BUSINESS

Renewable Energy, Key to Nigeria’s socio-economic development

Lande Abudu

The Nigerian energy supply crisis has been an ongoing failure of the Nigerian power sector to provide adequate electricity supply to domestic and industrial use. Despite been endowed with large oil, gas, hydro and solar resource, and it already has the potential to generate 12,522 megawatts (MW) of electric power from existing plants, but most days is only able to generate around 4,000 MW, which is insufficient. In this interview, with Lande Abudu, Executive Secretary, Reneawable Energy Association of Nigeria, based in Abuja, Nigeria, with Kunle Aderemi & Tolu Ashimolowo, she tries to proffer alternative solutions to light up Nigeria.

Is the alternative energy sector really alternative?
100% it is, don’t doubt it! We can use various words interchangeably, but alternative refers to the ways that we are going about trying to find energy solutions that are not fossil-fuel based. Wind, solar, hydroelectric and the rest fall into the alternative energy definition. For us at REAN, alternative is renewable.

How long do you think it will be before renewables becomes a growing mainstream market in the Nigeria?
I wish I had a crystal ball. I will say though, that a clean energy future is achievable, but it needs concerted and unrelenting effort by everyone. Government needs to drive the push with favourable and supporting policies and legislation, while stakeholders in the private sector need to collaborate to take renewable energy from dream to reality. It is imperative for a sustainable future. Progress has been made decentralised renewable energy solutions are gaining traction and helping to reach remote and unserved communities, literally transforming lives.

Globally, steps have been taken to set the ball rolling, from the Kyoto Protocol in the 90s aiming for member states to commit to reducing their greenhouse emissions to the Paris Agreement setting goals of reducing total global warming to less than 2%, global agreements have shown that many of us recognise the need to address climate change.

Nigeria, along with regional governments have set renewable energy targets: Vision 30:30:30 aims to achieve 30,000MW of electricity by 2030 with renewable energy contributing 30 per cent of the energy mix. As reports estimate that oil will run out in about half a century, renewable energy needs to be encouraged to become mainstream.

Perception in Nigeria of renewable energy is changing; scepticism is reducing as awareness increases but there is still a way to go before renewable energy takes over from fossil fuels.
Although, in the long term, renewable energy is more cost-effective, huge capital costs have hindered its growth. Nigerians understandably do not want high utility bills. Storage is still a challenge. With solar energy, what happens during the rainy season? With wind energy, what happens when wind capacity is low? Solutions potentially add to the cost. These issues hamper acceptability.

Ongoing research is needed, continuous awareness drives, encouraging young people to go into the renewable energy business will see it thrive. Where people can see the benefit not only as a solution to decreasing the energy benefit but as a viable business opportunity, the sector will continue to grow. New technologies and increased deployment will drive down costs, making the sector more investor friendly. All of these will contribute to keeping renewable energy at the forefront of solving the energy emergency in Nigeria. Technology will also drive the process.

In the scheme of things, how is Nigeria ranked in terms of Renewable Energy structure, processes and procedure and acceptability by the population?
In all of these, it is a work-in-progress. Currently Nigeria generates only a small amount of its energy from renewable. The Renewable Energy sector is an evolving one. Some lessons are being learnt on the job by technical people, developers, regulators and other stakeholders. This is normal for any growing sector. You tweak as you go along while also keeping the end goal in mind – access to power in a well-regulated sector. There is a structure in place, it’s not perfect but very few things are. Processes and procedures, I would put in the same category. We have processes that have been well thought-out, and they might not be a best fit now. Other processes will better stand the test of time. Nigeria might not be the continent’s leader in renewable energy, but it is a very exciting sector in which activities are ramping up. This has increased awareness of the sector from say. Ten years ago. Now you will hear of the groundnut seller in the heart of rural Kano who can shell the nuts well after dark because she has subscribed to a PayGo solar home system. In peri-urban areas, solar lamps are in widespread use. We no longer have to expend as much energy to convince Nigerians that renewable energy is real.

Can renewables meet their potential in Africa?
Can they? Yes. Will they? It won’t be a stroll in the park. Across board, we must be deliberate about what we want to achieve. Africa’s erratic development is directly tied to its energy shortfall. An estimated 600 million sub-Saharan Africans lack access to electricity. Without large scale access to power, development will continue to be stifled. The continent’s current total power capacity is 147 GW. To put this in perspective, this is comparable to Belgium’s total capacity. The potential for renewables is huge and can be met.

The journey has started. Adoption of solar energy solutions across Africa has increased with government and the private sector supporting various initiatives to encourage deployment. In Nigeria, the Rural Electrification Agency (REA), spearheaded by a dynamic team, is among other electrification projects, implementing the Federal Government’s Energizing Economies Initiative (EEI.) EEI seeks to encourage deployment of off-grid, power solutions to MSMEs in markets and industrial areas through private sector developers with 70% of them being renewable energy based. They estimate that this will contribute to reducing greenhouse carbon emissions by 25,000 metric tonnes annually.

