commission (NERC), and the Nigerian Renewable Energy Roundtable under the Nigerian Economic Summit Group (NESG), all have working groups or committees that have some interest in the same space. A platform for sharing ideas across all relevant stakeholders should exist so that policies are comprehensive, aren’t duplicitous and carry everyone along.
The Emergence of Quacks
We must all admit that the first “green wave” was largely a bust due to the presence of quacks in the industry. Installers with little or no training implemented sub-standard designs and solutions. The outcome was poorly sized and installed systems that were overly expensive and broke down in less than 1 year. Even worst was that the solution to a faulty system was usually a complete overhaul rather than a comprehensive diagnosis of what went wrong. As a result, so many people were turned off by renewable energy solutions. Getting a solar system was akin to flushing money down the drain.
Regulatory Bodies: The Gatekeepers
The lack of oversight and proper regulations still plague the industry. Although the situation has improved, back then, a lot of substandard equipment was allowed to flood the markets. Batteries that would die after a few discharge cycles were imported wholesale into the country. Organizations like the Standard Organization of Nigeria (SON) must be empowered to tackle importers of fake or sub-standard products.
Also, there was no way to regulate solar engineers, designers, technicians and installers. Organizations like the Council of Registered Engineers (COREN) and the Nigerians Society of Engineers (NSE) must ensure that only those who have the requisite knowledge and have been properly trained are allowed to install renewable solutions. Of course, ensuring that this process is free of corruption is a challenge, but it is vital that these organizations have internal processes that can weed out the quacks. If these organizations lack the capacity to achieve this, the competency vetting process must be outsourced to other organizations that are capable.
Education: Demystifying Renewable Energy
Education is key both in the traditional and non-traditional sense. In the traditional sense, renewable energy and its benefits to the ecosystem need to be part of the core curriculum at all levels of primary and secondary education. This education occurs in the standard classroom setting.
For the non-traditional approach, this education is often through media and outside the walls of the classroom. Individuals and organizations should be educated on energy-saving measures such as turning off lights when not in use, load batching etc. This task is usually carried out by NGOs, CSOs and other government organizations in the form of publicity campaigns. This education should also include where to get certified installers and energy-efficient consumer appliances, renewable financing options etc.
In the Nigerian context, the use of renewable energy as a noble gesture to save the planet would most likely fall on deaf ears. More relevant reasons like noise and air pollution, low maintenance costs, available financing, tax credits and rebates, and no refuel costs are more likely to sway people to buy a renewable energy solution.
Finally, whatever prejudice and misconceptions brought about by the first failed green wave need to be corrected or righted. People must know that renewable energy provides a reliable and competitive alternative to current power options and this is only going to get better with time.
Renewable energy is still relatively expensive compared to the prevalent method of energy generation in Nigeria which is the petrol or diesel generator. According to a recent Economic Sustainability Committee report on Accelerated Deployment of Off-grid Technologies, over 87 million people today live on less than $1.90 a day and 60 million people are financially excluded. Even with those who are gainfully employed, the cost is simply too high in our “cash now” economy. This means that for any serious renewable integration plan, financing such as single-digit loans, repayment plans, discounts and rebates need to be prioritized. The government, banks and other financial institutions should build a framework around renewable energy financing for both middle class and low-income families.
The Discos are a very important piece in improving renewable energy access. With the high cost of building new distribution networks, Discos can on their own, or through partnerships with the private sector, deploy off-grid distributed renewable energy solutions that will be cheaper due to little transmission and distribution costs. For the on-grid space, customers with installed renewable energy systems can sell back excess energy to the grid through net metering. Net metering presents a strong case for investing in the sector as revenue from excess power that is sold can help recoup the capital investment cost of the system. For the Disco, it helps them meet the energy demand of customers. The Discos must therefore include renewable energy in their economic planning and dispatch. Issues like feed-in-tariffs, power reliability and quality requirements from sources outside its network must also be included in the planning. Discos should not see developers and independent power providers as rivals but as partners in meeting the needs of their customers.
Another way Discos can get involved is through demand response programs. Even though there is pressure to rapidly scale up supply, it has been well documented that the most economical way to meet our power needs is to reduce energy demand whenever possible at no detriment to the customer’s experience. Through demand response programs, there are ways to realize savings by shaving off flexible demand (demand that can be shifted or scaled back when called upon). In many cases, the cost of these savings might be equivalent to the cost of building new power plants to offset those demands. For example, rather than build a costly new 50 MW power plant in town B that has a 450MW load requirement and an existing installed capacity of 400MW, a Disco can implement a demand response program in town A that reduces their demand from 550MW to 500MW, with the extra 50MW sent to town B.
Energy access is the right of every Nigerian. Improving this access is achievable and investing in renewable energy communicates seriousness and commitment to tackling this seemingly non-ending issue of electricity in Nigeria.