It has been a busy couple of months for Nigeria as it strives to give its failing power system a renewable energy fix to eradicate the nation’s intense energy poverty.
Not only did the long-awaited privatization of the state power company go into effect, but the fourth Nigeria International Power Expo and Conference was abuzz with the promise of electrifying rural Nigeria with new off-grid projects.
Nigeria’s National Energy Council also announced a joint program with the Germany to deploy nearly 500 megawatts of solar power capacity across nine states in the northern part of the country.
Earlier in October, Enphase Energy, Inc. announced its Clinton Global Initiative Commitment to Action by partnering with Beacon Power Services to provide an innovative solar energy micro-grid system in Abuja. And winners for the initial funding round of the US “Power Africa” Off-Grid Energy Challenge to increase the delivery of off-grid energy to marginalized populations in Nigeria were announced.
The timing could not be better.
Demand for electricity in Nigeria has always exceeded supply due to the failure of the publicly owned and operated electricity system to meet Nigeria’s power needs. Currently, Nigeria generates only about 4,000 megawatts of power for a country of 170 million people.
The National Electric Power Policy of 2001 led to the National Electric Power Policy and President Goodluck Jonathan inaugurated his Power Sector Roadmap in August 2010 in order to change from a public driven power economy to a private one.
With that, Nigeria’s state electricity provider Power Holding Co. of Nigeria passed into the private hands of 15 firms in October to handle generation and distribution across different parts of the country.
The $2.5 billion sale was considered a “milestone” in the privatization effort intended to increase electric power reliability.
USAID Mission Director Michael Harvey said “the U.S. will continue to partner with Nigeria to advance a seamless transition from public to private sector management of the power sector to ensure that the Nigerian people have access to electricity.”
During the fourth Nigeria International 4th Power Expo and Conference, held October 17-19, Minister of Power Professor Chinedu Nebo told attendees that Nigeria was capable of generating 160,000 megawatts before the end of 2014, noting that “Nigeria produces and consumes 4,000 megawatts of electricity, only 2.5 per cent of what South Africa is producing and consuming.”
Ironically, Nigeria is Africa’s top fossil fuel producer and holds the world’s seventh largest gas reserve, but only generates enough electricity for a few hours a day in the few regions that are connected to the grid while some 80 percent of the rural population go without grid access at all.
In many rural areas, “self-generation” using diesel generators is the norm, estimated at around 6,000 megawatts. In fact, Nigeria is reported to be world’s largest importer of diesel generators.
It is hoped the new solar and other renewable projects will address not just intense energy poverty in Nigeria, but also to reduce “black carbon” pollution caused by the use of diesel generators.
Nebo told the Power Expo that the ministry was partnering with investors to ensure that rural areas not connected to national grid were connected to renewable sources of electricity and that would have multiplier effects on increasing development, income, standard of living, and job opportunities.
German Solar Coming to Nine States
A few days after the Power Expo, National Energy Council Secretary Alhaji Ibrahim Njiddah announced at the annual conference of the German-Nigerian Energy-Partnership in Abuja on October 21 that Nigeria had finalized details to work with Germany solar firms to bring 420 megawatts of solar projects to Nigeria within five years.
Nigeria and Germany also extended the Nigerian-German Energy Partnership (NGEP) for a further five years, which was originally implemented in August 2008. These new solar projects will focus on the nine Nigerian states of Adamawa, Bauchi, Benue, Borno, Gombe, Kaduna, Kano, Nasarawa and Sokoto.
Each of the states have requested a 30MW solar plant, with the exception of Kano and Nasarawa who are hoping for three or four plants scattered across their two states. Each plant is estimated to cost between $50 to $60 million.
To facilitate funding, the Infrastructure Bank Plc was appointed by the Nigerian government to “bring together all the developers who have indicated interest in developing power plants and all the state governments that have indicated interest to have solar power in their states.”
These new plans add to already existing renewable projects that are in the works.
Synergent Nigeria – a partnership formed in 2009 between US Synergent Ventures and local energy suppliers to create Synergent PowerShare Nigeria, Ltd. – announced its first commercial project will be in Kaduna City, Kaduna, to establish a 50MW “Solar Development Corridor” aimed at “helping to reduce the costs, complexities and time frames typically associated with building solar projects one-at-a-time.”
Synergent is also constructing a Community Microgrid Pilot project in Abuja and hopes for broad-scale deployment across all 36 states. Once completed, another 1MW Community Microgrid Project in Cross Rivers will serve as “a model for the South-South region, and will expand into other States as quickly as we can initiate agreements,” according to the company.
Meanwhile, the Bauchi state government has signed a Memorandum of Understanding (MOU) with Nigeria Solar Capital Partners to establish 100MW solar farm at Zongoro in Ganjuwa. It is a joint venture between Industry Capital, a US-based private equity group with over $1.4 billion in assets under management, and Dutch-based developer Gigawatt Global.
