Embracing the use of renewable energy will help in bridging the deficit in electricity supply, and bolstering the economy, MUYIWA LUCAS reports
A recent report by the World Bank, which indicated that about 45 per cent of the Nigerian population, lack access to the electricity grid captures the sorry state of the country’s electricity sector.
In a further breakdown, the report hinted that the disparity between urban and rural access to electricity stood at 84 per cent and 26 percent adding that the deficit got wider as the pace of population growth has overtaken the pace of electrification.
Stakeholders in the economy have at several times harped on the importance of access to reliable and affordable energy as an essential ingredient for socio-economic development and the well-being of the country.
To further accentuate this position, they are convinced that a decentralised renewable energy solution have great potential to bridge the energy gap and provide access to electricity in rural and urban centres.
According to the International Renewable Energy Agency (IRENA), renewable energy can help Nigeria not only meet its energy needs, but also power sustainable economic growth and create jobs while achieving global climate and sustainable development objectives. This is why adopting renewable energy sources like solar, biomass, and hydro presents a compelling solution to address energy poverty and promote sustainable development in the country.
Aside from its relative the relative affordability it offers in the long run, it remains a good option for making electricity accessible to last-mile communities where grid extension is expensive. Renewable energy sources, such as solar PV and mini-grids can generate electricity for hospitals, schools, companies, farm operations, transportation, and powering home appliances, among others.
This option has been proven to be effective by the pilot scheme conducted by the Rural Electrification Agency (REA), in Makoko area, a suburb in Lagos state, where the agency has deployed small and large capacity Solar Home Systems to provide electricity using renewable energy projects in low income communities nationwide. Across the six geopolitical zones, a total of 1,572 small and large capacity Solar Home Systems (SHS) have been deployed through this intervention, bringing about significant improvements in the lives of rural households and small businesses. It is noteworthy that female beneficiaries constitute 22 per cent of the total beneficiaries. This project aligns with the Federal Government’s Economic Recovery and Growth Plan (ERGP), Economic Sustainability Plan (ESP), and National Poverty Reduction with Growth Strategy (NPRGS).
Access to renewable energy promises to unleash the potential of Nigeria’s micro, small and medium enterprises (MSMEs), a major plank of the government’s Renewed Hope Agenda for economic rejuvenation.
For instance, the National Association of Hair and Beauty Practitioners of Nigeria (NAHBPON), which has more than five million members and 16 million potential members across Nigeria, recently lamented that power supply has always been a main challenge for business owners and SMEs.
NAHBPON, which noted that women and youths make up the largest population percentage among hair and beauty practitioners in Nigeria because most barbers, hairdressers, beauticians, spa owners, make-up artists are predominantly women and youths, underscored the importance of ensuring that their energy needs are met.
According to the association, due to the unreliability of grid electricity in Nigeria and high cost of petrol and diesel to power generators, NAHBPON will appreciate renewable energy solutions that allow its members access to sustainable and affordable energy.
In proffering solution to bridging the energy gap, the Renewable Energy Association of Nigeria (REAN), in a report by Ayobami Adedinni and Godwin Jimoh, urged the government to implement supportive policies that incentivise investments in renewable energy and facilitate grid integration.
They also advocate the removal or grant of tax waivers on imported renewable energy equipment and streamlining of licensing procedures, including more public-private partnerships under a collaborative arrangement to leverage resources and expertise for the implementation of renewable energy projects, facilitate project monitoring, and collectively address challenges, including putting in place innovative financing models, such as micro-finance and green bonds, should be made accessible to renewable energy developers to design projects for low-income households and communities.
At a recent conference organised by REAN, stakeholders agreed that energy plays a vital role in the growth, progress, and development, as well as poverty eradication and security of any nation. They were unanimous that uninterrupted energy supply is a vital issue for all countries today and future growth crucially depends on the long-term availability of energy from sources that are clean, affordable, and reliable.
According to participants, access to energy has been an enormous challenge in Nigeria with up to 70 per cent of the country’s population not having access to electricity.
“There is no doubt that the power crisis in Nigeria will persist unless the country diversifies its energy sources for domestic, commercial, and industrial uses, and adopts clean, reliable and sustainable sources of energy to meet the demands of its growing population.
“By 2050, Nigeria is projected by the World Bank to become the third most populous country globally having up to 400 million people or more. Being one of Africa’s primary sources of greenhouse gas emissions and also highly susceptible to the consequences of climate change, Nigeria’s transition to clean energy sources will significantly create positive environmental impact for Africa,” the conference stated.
Participants noted that while renewable energy stands as a viable solution to energy deficit, Nigeria’s renewable energy sector is still confronted with various challenges and barriers that impede its growth and the uptake of renewable energy by SMEs and citizens in general.These challenges centre around lack of access to foreign exchange (forex), high tarriffs and import duties, taxation, lack of favourable policies and fiscal incentives, and difficulties in accessing finance despite the capital-intensive nature of renewable energy businesses.
“The availability of renewable energy technologies in any business goes a long way to improve and increase productivity and profit levels. A few SMEs in Nigeria which have been able to adopt renewable energy, especially solar units, have attested that it has significantly helped them by reducing production costs, saving time, increasing their productivity and their profits.
“However, due to the high costs of purchasing renewable energy technologies, many consumers, including SMEs, are unable to adopt renewable energy for their domestic and business needs. Mass adoption requires improved affordability, concessional financing for emergent players, and an enabling policy and regulatory environment for renewable energy, in order to push down final consumer costs.
“Solar alternatives to petrol generators exist in Nigeria but are 15-20 times more expensive.These solar systems are not available at scale to a vast majority of citizens who live in poverty, and cannot meet up with the upfront cost of renewable energy solutions like solar rooftop systems. Therefore, accelerating the switch to solar system,” the conference’s communique stated.
The government and other stakeholders have also renewed commitments to supporting renewable energy shift.
Chairman, House of Representatives Committee on Renewable Energy, Hon. Afam Ogene noted the global shift towards greener, safer, and sustainable energy solutions and the need for Nigeria to address financial challenges faced by the sector through accessible financing options.
He pointed out that the government is keen on renewable energy as this is the first time since its inception in 1999, that the government would set up a committee on renewable energy within the House of Representatives.
According to him, the government appreciates the fact that with the diverse renewable energy resources available, if the right enabling technologies are developed and funded, renewable energy has the potential to bridge the energy gap in Nigeria.
Recently, the Nigeria Sovereign Investment Authority (NSIA) launched a $500 million Renewables Investment Platform for Limitless Energy (RIPLE), with the pilot scheme located within the Tokarawa Industrial Hub in Kano State. This aims at setting up a generation and distribution system to meet 70 MW of unsuppressed energy demands of industrial activities, commercial enterprises, and residential customers in an area covering about 9,000 connections.
Banks such as Bank of Industry (BoI) and Sterling Bank are also providing differentiating financing plans for renewable energy projects. But more still need to be done. There is need for purpose-driven and intentional investments in renewable energy in Nigeria by both government and private sector players, to actualise meaningful impact. As much cleaner energy sources are desirable, the huge financial implications of the transition to sustainable and renewable energy cannot be wished away.
No doubt, there is need for continuing advocacy for supportive policies and incentives to encourage further investment in renewable energy projects. Stakeholders, including governments, financial institutions, renewable energy business providers, corporate and individual users, non-profit advocacy groups like REAN need to continue to explore ways to increase awareness, access and adoption of renewable energy solutions.
Increased public-private partnerships will further leverage resources and expertise for the implementation of renewable energy projects, and to collectively address challenges.
