Mini-Grids: Bridging the electricity gap through renewables.
“Renewables are a central pillar of SDG7 and they represent one of the most effective and economical means available in the pursuit of universal energy access” – Rabia Ferroukhi, Deputy Director of Knowledge Policy and Finance, International Renewable Energy Agency.
Nations both developed and underdeveloped are coming to the realisation that modern energy is key to attaining a good number of development goals especially as it pertains to environmental sustainability, the delivery of public services and poverty eradication. The obvious linkages between reliable and affordable electricity to quality of life, access to health, education, etc. and the inherent transformations it brings to any society contribute directly to the SDGs and have the potential to lift communities and nations out of poverty.
Modern societies are able to thrive and grow because of the healthy mix in their energy sources. According to the Nigerian Minister of Power, Works, and Housing, Mr. Babatunde Raji Fashola, the United Kingdom and the United States of America operate with an energy mix of 25% coal, 30% gas, 20% nuclear, and 20% renewable energy sources consisting of biomass, hydro, wind and solar. Nigeria on the other hand, has over the years focused on gas, neglecting other alternative energy sources. Nigeria’s energy supply has been a major source of concern among various stakeholders, underpinning the need for a thriving economic climate that will attract local entrepreneurs, the international private sector, as well as financing institutions.
Bridging the electricity gap in Nigeria
Global indicators have witnessed an increase in the population of people with access to electricity. However in rural areas, especially within sub-Saharan Africa and Asia, a good number of people are still living without electricity, and are still cooking without clean fuels or more efficient technologies. Power generated from solar and wind contribute a relatively minute share in the energy mix, making it expedient for more efforts to be made in increasing the share of renewable energy mix, ultimately contributing to the desired global energy consumption targets and achieving the 2030 Agenda for Sustainable Development.
As part of the solutions in bridging the electricity gap in Nigeria, especially in the rural communities where the lack of electricity affects the quality of life of the citizens, the Nigerian Electricity Regulatory Commission (NERC) in 2016 released a new Mini Grid Regulation. The regulation aims at governing the development of integrated electricity generation and distribution supply systems of under 1MW either in isolation from the Distribution Companies (Discos) or interconnected to the Discos’ existing network infrastructure.
Through this, private sector actors can generate as high as under 1MW of electricity for localised groups of customers across Nigeria. Studies reveal that mini-grid systems often incorporate a 75-99% renewable supply.
The World Bank posits that North and Central Nigeria alone could conveniently produce 42,700MW of power from solar thermal if explored, to satisfy the internal demand of about 20,000MW and more.
Nevertheless, since the release of the Mini-Grid regulation in 2016 till date, have there been any identifiable changes in the development of the power sector or energy supply as desired?
There are several opportunities for Nigeria to explore renewable sources of energy to operate several schemes of mini-grids that have the potential to satisfy both national needs and generate international wealth. With several mini-grid developers operating in the country, most of these sites are built with local and international development aid funds. The question then is, why are there not many private actors within the mini-grid space and why are these grids not being scaled for the benefit of communities?
Creating opportunities in the Nigerian Market
Of the 7,000 megawatts of electricity produced in the country, only about 5,000 megawatts is currently being used on the grids leaving about 2,000 unused megawatts of power. Observers and critics have suggested that the unused 2,000 megawatts of power not being distributed stems from the inadequacies in the distribution networks. Efforts by the Nigerian Electricity Regulatory Commission (NERC) to allow players in the energy sector establish mini-grids in the country have allegedly created opportunities that transcends job opportunities, improved access to power, etc. In addition to all of these, opening up the playing field to potential investors may also cause a paradigm shift in the operations of the Distribution Companies (DisCos) and provide some relief to function and meet the demands of their customers.
Leveraging opportunities to bridge the energy gap
Africa has the inherent potentials to provide solutions that will bring rapid growth and developments in mini-grids and off-grid renewable energy sources.
In Bangladesh, about 133, 000 jobs were reported to have been created through the Solar Home System, an initiative supported by the Bangladeshi government to “fulfil the basic electricity requirement of the off-grid rural people of Bangladesh” in addition to creating jobs, the project was able to positively impact on the manufacturing industry. The industry expanded from manufacturing only batteries to producing other components including solar panels locally. This ultimately contributed to the growth of the renewable energy market in Bangladesh.
Through the intervention of local players in the renewable energy sector in Rwanda, Energy Private Developers, the country of Rwanda in 2017 received a U.S. $50 million (Fifty Million Dollar) fund managed by the World Bank and rolled out through the Development Bank of Rwanda to facilitate the electrification of about 445, 000 households in the next seven years. The funds if managed adequately are intended to increase the country’s electricity access by 19% and will majorly service households and businesses supplying basic services like lightening, radio and cell phone charges. It will also serve as a means for mini-grids developers to gain access to credit facilities.
From the foregoing, the discussions at the Sustainable ConversationsTM (SC VIIITM) today, Friday, September 21, 2018 at Four Points by Sheraton, Victoria Island, Lagos, seeks to address the obvious gaps in developing the renewable energy sector in Nigeria. It will unravel the obstacles to private sector investments in mini-grids and ultimately address the concerns of the civil society in taking advantage of renewable sources of energy. The conversations around the topic will highlight the practical ways in which mini-grid power options can become a more affordable alternative for both investors and consumers in terms of regulations, cost and prospective funding. Also to be identified are the roles of different stakeholders in establishing a firm renewable energy mix for Nigeria.
With a country as vast in size and with peculiarities of different regions, developing an energy mix that responds to the unique features of the different regions may be an alternative worth considering. For instance, developing more solar plants in the north where sunlight is not lacking rather than in the south.
Players in the energy sector will also thrive better when they can locate the obvious lapses and areas that can be easily exploited and work towards finding lasting solutions to the issues plaguing the sector like the case of Energy Private Developers in Rwanda. This proves the extent of the successes that can be achieved when concerned interest groups work together to meet set goals and drive growth in affected sectors.