Recently, I had an opportunity of listening to Bankole Cardoso, the managing director of Engie Energy Access, Nigeria’s end to end off-grid energy solutions provider at a corporate event where he said that his company is focused on building hundreds of solar mini-grids across the country in the next five years, at a cost of, ranging from N50-200 million, per site. Each of these mini-grids, according to him, is expected to provide access to electricity to, at least, 1,000 households.
A solar mini-grid is an off-grid electricity distribution network involving small-scale electricity generation. The United Nations Framework Convention on Climate Change (UNFCCC) defines it as an electricity project with a power rating below 15MW and disconnected from larger electric grids. Mini-grids are used as a cost-effective solution for electrifying rural communities where a grid connection is challenging in terms of cost for transmission and distribution as well as the cost to the end-user population.
Mini-grids deliver up to 99.5 percent uptime, meaning that the customers will have the energy access to do what they need to do – lighting, entertainment and even operate their cottage industries without a need to own a power generating set. These customers, just like their counterparts on the national grid, will be paying for their energy usage at the end of the month.
This got me thinking. Taking the average, it means that with one billion naira, a state governor, for instance, could provide electricity to, at least, ten communities (10,000 households) in his state. I could not help but imagine what this could translate to in terms of economic cum social development – production, commerce, employment, leisure and the general wellbeing of the populace. This is not to mention that such a move would be a big investment for the state as the project will be a recurrent money spinner for the state.
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One wonders how the present crop of leaders think. The craze now seems to be initiating many soon-to-be-abandoned white elephant projects like airports that cannot run at up to 20 percent capacity, housing schemes, ill-thought-out economic empowerment schemes and so on. The fact is that providing access to electricity to a community is a much bigger economic empowerment programme than handing over motorcycles, sewing machines or the paltry sums that most governors hand out in the name of the economic empowerment programmes. The reason is not farfetched.
Nigeria is suffering from huge power challenges. According to USAID’s sources, although Nigeria has the potentials of generating as high as 12,000 MWs of electricity a day, our power generation for the approximately 189 million population is currently put at a little above 9,000 MWs while our distribution sprawls at around 3,500 MWs.
This poor power generation, coupled with equally poor transmission and distribution networks, is the reason Nigeria can only boast of such the abysmal access to power statistics of 45 percent (36 percent – rural, and 55 percent – urban). It is estimated that not less than 20 million households are without power supply. For those lucky to have access to power supply, about 40 percent are ‘under electrified – have less than 12 hours of grid electricity per day.
The enormity of our power challenges is what has been driving various administrations since the advent of the present democratic dispensation into adopting one measure or the other in their futile efforts towards addressing these challenges, culminating in the unbundling of the power sector and privatising the distribution arm of NEPA/PHCN to become DISCOs. These efforts, notwithstanding, the nation’s power situation is still abysmal with little signs of improvement. Actually, the reason Nigeria is yet to experience an energy crisis is Nigerians’ dependence on private power generating sets.
Nigeria’s energy sector, which is highly dependent on hydro and thermal power generation, is bedevilled by poor infrastructure. We lose most of the power generated by the GenCos due to the DisCos’ limited infrastructure to distribute and none to store the excess. This scenario, caused by poor investment, especially in the areas of transmission and distribution, is why we have insufficient supply locally but have to export power to our neighbouring countries.
This is the main reason government should look towards solar mini-grids as an additional option in its efforts towards addressing the poor access to electricity in Nigeria, especially the rural areas. It is surprising that, despite the enormous potential of solar power generation, Nigeria is yet to adopt it to the level that most developed countries of the world have done.
Power is the buzzword in today’s world. Most machines today, no matter how simple, are built to run on electricity. While growing up, our barbers used to cut our hair with manual clippers but not anymore. To open any micro-business like a serious barber’s salon or tailoring shop in Nigeria today, even in communities that are connected to the national grid, one must buy, at least, a power generating set (I beta pass my neighbour, in local parlance) in addition to the equipment or machinery that particular industry requires.
Here is the catch. With the dwindling revenue that the federal and state governments face as a result of the low price of crude and covid-19, the government may partner with the mini-grid service providers to provide access to electricity to its rural communities. These providers, being privately-owned, will source financing and build the required infrastructure to deliver the much-required energy access to the communities. It could even, depending on the structuring of the agreements, earn some revenue to those governments. The power sector reform has already provided a framework for this kind of partnership and all the interested governments need do is just plug and play.
Sunday, a public affairs analyst, writes from Lagos
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