The disappointing life-cycle of off-grid power projects in Nigeria

Technology | Tech

Solar off-grid power solutions are now commonly touted by companies, governments, and non-governmental organizations as the holy grail alternative to bringing to an end the power crisis we have been experiencing in Nigeria over the past 30 to 40 years.

Indeed, the solar off-grid system is quite a captivating idea, on paper at least. That is why it is seen as probably the only attractive option we have left in bridging the wide gap in the power sector of the country.

A lot of industry leaders and company heads have chosen to hope to see the solar off-grid project do to the power sector, what the mobile phone did to landline telecommunication connections in Africa. 'Leapfrogging' the energy gap as we call it today.

However, in retrospect that isn't quite the case now as you will see.

You see, Nigeria as a country has a population of over 210 million people, with only about 35 to 40% having access to the national power grid in their homes (Less than 12 hours). Nigerian households have, on average, access to less than 600 kilowatt-hours a year of electricity, compared with a global average of nearly 3,500 kilowatt-hours a year. With government complexes and industrial hotspots having dedicated lines provided with power just above 18 hours.

The populace has no choice but to rely on smaller or mid-sized generators to meet their daily power needs. Nigerians and their businesses spend almost $14bn (N5tn) annually on an inefficient generation that is expensive (N140/kWh or more), of poor quality, noisy, and polluting, the Rural Electricity Agency said in a recent report, titled ‘The Off-grid Opportunity in Nigeria’.

Thankfully, industrial power generation has now been proliferated - allowing companies to build their own power generation plants, using coal or gas.

These only indicate that the energy sector in Nigeria can no longer cope with the growing power needs of a fast-growing population. Hence, the desperate attempt to look around for other viable options which have resulted in the consideration of off-grid power plants as a means of ameliorating the energy deficit currently experienced.

Albeit, it is known that these options don't come cheap. Perhaps that is why the catchphrase "willing buyer, willing seller" comes into play. This inherently means that homes and small businesses looking to tap into the off-grid network deployed by third party companies will have to put up with whatever cost they, the off-grid companies set as a tariff.

All these sound good on paper right, how about we take a closer at what is really happening in reality.

Nigeria as a nation stands a chance of getting better results in building renewable on-grid plants that contribute to the National grid. However, the cost implications of such endeavors will take its toll on the pocket of the government. Which by any means the country doesn't seem capable of financing given the number of sectors that require attention. Countries like Morocco have gone that way and are still experiencing financing problems for such ambitious projects.

The major challenge of off-grid power plants built to serve communities is its high cost of deployment. These plants require a lot of investments to have them running sustainably over the years until profitability. These are investment commitments that these companies can't shoulder alone. Over 80% of deployed solar projects in Nigeria seek some sort of partnership with the federal government or foreign bodies for financing.

In cases when these projects do become operational, only then do these companies begin to realize the technical challenges lying in wait. Giving rise to inefficient mini-grid plants scattered across the country that only seems to be sufficiently operational within the first six months of commissioning, only for these projects to fail or simply drop its potential power supply to host communities within the first 18 months. I call these the off-grid blindspots.

These blindspots are generally the real reason why the off-grid approach to solving our power problem that we all so depend on to bridge the energy gap will not be sustainable and will not achieve the results we so badly want to see.

Blindspot #1

Energy storage technology from PV's is still currently a huge problem. The use of more efficient alternatives such as the Li-ion battery technology which is now known to be a matter of tradeoff, as the resultant effect is a significant increase in the cost of deployment and tariff to be paid.

Blindspot #2

Overestimation of the purchasing power of host communities. This is where the willing buyer willing seller approach isn't always working. Host communities easily welcome these installations only for payments to begin to dwindle and wither as they can't pay the set tariff. These host communities are usually mostly farming communities.

Blindspot #3

Underestimated cost of continuous maintenance of these plants. This is probably the biggest blind spot of all. Commissioned mini-grid plants require constant monitoring and power evaluation that will ultimately have the plant running efficiently with basic amenities and services such as security, panel servicing, and load and consumption monitoring are usually left unmonitored. Faults arising from these neglects further reduces the operation ability of these systems leading them to eventually fail.

Of course, it is true that every technology does come with its own challenges, but definitely not at the expense of sustainability and long-term profitability.

The key to solving these problems is to further decentralize these renewable power generating technologies into smaller units starting with homes. Nigerian homes constitute the highest number of consumers without adequate power in the whole of Africa. Solving household power problems will only further enable the servicing of medium to large scale businesses with power from the main grid for economic growth.

Homegrown solutions required to fulfill the power needs of homes across Nigeria are badly needed, even if it means making some changes in the current technologies we have in consumer electronics so household power needs can be met independently and sustainably.

Currently, these homegrown solutions do exist and have been proven. Further permeance of these technologies, requires a solid financing framework to be in place for the adoption of these home solutions to make them become ubiquitous and nationally adopted. These homegrown solutions should have pricing and affordability as a priority. Considerating the purchasing power of an average family in Nigeria.

Homegrown solutions need to be emphasized if true profitability and sustainability is to be achieved. The per-unit cost of our solutions needs to be below the competition's, making the product more affordable and available as demand peaks.

The Nigerian consumer only cares about value and pricing. Nigerians are mainly brand agnostics who do not really care about brand loyalty. Products manufactured inside the country with this approach to consumers are better positioned to win both short-termed and long-termed.

-Abdulmalik Badamasi

Nice writeup.... but its important to start checking out strong solutions that can be built locally
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