Building sustainability, resilience in off-grid energy sector

THE Nigerian Rural Electrification Agency (REA) has plans to build 10,000 viable mini grids by 2023 as part of its rural electrification strategy with the aim of adding an additional 3,000MWs to the grid. This is great news for the estimated over 90 million Nigerians that remain un-electrified or have their electrification needs unmet by the grid. This mini grid by the REA is billed to serve about 300,000 households and 30,000 local businesses, and exponentially increase the country’s energy access and electrification targets. However, underpinning this push to increase access and electrification targets should be the need for building resilience and sustainability into these systems to follow the exponential growth that is likely to occur when these plans and targets take root.

In Nigeria, nowhere has the notion of resilience been more required than in our electricity sector. For decades, Nigeria’s un-electrified population has increased and hovers between 80 – 90 million people. This poses one of the greatest energy access challenges in the world because of decades of billion-dollar investments on the grid in past years, failing to deliver the required improvements in the electricity sector. Yet, the country’s off-grid population continues to increase concurrently with the country’s annual population growth.  The issues besieging Nigeria’s electricity sector can be defined as both economic and structural, and is straddled by human and political factors which can be categorised into three, namely: 1. Aging power assets 2. Huge supply deficit (long period of generation capacity stagnation) 3. Lack of adequately trained professionals and technically skilled manpower in generation, transmission and distribution, and also in the areas of management, regulatory and policy frameworks. The lack of electricity has impacted about every formal and informal sector in Nigeria—from business, to health, education and even the environment. It is in recognition of this that the Nigerian government reformed the entire electricity architecture, mainly through privatisation reforms which were concluded in 2014 in a bid to tackle the inefficiencies and inability to provide the power need for the country.

Today, the effects of climate change on the national grid impacts the ability of the grid to operate and generate optimum electricity. This means that the required amount of electricity for Nigeria’s current population will not be served solely by grid-based power alone, and that decentralised renewable energy (DRE) modalities are beginning to gain not just prominence but are also seen as a viable socio-economic growth strategy by the Nigerian government. This suggests the need for more investment in resilience structures to ensure the sustainability of the DRE sector and also to ensure that the emerging Nigeria’s off-grid sector is not beset by similar issues to those of the grid system.  For the growth of the Nigerian renewable energy sector to be sustained, there is the need for a coalition of stakeholders to begin to build resilience into the plans, targets and projects targeted at the off-grid sector. This is important as the country has launched an aggressive mini-grid strategy with plans to deploy 10,000 mini grids by 2023. To be able to achieve this, the 2016 Mini Grid Regulation by the Nigerian Electricity Regulatory Commission (NERC) is a great start and the REA’s policy direction in driving rural electrification through mini grids means that the decentralised renewable energy sector is at a positive tipping point.  What we need now is to build sustainability into these plans and projects to ensure that it builds, contains, and improves on the capacity needed to ensure a resilient and sustainable DRE sector. Importantly we need to learn from the same issues that bedevilled our grid system and ensure that the DRE sector is not limited by it. One way to do so is to get ahead of the expected human capital challenges by ensuring that we address the issues of capacity for the DRE sector right from the start.

The increasing demand for power in Nigeria has seen an increase in the surge of investors and developers in the DRE sector. This puts some pressure on the availability of human capacity. The Nigerian Electricity Supply Industry (NESI) lack of adequately qualified manpower has been a subject of numerous assessments and reports, some of which have been reviewed by experts in the sector. Yet, the fact remains that to address the skills and human capital gaps, there must be a coordinated approach in order to ensure that the decentralised renewable energy movement succeeds and is sustained. The DRE industry needs to ensure that, as she builds her local market, standardised training, certification and processes that equip local communities to better prepare them for the influx of new and innovative technologies, is taken into account.

It is clear that total dependence on government is not the way forward. The IEA on this issue says, “It transcends the boundaries of traditional government departments.” It is therefore necessary for private companies, civil society organisations, faith-based organisations, developers, media, international donor agencies and policymakers to form an ecosystem approach for ensuring the sustainability of this sector. This is why Power for All’s decentralised renewable energy human capital campaign is important, because it takes an ecosystem approach to building resilience by focusing on the people who run the systems. The two determining factors impacting sustainability and resilience in the DRE ecosystem are human capital and finance. Resilience is about people. Therefore, a lot of emphasises need to be placed on building local manpower development. Any huge dependency on international human capital can limit sustainability, because the predominance of foreign talent impacts finance, and as a result of this skills, knowledge and techniques are hardly passed down to locals. As DRE technologies are improving and advancing, so too should the systems and the people employed accelerate to enable them manage these changes and processes, and ensure little downtime in DRE electricity supply. The need to train and build people to run these systems and to partake in policies and planning cannot be overemphasised.

The private sector is taking giant steps in ensuring that locals are empowered, as there are now two RE training academies in Kaduna and Osun states. Access to finance is another major challenge the off-grid sector currently faces. Local banks and donor agencies need to be willing to fund part or all of off-grid projects. The dependence on foreign investors, though available, is not sustainable. There is need to locally make soft finances available for resilience in the DRE sector via public finance sources (infrastructure bonds), private-sector finance (green bonds) or from development and investment banks.

To ensure coordination in the DRE ecosystem, the IEA states that the formation of interdepartmental committee or working groups that bring together key players to share relevant information and take actions on sustaining the sector is important. A leading DRE sector organisation, Power for All, has launched the first DRE taskforce in Nigeria which focuses on five key areas: zero duties and waivers, consumer awareness in the DRE sector, support to Renewable Energy Association of Nigeria (REAN) on standardisation and certification, data collaboration in the DRE sector and simplifying payments for the DRE sector. Each of these five working groups are focused on building human capacity, addressing gaps in the system and focused on empowering the local ecosystem to remove bottlenecks and ensure long-term sustainability.

For instance, the DRE taskforce is aiming to drive long-term resilience for the sector by looking at implementing zero duties and waivers. The off-grid sector cannot thrive if private companies have to pay an arm and a foot to get their products into the country. This will impact foreign investments and increase the cost of projects and ultimately service delivery. The taskforce seeks to build consumer awareness in order to achieve commercial value for DRE products and educate the consumer on the effect of these products/technologies on their livelihood and general wellbeing. The taskforce also looks to simplify payment for the DRE technologies and services. Presently, the off-grid sector in Nigeria is centred on rural electrification.

This working group focuses on coming up with policies that support and make end-user payment easy, especially for those in rural communities. Developers and investors need to be guaranteed that communities can pay for the power provided to them. There is the issue of standardisation and certification to support the REAN to address both the issue of sub-standard products and services. The idea is to collaborate with other relevant government and non-government agencies to ensure that developers, installers, and practitioners in the sector are certified and follow global standards. The last working group in the taskforce is focused on developing credible data within the DRE sector—a crucial metric for investments, for planning and for understanding the impacts on our society.

On a final note, resilience in the Nigerian DRE sector requires proper tracking of Energy Access Dividends and how this impacts the social-economic sector. How does the off-grid sector affect education, health care, employment and other key societal values? Are there laws that govern these data sharing? How does this impact the nation’s bottom-line and helps with future economic planning. What is clear is that the decentralised renewable energy sector in Nigeria is certainly off to a great start with promising growth. But there should be a collective responsibility in ensuring that our nation, our people, and our homes are prepared in a very strategic and robust way to benefit from the benefits of the off-grid sector.

  • Okoye is a Technical Advisor on Energy Access at Clean Power for All – Nigeria.

 

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