Nigeria’s Race for Sustainable Energy Sufficiency: Installs Africa’s Largest Hybrid Solar Plant

Nigeria’s Race for Sustainable Energy Sufficiency: Installs Africa’s Largest Hybrid Solar Plant

7.1 MW Hybrid Solar Plant installed in BUK, Kano by REA

Energy sufficiency, had over the years, remained a mirage in Nigeria, as reports had stated that over 40 per cent of Nigerians did not have access to electricity; while based on total installed capacity, only 0.06 megawatts of electricity was available for 1,000 Nigerians.

This article explores the country’s quest for energy sufficiency, the challenges and measures put in place by the Federal Government, multilateral institutions and private sector players to surmount the country’s energy challenges.

made a cornerstone of the Sustainable Development Goals (SDG), signed in 2015 by 193 member states of the United Nations. Nearly every one of the 17 goals under the Sustainable Development Goals (SDG) is anchored directly or indirectly on the availability of energy – be it reduction in poverty, improvement in education outcomes, health, safe water, quality of air, and other important SDG outcomes. Under the SDG, an important area of focus is the SDG 7.1, which is ensuring access to affordable, reliable and modern energy for all by 2030, by providing universal access to electricity and clean cooking. International Energy Agency (IEA), in its World Energy Outlook for 2017, stated that achieving SDG 7.1 would require bringing electricity to the remaining 1.1 billion who are still without electricity and reaching

the 2.8 billion currently without access to clean cooking facilities. However, with the political will, right policy mix, and sustained investment, the IEA noted that achieving modern energy for all by 2030 is possible and brings with it big benefits for minimal expenditure. It had been stated that energy is a vital factor of production in any economy and an affordable access to sustainable energy is one of the key drivers of a global economic system that is sustainable.

In addition, it had been agreed that energy efficiency and access are imperative to mitigate climate change, improve energy and grow economies while delivering environmental and social benefits.

Time and again, it has been proven that energy efficiency and access are also relevant in achieving the sustainable development goals to meet energy needs, from the perspective of affordability, reliability and sustainability. Coming home, it is a known fact that energy had played a very critical role to Nigeria’s economic development and in the country’s development process. The petroleum sector provided the fiscal backbone of the country since 1970s, accounting for over 70 per cent of government revenue, and over 95 per cent of export and foreign exchange earnings. Between 1960 and 2015, the Nigerian Association for Energy Economics (NAEE) disclosed that Nigeria earned over $1.25 trillion from petroleum exports, adding that the petroleum sector supplies the natural gas that

drives the country’s electricity sector, the fuels for our vehicles, and generators, as well as the fuels to meet the cooking needs of many Nigerians. It noted that the power sector contributes substantially to the energy needs of the residential, industrial and commercial sectors, explaining that much of the infrastructure in the country today were built from the proceeds of the petroleum sector. “In fact, we can safely say that Nigeria’s modern history is inextricably linked to the story of the petroleum sector,” NAEE noted. NAEE further stated that globally, the world is entering into a new energy transition that will relegate fossil fuel to the background. According to the group,

“t h e c om bi n a t i o n of breakthrough in technology, improved batteries, huge private investments in energy efficiency and modern energy technology, international energy and climate change protocols and agreements as well as increasing concerns about the future of the earth, is forcing a new consensus among energy users and producers”.

It stated that Nigeria should not see the impending new energy world as a threat but that it should position itself to be an important player.Many oil rich countries, NAEE noted, are already planning for the post-oil era, including Saudi Arabia and Norway, adding that in fact, no one country, no matter how powerful can reverse the trend of the impending energy transition. However, in 2017, it was reported that over 60 per cent of the 1.3 billion people who lacked access to electricity globally are resident in Sub-Saharan Africa (SSA), where six out of 10 people lack access to electricity. A World Bank report noted that Nigeria, being the most populous nation in Africa, accounting for nearly 20 per cent of the sub-region’s population and boasting of having the largest reserves of energy resources, regrettably, lags behind several SSA countries in terms of electricity access.

