Incentivising renewables in NigeriaMay 17, 2021
Sunny Akpoyibo, president of the Council for Renewable Energy (CREN), talks to The Energy Year about how the government is incentivising renewables in Nigeria, the role of solar solutions in the country’s electrification and the importance of capacity-building. CREN advocates for the adoption of renewable energy in Nigeria.
At what pace and by what means is the federal government incentivising renewables in Nigeria?
The federal government is promoting diversification through the promotion of gas as the first step to move away from crude oil. Nigeria has already started building capacity so that we can catch up with the energy transition. If we look at the government’s policies on renewable energy, they have been encouraging renewables from a federal, state and local level.
Truth be told, renewables are the quickest way to generate energy. With solar, for instance, the sun is there and you can generate power immediately. This is the solution to sustainable development, the gateway to the future.
Moreover, if we look at Nigeria’s strategic sustainability plans, the federal government has launched a scheme including the deployment of 5 million solar home systems (SHSs) for under-served and under-connected rural communities. Firstly, this policy is a clear pledge to uphold Nigeria’s Paris Agreement commitment to reduce its emissions by 20% by 2030. This initiative will be very important in the reduction of CO2 levels in Nigeria. Secondly, the policy will create around 25,000-30,000 jobs for the youth – a clear indicator that renewable energy is invaluable to socio-economic development and prosperity.
How can solar solutions contribute to Nigeria’s electrification, and what challenges are hampering the development of the sector?
Off-grid and mini-grid solar systems are a wonderful solution for powerless regions in Nigeria. Electrification rates in this country stand at around 45%, which means that we need to find urgent and plausible solutions. Connecting the grid to remote communities that are under-served or cut off involves dealing with many infrastructural and financial challenges. However, mini-grid systems are easy to deploy, and are the fastest way to power under-served communities. The SHS initiative is a clear example of Nigeria’s commitment. Beyond this, hybrid solutions are also on the table – solar installations with gas generators as a backup.
The challenge here lies in procurement. Most people have little or no knowledge of this particular industry. While many may understand the potential of the market, there is a lack of technical skills. As a result, companies will procure products without knowing the technical specifications. One can buy panels, batteries and inverters from China but really not know what one is buying. The first thing Nigeria needs is capacity building. We need to train and develop capable installers. Once know-how is achieved, their procurement systems will change. It’s important to understand what we can procure and what we can design.
An important step some associations came up with was the creation of required certifications for setting up a solar company. On a different note, funding will not be so much of an issue, as renewable energy is one of the fastest-growing industries in the world, especially in Africa. Sooner or later, banks will start creating credit lines to fund these types of projects.
What are some of the factors stopping Nigeria from experiencing a renewables boom?
The Renewable Energy Master Plan, which aims to make renewable energy account for 10% of Nigeria’s energy mix, has been in place since 2015, but what we lack is practical implementation. Another matter we must work on is awareness, which is equally important. In this quest, we all have an important role to play, especially industry drivers like institutions and associations. Pilot schemes would be important to demonstrate that renewables actually work. As mentioned, technical know-how is crucial when it comes to creating in-country capacity.
Also, different international organisations seem to pour money into renewable energy projects but industry players neither feel nor see it. They should bring in renewable energy banks who, at the end of the day, do their due diligence, and help to build capacity among local players. The continent has many energy challenges, but these can be transformed into opportunities. Getting out of poverty starts with energy, which is essential for economic development.
To what extent is capacity-building the key to unlocking the array of renewables opportunities?
Capacity building is an obstacle, even in the area of solar, which is relatively simple given the availability of sunlight. This means that it is more difficult to make other renewable alternatives thrive, such as wind energy, as they require many more studies, they are more expensive and the logistics to bring wind components such as turbines and blades to the site can be torture. This is not to mention that you need constant wind to generate electricity. The same goes for geothermal, which has specific exploration procedures and drilling operations.
Further capacity building is thus needed to make these other forms of energy viable in Nigeria. The market and potential are definitely here, with a choice between geothermal, solar, wind and biomass. What Nigeria needs now is skilled entrepreneurs in these areas. In this regard, a lot of companies commit to CSR. They could actually channel their CSR efforts into giving out vocational training in the area of renewables, and as a consequence they would be promoting the future employment of young individuals.
We all need electricity to power our lives, and the country needs power to prosper, so capacity-building in this area is elemental. The energy is there; we just need to know how to capitalise on it.
What steps has CREN taken recently to support the renewables sector?
We are now working on a programme as part of which all our association members will need to have a specific certification. This will build trust and increase the confidence of potential investors as well. At the same time, we are trying to focus on larger projects.
For example, earlier this year, a member of CREN designed, procured, built and commissioned the first solar tunnel in sub-Saharan Africa. The tunnel provides energy to major streets as a mini-grid. It has a central storage system that is monitored remotely to provide energy for a smart city – around 2,000 solar street lights.
We have designed three solar tunnels in Kwara State, Ilorin, which are functioning. The impact is triple-faced: social, economic and environmental. The project has been such a success that the African Development Bank is interested in replicating it on an inter-state level.
The trend now is focused on mini-grid and solar home systems, as a means to provide captive energy. Many of our members are excelling in this space, and we are giving mini-grid training to ensure players know how to choose a site, design and manage mini-grids, do O&M for mini-grid systems, and so on. These are all ways in which CREN is promoting know-how while also boosting future opportunities in the renewable energy sector. It’s a win-win situation for our members and for the people of Nigeria.
At the same time, we are trying to open our arms to embrace most state governors by giving them free consultation when they are planning their budget on renewables. This also implies making them understand the impact these projects have in the reduction of carbon footprints. A lot of our efforts are channelled in this direction, creating awareness on renewables.
What message would CREN like to give potential investors?
The renewables industry is fast-growing. It’s like a train: It’s moving fast and it will continue to do so whether you join or not. The most secure investment today is in renewables, especially if you tap into the performance-based grants of the REA [Rural Electrification Agency], which are making it easier for local investors. The REA is taking important steps when it comes to creating an enabling environment for local communities.
The renewables space is one of opportunities, and it is largely untapped. There is huge potential to come into Nigeria and work with local developers because they will be the ones to do the after-sales. For it to be sustainable, locals need to know how to maintain it. They use it to earn a living and due to this, they are not going to destroy it, they will rather protect it. That is where local content is important – it is in our own interest.
Read our latest insights on:
Nigeria as a major maritime hubINTERVIEW
More content from Nigeria
Nigeria as a major maritime hubINTERVIEW