IHS Towers, the largest tower company in Africa that manages 16,000 telecoms towers out of about 30,000 Base Transceiver Stations (BTS) owned by major telecoms providers in Nigeria, says Africa countries, especially Nigeria, need to deliver a renewable power revolution to stop the excessive expenditure on power generation.
The company, which commissioned a report on delivering renewable energy in Africa written by the Economist Intelligence unit, reveals that Nigeria’s telecoms sector is losing N32.4 billion on diesel to power generation in base stations annually.
According to Issam Darwish, executive vice chairman/CEO, IHS Tower Group, “Energy is still way behind in Africa and telecoms and manufacturing companies in Nigeria lose about 10 to 15 percent of revenue because of power outage.
“IHS uses 20 million litres of diesel every month in the management of base station generators in Nigeria alone, if you multiply that by the price of diesel which is about N135 per litre you would see how ridiculous amounts of money go to power generation alone.”
The report, “Power Up, Delivering Renewable Energy in Africa,” highlights examples of successful renewable energy projects across the continent and identifies barriers and promoters of success within the sector.
The report reaffirms that Sub- Saharan Africa has the raw ingredients for a vibrant renewable energy market: resource abundance, falling costs of wind turbines and solar panels, smart innovations in end- user equipment and political commitment – by governments and international donors alike.
The company, which confirmed its consolidation with Helios towers, said it was already considering solar farm opportunities in Rwanda that could potentially supply power to the national grid in the first ‘energy swap’ model to be used in Africa.
“We decided to build a build a solar farm in Rwanda because they have better national power grid availability in the country. We have only about 1,500 sites in Rwanda so it is much easier to test at a smaller scale before bringing it into a much bigger country like Nigeria,” Darwish said.
From insights provided by the Executive Secretary, Association of Licensed Telecommunications Operators of Nigeria, Gbolahan Awonuga, the Global System for Mobile communications companies, LTE operators and Internet Service Providers remain the largest consumers of diesel in the country.
“Operators in the sector have always relied on generators in an industry that does not tolerate recurrent downtimes, and the decision by the telecoms operators to outsource most of the sites to tower operators has not significantly reduced the cost of managing the sites.
“This is because the cost of managing the sites was passed to the service providers who in turn pass it down to telecoms consumers,” Awonuga said.
Femi Akintunde, a telecoms industry analyst and CEO AM facilities told BusinessDay that the cost profile for power generation in Nigeria’s telecom industry is humongous.
“Power alone constitutes up to 60 percent of their operating cost so it will be very beneficial if there can be a cheaper alternative to diesel generators.
“In other clams, the telecommunications industry depends on public supply of power but the situation in Nigeria is different, generators that should be a backup has become the main supply so they are dependent on generators without which their services cannot be rendered.
“The telcos sell by the second and for every one second that they are not able to provide service to their customers; they are losing money so it is critical for them to look at how much they will lose by not having a stable and steady supply of electricity to power their equipments so it makes power very important but at what cost?” he said.
The case for building renewable energy infrastructure in Sub-Saharan Africa is stronger than ever and positive experiences in lead markets such as South Africa and Kenya highlight successful strategies and best practices. However, the report highlights that Africa requires up to $90 billion of investment annually to meet its current energy shortfall.
Innovative tools and projects are helping to bring green energy to people beyond the traditional grid. However, there is no substitute for larger infrastructure programs such as wind and solar farm.
If considered, Africa’s renewable energy sector has the capacity to leapfrog heavy infrastructure with a larger than assumed market, the emergence of smart business models and improved technology.
IHS suggests that Africa, especially Nigeria being one the largest countries on the continent must deliver a renewable power revolution, as happened with telecommunications, to reach its ambitious targets.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