Additionally, Nigeria’s population compares relatively with those of Brazil, Pakistan and Indonesia. However, within the same period, data from the World Bank shows that Nigeria is least amongst these nations in terms of electricity access. Furthermore, in 2017, according to data from the Trading Economics, over 40 per cent of Nigerians do not have access to electricity. Comparatively, the data shows only 20 per cent for Brazil, less than one per cent for Pakistan and 10 per cent for Indonesia.

Prof Wumi Iledare, Director, Emerald Energy Institute

“According to the United Nations standard, a nation is developed if it meets at least, one gigawatt of electricity, which is 1,000 megawatts, of electricity generation and consumption for every one million heads of population, about one megawatts per 1,000 people”.

It was reported that based on total installed capacity, only 0.06 megawatts of electricity is available for 1,000 Nigerians, leaving much to be desired when compared with those of Angola (0.21MW/1000 people); Algeria (0.45MW/1000 people) and 0.82MW/1000 people for South Africa. Former President of NAEE and Chairman, Oil and Gas Economics and Management, University of Cape Coast, Ghana, Professor Wumi Iledare, maintained that Nigeria is seriously challenged by the inability or obvious lack of capacity to turn its huge energy potentials both renewable and nonrenewable into realized energy to support rapid economic growth, job creation and poverty reduction. He noted that energy security is a serious problem, especially as Nigeria remained a net importer of refined products and suffers from significant power supply deficit. He said, “Nearly fifteen years after electricity sector reforms began and in spite of the various institutional changes, regulatory and policy reforms that have taken place, as well as the billions of dollars of public and private investment that went into the power sector, electricity sector remains seriously challenged in Nigeria.

30 Majorwaves Energy Report SEPTEMBER 2019, Vol 2 No 6 “The entire segments of the value chain are bedevilled with one problem or the other. Both the formal and the informal sectors continue to run on private generators, with attendant avoidable huge economic and non-economic costs. “The energy investment-GDP ratio is too low and inefficiently allocated to support the energy infrastructure that the country requires to drive sustained economic growth. Hence, the fall back solution that we have adopted cannot even be ranked as second best solution, because it is totally unacceptable and incompatible with global energy transition. “The recourse by energy consumers in the industrial, commercial and residential sector to fossil fuel fired private generators, many of which are old, energy inefficient and major sources of noise and air pollution must be phased out in timely manner as reliable, affordable and modern energy sources become available.” He explained that for an emerging economy like Nigeria, access to affordable energy and economic diversification had become intertwined as a matter of urgency in the national energy policy debate. He added that limited access to electricity is inextricably linked with diminished social and economic status of a nation. He said, “For instance, studies have shown that countries with low access to energy tend to have low access to modern energy services. Additionally, lack of access to modern energy services tends to limit household purchasing power potential from income generating opportunities. “Thus, without access to adequate electricity and modern forms of energy services, it may be difficult to evolve out of low income economy, promote economic growth and employment as well as support human development.” It has been estimated that between 2017 and 2020, Nigeria will need over $1.6 billion to develop or complete critical infrastructure in generation, transmission and distribution of power and another $14 billion to start and complete critical projects in the oil and gas sectors. Unfortunately, the country is faced with paucity of funds, as currently, multilateral institutions and Development Finance Institutions are shying away from funding fossil fuel exploration and other key energy projects. However, experts are unanimous in their view that with the right incentives and policies, implementation of pro-market policies, the private sector can take a large chunk of these investments off the government. However, the issue of credibility and seriousness of government is very important. Perhaps also is the political will to let go some decrepit downstream assets. A number of challenges have been identified by stakeholders in Nigeria’s quest to attain energy sufficiency, some of which include infrastructure cost and inadequate provision for capital expenditure; difficulties experienced in the conduct of business in the country; lack of respect for the sanctity of contract and absence of critical professionals and requisite skill set. To guarantee energy sufficiency, former Group Managing Director of the NNPC, Dr. Maikanti Baru, stated that stakeholders need to at certain times, junk their old appliances and procure newer, energy efficient ones; install smart metres that offer opportunity to appropriately monitor a building’s energy use for necessary assessment. He further stated that stakeholders should support the construction of intelligent buildings that incorporate renewable energy technologies; design neighbourhoods in a manner that offer accessible options of walking, biking and public transportation. “Use energy efficient means of moving products, such as pipelines and rail services; and we also need to have a behavioural change to use energy efficiently,” he noted. On his part, Professor Iledare declared that “ t h e c o u n t r y m u s t develop energy policies and programmes that state clearly that the country would reduce its dependence on fossil fuel not just as a source of economic diversification, but as a new economic and energy strategy for development”. He added that the country must develop or leverage on new technology to drive the transition, noting that this is where efforts would be needed to retool Nigeria’s education system, and give opportunities to non-government actors to invest in innovative technologies that can meet the need of Nigerians, especially those outside the national grid He said, “We should establish strong institutional and infrastructure system to support budding entrepreneurs and others who are willing to invest in the new technology. This includes finance, technical assistance, government patronage, market based incentives, and supportive institutional and legal framework. “We must revise our housing codes to promote energy efficiency, develop intermodal transportation system for highly populated cities in the country, expand access to cooking gas, improved cooking stoves, and modern energy practices, among others.

