Nigeria is home to Africa’s largest economy and more than 200 million people, 45 percent of whom lack reliable electricity access, many of whom pour capital into backup generators instead of investing in staff or equipment.
To change this narrative, a new report by Rocky Mountain Institute (RMI) and the UK-charity Shell Foundation has explained how renewable energy mini-grids can power two- and three-wheeled electric vehicles (EVs) for the same cost as fossil-fueled alternatives.
The RMI report draws on two pilot projects to show that these symbiotic energy-transport benefits are within reach for rural communities.
In a detailed breakdown of how the pilot project works, the report explained how a mobility company MAX introduced its own custom-built two-wheeled EV models to drivers in Gbamu Gbamu community, a mini-grid-connected town in rural Ogun State, Nigeria.
According to the RMI’s report, the pilot offered charging via a battery swap model, and the fleet’s battery-to-vehicle ratio was 1.5 while MAX staff members based in Gbamu Gbamu were on call if drivers experienced issues, and routine maintenance was performed on-site.
“All vehicle charging was conducted at a centralized charging depot powered by Rubitec’s solar-hybrid mini-grid, which has provided reliable electricity to roughly 2,500 residents of Gbamu Gbamu since 2018,” the report titled ‘Powering Small-Format Electric Vehicles with Mini-grids’.
The report explained how Rubitec created a special $0.34/kWh (130 naira/kWh) tariff for EV charging, which is a discount over the tariff of $0.46/kWh (175 naira/kWh) offered to most other mini-grid customers.
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It noted that the mini-grid is powered by an 84 kilowatt-peak (kWp) solar array, a lead-acid battery bank, and a backup diesel generator to serve over 550 small residential households and 150 larger customers and businesses including barbershops, restaurants, hotels, welders, and more.
“The mini-grids electricity tariffs are cost-competitive with previously incumbent diesel generation, and the nearest grid access point is a 40-minute drive in good road conditions. The pilot operated from September 2020 and was ongoing as of November 2021,” the RMI’s study showed.
At the costs, rental revenues and vehicle utilization observed in the Nigeria pilot, the report noted that investments in leased electric two-wheelers are expected to pay back within a 10-year vehicle life.
“The payback period for an electric two-wheeler used in a daily rental business model at a rural mini-grid community ranged from three to ten years across model scenarios. The EV economics were strongest in scenarios where vehicles were rented more frequently than in the Nigeria pilot,” the report said.
It noted that increasing vehicle utilization is key to maximizing EVs’ benefits to mini-grids and EV cost competitiveness with fossil-fueled vehicles.
“Future investment can raise utilization and maximize the value of EVs by tailoring the business model and vehicle designs to the specific needs of rural mobility customers. Thorough customer research is a first step to understanding these needs and increasing EV use,” it added.
Richard Gomes, acting CEO at Shell Foundation said access to affordable renewable energy and clean transport is central to delivering the inclusive growth that serves low-income communities in sub-Saharan Africa.
“By demonstrating the clear synergies between these two technology sectors — electric vehicles and mini-grids — this report provides a path to scaling access and improving the health, education and earning potential of millions of people,” the report concluded.