REAN members are deploying clean energy solutions across the six geopolitical zones; pico solar, clean cooking stoves, mini grids, all are contributing to the growth of the sector.
Scaling Solar is another example. This was set up by the World Bank and has helped in Ethiopia, Madagascar, Senegal and Zambia. The Grand Renaissance Hydroelectric Project in Ethiopia has an installed capacity of 6,000MW. Definitely, Africa is working towards meeting its potential. We continue to support the efforts in our different nations and the outlook is positive. Make no mistake, a renewable revolution is underway.

What are the challenges facing the African Energy Sector?
The challenges present opportunities. The birth of new ideas comes from trying to solve problems. The overarching problem is of course a lack of access to electricity. This presents many challenges in the areas of healthcare, business and social factors. Without reliable electricity, businesses quite simply cannot run efficiently, which in turn influences a country’s economy.

Aging equipment and lack of maintenance along with underinvestment have contributed to Africa’s energy predicament. The sector has not been able to develop in line with the population trends or demands. There is now an urgent need to fix these problems. That itself is a challenge – what is the best solution to accelerate access to electricity? It is an opportunity for government to examine what needs to be done and how best to achieve it, especially by collaborations as it cannot be sorted out without input across board.

Overreliance on oil in Nigeria contributed to an apathy in seeking other solutions. Continent-wide now, the energy sector can not be left to slide further downhill. Challenges of funding need to be addressed, policies need to be improved and enforced. All these will contribute to an improved energy sector.
What are the opportunities in Africa’s Renewable Energy Sector

Opportunities are closely linked to challenges as I earlier mentioned. An opportunity presents itself to go into the business of getting electricity to the African consumer. Many have taken up this challenge. With policies supporting decentralised renewable energy, electrification presents a big chance to enter the renewable energy space as an entrepreneur.

Technology will also be a large part of the electrification process. As the world moves increasingly to tech solutions, the same will translate to the renewable energy sector. Software developers, mobile payment solutions and data management will all play their part in the renewable energy value chain. Along the way, micro entrepreneurship gets a boost. Last mile distribution presents an opportunity to empower a community – make them payment agents or have them become distributors of renewable energy products and they gain earning power.

Opportunities are everywhere. For example, a big problem that farmers face is getting their produce to off takers with minimal wastage. Imagine the difference that a single solar refrigeration van would make to that farmer. Now multiply that several times over to try to appreciate the value-add to the various communities.

What is the Future of Renewable Energy in Africa?
We can already see the growth across the continent. To borrow from the International Energy Agency’s report. Renewable energy will make up almost half of sub-Saharan Africa’s power generation growth by 2040.
There will also be more sustainable models with Africans finding sustainable solutions and less reliance on grants.

How far has REAN influenced Renewable energy policies in Nigeria?
We want to drive the development of the sector, that forms part of our mission and that is what drives all our activities. Our members are clearly well-positioned to understand first-hand what works and what doesn’t. Their experience is vast, many of them having been in the sector before renewable energy gained such visibility. We leverage on our vibrant and engaged membership to liaise with government at all levels and with stakeholders. We start and drive conversations for the purpose of seeking sustainable solutions. When the new tariff regime of 10% on solar components was imposed, we spearheaded the 0% duty drive, engaging with Customs, ministries of Finance and Power among others to make a case for a waiver. That effort has since morphed into us being part of the multi-stakeholder group involved in the harmonising of the Renewable Energy Bill. When it comes into law, we will be happy to know how big a part REAN played in making this happen. I must emphasise that it is a collaborative effort. We cannot do it alone and, in any case, REAN is an association. The more we all work together towards a common goal, the more progress we will make.

Do we have Renewable energy products & Equipment manufacturing plants in Nigeria?
Growth in the renewable energy market means that there has been an increase in demand for more products, more equipment and more expertise. After sales service plays its role too. Manufacturing in Nigeria is still relatively expensive. More needs to be done to boost the manufacturing sector that has seen a gradual decline in the last decade or thereabouts. Presently, the cost of local manufacturing is a barrier to having more being done locally. Again, this presents an opportunity for the enterprising. Those at Auxano Energy, one of our members is already wading into that territory by assembling solar components. With government support by way of promoting an enabling business environment, they can become manufacturers serving a potentially huge market.

What is the future of Renewable Energy in Nigeria?
Very bright! I use the word deliberately because the future I wish and that we are all working towards will be one that will include clean, reliable and affordable power. The future of renewable energy will be very much led by technology. It must be, if access to electricity is to be achieved in the within the timelines that we have set as a country.
Intensive efforts will see the sector thrive, but there must be no sitting back. There is a lot to be done to get to the Promised Land.
Renewable energy will be crucial in improving socio-economic development for each Nigerian.

What will you want to be put in place to make Nigerians focus more on renewable energy?
Private sector-led investment into the sector is high on the Wishlist. Varying ways in which this can happen should be explored and it’s encouraging to see that green bonds are mentioned more widely. In an ideal world, there would be an increase in local currency financing. Without long term affordable finance, the sector will be stunted in its growth; scaling up will be difficult. De-risk, de-risk, de-risk.
Legislation supporting the growth, entrenched into law and also fit for purpose for the future.
Continuous education of the public benefits of clean and the cost effectiveness. Also the opportunities open to every Nigerian.
A regional certification scheme that takes care of quality assurance. Increased confidence in the sector will bring increased acceptability.
Capacity building is key too, to encourage a high standard of skills and to boost job creation.

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