Damilola Ogunbiyi, MD, REAN

“We must utilize our rivers as sources of small hydro power and irrigation solutions to support agriculture in the rural areas where over 40 per cent of Nigerians continue to live. This will provide so much multiplier effects on socio-economic living standards of the people. “The government must mainstream modern energy and energy transition into its development agenda. Energy mix of the country must give adequate prominence of non-fossil energy sources including solar, wind, hydro, biogas, and other forms of renewable energy available in the country.” However, the Federal Government is taking the quest toward ensuring energy sufficiency to new heights, especially with the commissioning of the largest off-grid solar hybrid power plant in Africa at Bayero University, Kano (BUK) under the Energizing Education Programme (EEP).

With the project, 55,815 students and 3,077 staff now have access to electricity supply from the university’s 7.1 megawatts (MW) solar hybrid power plant. The Bayero University commissioning included the launch of 11.41 kilometres of solar powered street lights as well as a world class renewables training centre. Under implementation by the Rural Electrification Agency (REA), the Energizing Education Programme (EEP) is a federal government intervention focused on developing off-grid dedicated independent power plants, rehabilitating existing distribution infrastructure to supply clean, safe and reliable power to 37 federal universities and seven affiliated university teaching hospitals.

“The BUK project is the second to be commissioned under Phase 1 of the Energizing Education Programme that would deliver clean and sustainable energy to nine federal universities and one university teaching hospital”

in the next four years, using solar hybrid and/or gas-fired captive power plants. Speaking on the project, Managing Director of the Rural Electrification Agency, Mrs. Damilola Ogunbiyi, stated that the project is the largest off-grid solar hybrid power plant in Africa, adding that with it, students and staff of Bayero University, Kano can now experience learning and teaching in a safer, cleaner and more conducive academic environment. Also speaking on the impact of the BUK solar hybrid installations, Mr. Evangelos Kamaris, Managing Director, METKA West Africa Limited, the EPC contractor, stated that the state-of-the-art solar hybrid power plant would result in carbon dioxide savings of 108,875,120 pounds. Commenting on the EEP programme, Engr. Sale Mamman, Minister of Power, said, “The Ministry’s power policy specifically targets education to ensure that all federal universities, to begin with, have access to reliable electricity. Notably, the Energizing Education Programme was designed to involve students from project inception for project sustainability.” On his part, Governor of Kano state, Abdullahi Umar Ganduje stated that “Kano State is committed to fostering technical and practical training; therefore, this programme is strategically aligned to our state level job creation and capacity building objectives. Furthermore, as one of Nigeria’s commercial centres, Kano state prides itself in nurturing private sector engagements.”

