Even though they exist in a handful of countries, a technical report released by World Bank has revealed Nigeria is one of the leading countries in terms of regulating the operations of Mini-grid operations in Africa.
Stakeholders have always tasked the government on better regulation in renewable energy space, a key component in Nigeria’s economy which needs quick and stable growth over a few decades if it’s to create jobs for 21 million unemployed citizens and lift 87 million people out of extreme poverty.
“Nigeria is one of the frontier countries; the regulator has adopted one of the most comprehensive sets of mini-grid regulations in Africa covering issues like licensing, retail tariff setting, and what happens when the main grid arrives,” says World Bank’s 2019 report titled “Mini-Grids for Half a Billion People”.
According to the World Bank regulation plays a key role in most of the countries (Bangladesh, Cambodia, Kenya, Myanmar, Nepal, Rwanda, and Tanzania) with the fastest gains in electrification between 2010 and 2018.
“Nigeria is another recent example of a country that has developed a comprehensive national electrification strategy and implementation plan,” World Bank report said.
Nigeria’s main sources of electricity which could have provide solutions are not producing sufficient energy to meet the country’s demand. And for many decades, homes, businesses, industries and farmers have faced big challenges when accessing electricity as manufacturers or farmers require nearly continual energy to increase production.
To address this challenge, Nigeria’s Rural Electrification Agency (REA) is implementing the World Bank–supported Nigeria Electrification Project (NEP), which aims to scale up investment in mini grid and off-grid solutions.
On April 15, 2019, the REA launched the mini grid and solar home system components of the NEP. The mini grid component aims to extend electricity services to 300,000 households and 30,000 enterprises in rural areas by 2023.
Based on a recent experience in Nigeria, World Bank noted that portfolios of mini-grids can be prepared to the point where they are ready for full feasibility assessment and community engagement at a cost of about $2,300 per site.
“The largest components of this per-site cost are socioeconomic surveys and energy audits to estimate electricity demand and willingness and ability to pay. These components account for 58 percent of the total per-site cost, and their costs are largely linear since the primary driver is human resources,” World Bank said in its 2019 report.
Although the World Bank also admitted that technology can help expedite the completion of these labor-intensive tasks through the use of drones to map out a village and efficiently sequence household visits by enumerators, or through the use of tablet-based software to swiftly and more accurately capture survey data.
The World Bank admitted that several governments have incorporated mini grids as part of their energy policy, giving the systems and industry a place in the energy sector although some countries have adopted mini grid regulations that allow for a light-handed approach.
“In some countries, e-government has streamlined the process for obtaining location and building permits. Even though these costs are important, they are not expected to change significantly in high–energy-deficit countries over the next decade unless efforts are undertaken to facilitate doing business in these countries,” World Bank noted.