‘60% rural electrification target by 2020 feasible’
Ify Malo is the Founder/Chief Executive Officer of Clean Technology Hub Inc. In this interview with STANLEY OPARA, Head of Energy & Solid Minerals Desk, she speaks on energy deficiency and the quest to address related poverty trend.
What is the nature of Power for All’s support to government in the quest to drive electricity penetration?
Power for All supports the government through policy advocacy on how to increase access to energy through decentralised renewable energy. Power for All engaged with the Nigerian Electricity Regulatory Commission in its drafting of the Mini-Grid Regulations, which are regarded as one of the best in the world. It also engaged with the Central Bank of Nigeria on how simplified digital finance solutions will drive DRE growth in Nigeria, and was instrumental to the recent creation of the Payment Service Banks category, which is expected to drive digital finance and mobile money.
Based on your research, to what extent would you say deficiency in electricity has fueled the level of poverty in Nigeria?
Without a doubt, yes, the lack of electricity in Nigeria has contributed to the level of poverty. It has reduced economic activities and made the cost of business prohibitively expensive, making it harder for people to increase their incomes. In our work, we have seen people who gain recent access to electricity increase their incomes significantly through higher economic productivity or through saving money they would have otherwise spent on expensive fossil-fuels. This cuts across access to electricity from pico-solar/solar lighting solutions, solar home systems or mini-grids – the results are consistent.
What is the current number of un-electrified Nigerians, and which area of the country is most affected?
According to the World Bank, there are 74 million Nigerians without access to electricity. Some estimates put the number of unelectrified people as high as 93 million. This is excluding the millions of Nigerians who are connected to the grid but do not receive power supply. Based on our research, the population of unelectrified Nigerians is disproportionately located in the Northern parts of the country.
Is the 60 per cent rural electrification target by 2020 feasible, given the current realities in Nigeria? How much can be done in one year?
The target is feasible, but a lot will need to be done from both the government and the private sector. For starters, the government will need to design and implement policies that will lower the cost of DRE solutions, such as removing tariffs and duties on imported solar components and products. It will also need to operationalize the Rural Electrification Fund which is meant to subsidise rural electrification projects such as mini-grids.
Not only the Federal Government, the state governments need to also be more proactive on using DRE to increase the rural electrification rates in their domains by partnering with mini-grid developers to invest in projects. These partnerships can be through domiciling the relevant laws and policies that will drive investments into their states, providing part-funding for mini-grid projects and simplifying the ease of doing business for developers such as through providing land for projects. This was the crux of our Scaling Off Grid Energy project through which we have been able to speak to policymakers from 18 state governments on the need to mainstream DRE solutions into their state electrification plans.
On the private sector side, there is need for the finance sector to recognize the immense potentials in the mini-grids sector and offer the right funding that will catalyze the sector and unlock it.
Can you explain how solar home systems can save Nigeria $4.4billion yearly in energy costs?
Solar Home Systems will save Nigeria about $4.4 billion a year through savings in spending on fuel for expensive generating sets for homes and small businesses. A lot of our petrol consumption is not by vehicles, but by energy-deficient homes and businesses for powering small generators that we popularly call “I beta pass my neighbor”. These generators are not just expensive, but they are also polluting and inefficient. Replacing these generators with solar home systems greatly reduces the spending by these homes and businesses; on a macro scale, they save Nigeria about N1.5 trillion yearly.
What are mini-grids, and what role can they play in Nigeria’s electrification agenda?
A mini-grid is an integrated local generation and distribution system with installed capacity below one megawatt, capable of serving numerous end-users independent of the national grid. They have a significant role to play in electrifying Nigeria as they are cheaper and faster to deploy than extending the traditional power grid.