Over the next several years, NSCP intends to push for some $1 billion dollars in investment for development and management of utility-scale solar farms in Nigeria. Their goal is up to 500MW of utility scale solar in Nigeria by 2020.
Upgrading the Grid
There are currently 23 grid-connected generating plants in operation in the Nigeria, with 83 percent being thermal based and the rest proving hydro-power to urban areas.
But according to an October 2012 U.S. Energy Information Administration report, Nigeria experienced power outages on average of 46 days per year between 2007 and 2008, with many outages lasting up to six hours.
This electric grid operating inconsistency has created uncertain economic conditions for businesses.
To deal with the grid issue, California-based Enphase Energy, Inc. announced its Clinton Global Initiative (CGI) Commitment to Action and has partnered with Beacon Power Services to provide a pilot project of an innovative solar energy microgrid system at Sundry Foods, located in Abuja.
“Enphase is proud to have created a Clinton Global Initiative commitment to help address energy challenges in Nigeria and reduce their dependency on polluting diesel generators,” Raghu Belur, co-founder and vice president of Enphase Energy, said in a written statement.
Recent advances in micro-inverter and smart metering technology has allowed solar micro-grids to quickly become a cost-effective way for powering whole villages or even clusters of villages in other developing countries, according to the company.
Enphase also says its micro-inverter technology “is designed to allow local, non-specialist electricians and laborers to install and maintain all portions of the electrical system.” Enphase Energy and the Nigerian government hopes the microgrid demonstration project will prove the scalability of a solar microgrid system in a country.
Stepped-up Renewable Efforts
Nigeria is one of six targeted countries under US President Barack Obama’s “Power Africa” initiative announced in June, a $7 billion plan over five years to African companies and organizations providing off-grid solutions that use renewable resources “to double access to electricity in sub-Saharan Africa.”
The first Request for Proposals for the $2 million, three-year Power Africa Off-Grid Energy Challenge closed October 16.
The U.S. African Development Foundation teamed up with GE Africa to launch the initiative in Nigeria – and Kenya – “to expand markets, test innovations, and leverage financing to increase the delivery of off-grid energy to marginalized populations.”
The initial funding will award up to $100,000 each, which will be followed by an additional $1.5 million in grants over the next two years to and power economic activities. GE also signed an MOU with the Nigerian Federal Government earlier this year to help develop an additional 10,000 megawatts of power.
According to Shari Berenbach, President and CEO of the United States Africa Development Foundation, than 50 percent of the 150 applications involved solar energy, while rest were based on hydro, wind, and bio-fuels, among others.
“The judges carefully evaluated more than 150 applications to arrive at the eventual winners. We looked out for applications that demonstrated new business models to deliver sustainable, renewable energy to underserved, marginalized populations,” said Berenbach.
The winners of the $100,000 grants were announced at a November 21 event held in Lagos, Nigeria, and include Trans Africa Gas and Electric PLC, GVE Projects Limited and Afe Babalola University emerged in Nigeria.
GVE Projects plans an 18KW solar-powered mini-grid to reach 140 homes in the Egbeke community of Rivers state. Afe Babalola University plans to generate 2.5 megawatts of hydro-electric power that will serve over 10,000 members of the university community.
The Trans Africa Gas and Electric PLC’s project is a “standalone cold storage facility to allow farmers in Jos to cool and store their produce before bringing it to market.” The three Kenyan project winners are Solar World (E.A) Limited, Afrisol Energy Limited and Mibawa Suppliers.
Besides the US Power Africa initiative, Nigeria has been getting plenty of green energy financial help from a variety of other international sources this year.
In July, the European Commission announced $34.7 million in support to improve the renewable energy policy in Nigeria through the newly launched Energizing Access to Sustainable Energy (EASE) program with a focus on the use of renewable energies by small and medium enterprises.
Run in partnership with a $6 million World Bank contribution and $11.6 million from the GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit), the EASE program will also address the deforestation from cutting trees for fuel wood, a main energy source for the majority of the population.
“At the moment, 80 per cent of the population in rural Nigeria have no access to electricity at all. Our overall objective is to help decrease this number significantly, but it is also important to improve the wellbeing of those who do have access, since they often suffer from inadequate lightning to carry out their housework and from inhaling toxic smokes due to unmaintained cooking stoves,” said European Commissioner for Development, Andris Piebalgs.
Earlier in February, the Climate Investment Funds (CIF) announced an agreement to provide Nigeria with $50 million to support an African Development Bank-supported program designated to stimulate alternative and efficient ways to generate electricity and to reduce dependence on energy sources which contribute to greenhouse gas emission.
The increased announcement of renewable energy projects this year are in line with the Nigerian Power Reform Act requirement that 5 percent of power generation must come from renewable energy by 2020.
And according to the Nigerian government, President Goodluck Jonathan hopes that fast-tracking the development of the nation’s electricity sector will help leapfrog Nigeria to the top 20 most developed economies in the World by the year 2020.