How to successfully put renewables on Nigeria’s grid

Over time, Nigeria has developed different political frameworks to support the deployment of renewable power generation. Notable among these frameworks include the National Renewable Energy and Energy Efficiency Policy (NREEEP, 2015), the Regulations on Feed-In-Tariff for Renewable Energy Sourced Electricity in Nigeria (REFiT, 2015), the SEforALL Action Agenda for Nigeria aka Vision 30:30:30, the Rural Electrification Strategy and Implementation Plan (RESIP, 2017) and Nigeria’s Nationally Determined Contribution (NDC) under the Paris Agreement, among others. Some key targets of these frameworks include generating at least 2,000 megawatts (MW) of power by 2020 from renewable sources excluding large hydro, increasing energy access rate to 75% and 90% by 2020 and 2030, respectively, generating 30 gigawatts (GW) of electricity by 2030 with RE forming 30% of the energy mix and deploying 13 GW of off-grid solar power by 2030.

The target of generating 2000 MW by 2020 was completely missed as no on-grid generation capacity from renewable energy (RE) sources was added to the mix. Consequently, the target of increasing the energy access rate to 75% in the same year was also missed. Access rates are currently at 60 percent, according to the United States Agency for International Development (USAID) – Power Africa.

In contrast to the non-existent progress with on-grid renewables, there has been notable success in off-grid RE electrification using mini-grids and solar home systems to drive energy access. The Rural Electrification Agency (REA) and its flagship projects, including the World Bank and African Development Bank-funded Nigeria Electrification Project (NEP), the Rural Electrification Fund (REF) and other capital projects, has contributed significantly to this progress. REA, in recent years, has increasing its technical capacity, strengthening institutional governance and applying a holistic gender-inclusion strategy for implementing its projects and the overall development of the off-grid sector. The on-grid RE sector could emulate and learn from the successes of the off-grid sector.

Read also: ‘Off-grid Tech Solutions cost effective, sustainable for farmers, SMEs’

The Top-Down Business as Usual Approaches Will Not Work for On-Grid RE
The top-down approach is the default in Nigeria when it comes to implementing policies. This approach usually gets overwhelming due to the lack of political will, institutional and technical capacities, enabling environments and lack of finance to support implementation. For example, to meet the target of 2000 MW RE generation capacity by 2020, the Nigerian electricity bulk trader signed Power Purchase Agreements (PPAs) in 2016 with 14 private developers to deploy a cumulative of 1,125 MW of on-grid solar-PV generation capacity. While this was a widely celebrated laudable step, disputes arose regarding certain elements of the transactions, including tariffs and investment guarantees. As a result, the programme has long been stalled.

The One Gigawatt Challenge
Although the price of solar PV modules and the balance of system components have been steadily declining in recent years, no grid-scale PV plant has indeed been successfully developed and completed in Nigeria. The implication is a lack of technical expertise and otherwise, and high capital and political risks for the first series of projects. Together, these factors significantly increase the overall cost of constructing such projects in emerging markets like Nigeria. This situation is known as the “1 GW Challenge”. The upside of the I GW Challenge is that after installing the first GW, project construction costs, capital costs and other costs parameters should reduce significantly, sort of like a learning curve.

With the current downturn facing the economy, especially with the currency under constant depreciation, implementing large on-grid PV projects would only become more expensive. Besides the disagreement at the economic and political levels, one could also argue that the current structure of the Nigerian electricity industry cannot support the integration of large amounts of variable renewable energy (VRE). For context, the Nigerian power market has been undergoing sector reforms for the past 20 years without yielding many benefits. Despite these extensive reforms, useful power generation capacity still hovers around the 4000 MW mark, with low liquidity and high losses. Therefore, it isn’t easy to invest in infrastructure upgrades. Moreover, the system does not have the required flexibility for integrating VRE from intermittent sources (solar, wind) into the grid. So far, the centralised system has not delivered on its expectations, so what could be the way forward?

Consider Innovative Bottom-Up Strategies
Navigating the above-stated complications requires a multipronged approach, including applying bottom-up strategies. This strategy involves innovating solutions to obstacles foreseen and as they emerge.
One bottom-up approach to consider is the implementation of smaller-sized projects. Whereas each of the previous solar PV projects was sized between 50 – 100 MW and planned to be connected to the transmission grid networks, developers can deploy smaller projects between 10 – 50 MW and connect directly to the distribution grid. This approach will be beneficial for cost-saving as the ancillary works for transmission grid extension, upgrades and reinforcement to accommodate the new generating capacity will be avoided. Peradventure these ancillary works have to be completed on the distribution grid, it would be at a much-reduced cost. Also, the complications of dealing with a sovereign entity will be non-existent as agreements, and regulatory approvals can be handled faster by the Distribution Company (DisCo) and the industry Regulator.

Another implementation strategy is distribution sub-franchising. The DisCo sublets a chunk of its franchise area to a franchisee that takes complete responsibility for power generation and distribution. The generation can be fulfilled in 10 – 50 MW modular units using natural gas, small hydro, solar-PV, or a hybrid of more than one technology. Commendably, Kano DisCo and Konexa are exploring this option to develop a 10 MW RE powerplant in Kano State.
Also to be considered is the application of distributed energy resources (DER). DERs are electricity generation systems from as small as 3 kilowatts (kW) up to 50 MW located close to the end-users and working parallel to the grid. Rooftop solar, small wind turbines, biogas/biomass power, energy storage systems, mini-grids (stand-alone and interconnected) etc., are examples of DERs.

These systems provide backup power for reliability purposes at a cheap rate for the end-user. In addition, excess power can be sold to the surrounding distribution grid through net metering or feed-in tariffs (FiT) schemes in interconnected configurations. In interconnected configurations, the NERC Regulations on Feed-In-Tariffs for Renewable Energy Sourced Electricity in Nigeria (REFiT, 2015) could be used to compensate these small power producers. The latter may even opt to sell larger shares of their electricity production to the grid. Example projects include GVE Projects Limited’s 1 MW Wuse Market Interconnected Mini-Grid capable of selling excess power to the Abuja DisCo. Another is EM-ONE Energy Solutions’ 1.5 MW and 2.28 MW Microgrid at the Federal Ministry of Works and Housing Complex.

In conclusion, it is expedient for Nigeria to redeem the time spent grappling in the dark by changing its approach towards implementing policies and projects. The world has been changing rapidly, bringing along technological advancements and the continuous disruption of conventional models in virtually all human endeavours. It may be unrealistic to expect renewables to provide a huge chunk of Nigeria’s electricity needs all at once, considering the plethora of issues that must be addressed to enable the shift. Still, we can take advantage of renewables on a decentralised level, building the system from the ground up. Decentralised renewable power systems are versatile both technically and commercially. They can enhance the grid’s physical resilience against natural disasters and the adverse effects of climate change while also improving project economics. Besides, the future grid will likely be a collection of distributed energy resources interconnected and working in unity.