Imagine a remote village far away from any transmission lines and without electricity: to provide power to this community, it means laying expensive cables and poles to supply this village. The return on this investment cannot be justified and it will be adding to an already overburdened grid. However, through mini-grids, this community can be provided with enough power for its needs at a cheaper cost than grid extension. The reality is that the grid cannot reach everyone; thus, mini-grids become ideal for communities that are either too far from the grid or on it but do not receive power from it.
Do you think the country has a robust regulatory framework to drive the power supply ambition?
Absolutely. Like I said earlier, our mini-grids regulations are one of the best in the world as it makes provisions for interconnected mini-grids (mini-grids that can make use of existing power distribution facilities) and also has strong protections for communities in which mini-grids can be sited. This is besides the numerous other regulations in place for renewable energy. There are still some improvements that can be made but we do have robust regulations in place.
To realise this dream, what do you envisage will be the cost implication, and where would the bulk of the fund come from?
We need to rethink power as a social service – power is a service for which users should pay. Considering our population and level of economic activity, there is a lot of economic opportunity in Nigeria’s power sector. As you also know, the government has largely exited the power sector in 2013 via the unbundling and privatization of the now defunct National Electric Power Authority and only playing the role of regulator and policymaker. So we envisage that the funding for rural electrification will largely come from the private sector which will recognize the business opportunities within.
Given the level of poverty in Nigeria, do you see Nigerians being able and willing to pay for power if supply becomes robust?
At the moment, Nigerians already pay a lot more for power through self-generation using fossil-fuel generators. Research has shown that petrol and diesel generators are on average three times per kilowatt-hour than solar power. Even those who are without these generators are paying a higher price for not having access to power when you compare the higher economic productivity and incomes they will have if they have power. But most importantly, we have seen remote communities who were thought of to be too poor to pay for power debunk that belief after a mini-grid has been sited there, as they channel that power to productive activities that raise their income and improve their lives.
The Nigerian government is targeting 30 per cent in renewable energy mix by 2030, according to the Minister. Is this not too slow compared to Power for All’s ambition?
We do not think it is too slow. We are aware of the fact that to achieve these targets, a lot of work needs to be done: putting in place the right regulations and policies, attracting private sector investment and financing and doing consumer awareness to stimulate demand. We also realize that compared to other African countries like Kenya and Tanzania, Nigeria is a bit late to the party and has some catching up to do.
How much of carbon will the quest for renewable address, given your timelines for major milestones?
Nigeria will eliminate at least 31 million tons of greenhouse gases a year directly if it achieves its renewable energy targets by 2030 and another 179 million tons of greenhouse gas through the contribution of renewable energy to economy-wide energy efficiency.
What is the country’s current carbon emission level, and is this a major reason why you quest for renewables in intense?
As at 2015, our carbon emissions was estimated at 99 million tons; however, when you add emissions from other greenhouse gas based on their global warming potential, we had total emissions of about 400 million tons carbon dioxide equivalent. This is indeed a major reason for Nigeria to intensify power generation from renewables.
Already, we are experiencing the effects of climate change: there has been a shrinking of the Lake Chad, the Sahara Desert is encroaching, we have more severe floods and we will likely see more droughts in the North. According to a DFID study in 2009, between 2-11% of Nigeria’s GDP will be lost if no adaptation actions are taken. This means that if Nigeria intends to develop sustainably, it must seek a low-carbon path to growth and development, which is what we committed to through the Nationally Determined Contributions plan that we submitted as part of being a signatory to the Paris Climate Accord in 2015. Renewable energy forms a major plank of this low-carbon growth.
Health-wise, how much can renewables do in terms of cleaner environment and standard living?
Yes, it can tremendously. For example, people who replace their kerosene lamps, candles and other inefficient forms of lighting with pico-solar and clean lighting solutions have not just reported saving money; they also have eliminated the risks of tuberculosis by 90% and cataract by 50%, the risks of burns from kerosene by 30% and eliminated the chances of kerosene poisoning from their homes. This is even before factoring in the reduced air pollution, and it is the same for all renewable energy solutions.
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