In his own speech, Vice President Yemi Osinbajo, noted that the programme aligns to the administration’s Next Level Roadmap and upholds the Federal Government’s adherence to global best practice in the provision of cleaner sources of energy. He said, “The Energizing Education Programme is strategic to fulfilling Nigeria’s commitment to the Paris Agreement on Climate Change as we aim to reduce Nigeria’s carbon footprint using renewable energy technologies, in line with the Federal Government’s mandate and unwavering efforts to increase renewable energy.”

Apart from the efforts of the REA,

United States Agency for International Development, USAID-funded Power Africa, had assisted the Federal Government with agreements to move the Qua Iboe gas project closer to financial close. Power Africa is also assisting with agreements on several solar projects that would help Nigeria diversify its energy mix. It helped Nigeria’s first private Independent Power Project, IPP, the Azura Edo Project, reach financial close in 2015, including a $50 million investment by the Overseas Private Investment Corporation (OPIC). The Azura plant became operational in 2018. In addition, through Power Africa, the USAID and the U.S. Trade and Development Agency (USTDA) disclosed plans to improve commercial operations and reduce losses at five electricity distribution companies — Abuja, Benin, Eko, Ibadan, and Ikeja.

The programme also supports off-grid options as noted in the $15 million OPIC loan, via which Lumos Incorporated is deploying rooftop solar panel kits to approximately 70,000 residential and small commercial customers in Nigeria, using a lease-to-own business model. Furthermore, in partnership with General Electric, the U.S. African Development Foundation (USADF) and others, it has awarded nine $100,000 grants to entrepreneurs for innovative, off-grid energy projects in Nigeria. Providing support to the Nigeria Electricity Regulatory Commission (NERC) through a partnership with the National Association of Regulatory Utility Commissioners (NARUC), it avails guidance on regulatory practices and tariff setting. Power Africa also provides planning support to the Transmission Company of Nigeria (TCN) in trying to attract new investments into Nigeria’s transmission network.

It is also assisting the Ministry of Petroleum Resources to structure and implement a program that will attract competent third-party off-takers to invest in the capture and utilization of gas flares using tested technologies. This work in support of the Nigeria Gas Flare Commercialization Program (NGFCP) will improve access to finance for gas flare projects to achieve quicker financial close through incentives to investors and strengthen capacity of regulatory agencies to monitor and sustain the implementation, as well as subsequent bid rounds.

These, among other measures, are expected to impact Nigeria’s energy

sufficiency positively, helping it pursue its industrialization programme and economic growth.

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“It’s not about ‘Nigerianising’ local content, it’s about ‘Nigerianising’ in-country production of oil and gas.It doesn’t matter where you come from, please, bring this investment, make it in-country, employ Nigerians and we would give you the chance”. – Simbi Wabote, E.S, NCDMB

And we are seeing that it’s true, so why would we not invest or bring in investors? Why would we not take the bull by the horns and take these loans or take these facilities and believe by the end of the day, we would be patronised as a Nigerian company? It is not just because we are Nigerians, but that we are capable of delivering in-country production with a standard consistent with best practice found anywhere in the world. Those are the key ones we are able to do, such that everybody would continue to be proud of the NCDMB. I am absolutely proud of his achievements, his management team, and his Board. He is doing a fantastic job. Basically, we are pushing the limit because we believe NCDMB is doing a fantastic job and I do not mind taking any test on proving in-country production to prove anything the NCDMB supports; and that is the amount of faith I have for that team. I recall the Executive Secretary asking for when to inspect our facility, and I simply told him to come in 24 hours. By Feb 22, 2017 he visited our facility and after inspection said, and I quote: “Based on what I have seen at Coleman and other cable manufacturing yards in Nigeria, today we make a policy statement: there will be no more importation of cables by IOCs into this country!”

He recognised that exceptional investments have been done by Nigerians. Since then, they have fought the fight for cable with a lot of passion! The E.S fights for you as a Nigerian, and believes everyone should be given a chance. People only need that assurance that there’s an institution at the helm of affairs, which will fight for them if they did the right thing, without having to go begging. That’s all we need, and he’s made that available to us.