Bridging electricity deficit gaps through renewables
Solar panels. PHOTO: AFP
At an average generation capacity of 4,000MW to a population of 200 million people, many Nigerians are left without electricity and where available, with limited hours of supply. To address this imbalance, there is a need to explore other alternatives like renewables. FEMI ADEKOYA writes on how energy diversification can help to assuage the nation’s electricity supply deficit.
Though renewable energy is at the centre of the transition to a less carbon-intensive and more sustainable energy system, the electricity sector remains the brightest spot for renewables with the growth of solar photovoltaics and wind in recent years.
For a nation with high inefficiency in power generation and distribution, there is need to deepen access to other renewable sources of energy.
Minister of Power, Works and Housing, Babatunde Raji Fashola, during the inauguration of solar electrification project in Iponri, Lagos had said the Federal Government will grow the economy by generating power from both on-grid and off-grid sources.
Despite the potential that solar energy and other renewables offer, there are concerns about the pace of deployment, even as latest International Energy Agency IEA’s analysis shows the world is not doing enough.
With power supply remaining inconsistent and inadequate for production, Nigerian manufacturers also expressed lack of confidence in the power sector.
According to the Manufacturers CEOs Confidence Index for the first quarter of 2019, power generation in the country is dependent on the supply of gas, which in itself is susceptible to fluctuations due to frequent attacks on gas pipelines.
President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed, said, “Power is still the biggest challenge to manufacturers, especially the ones in the Small and Medium Enterprises sector, because they rely almost totally on public power supply.
“The big firms generate their own electricity most of the time and the cost of generating this power increases the cost of production and therefore the products may not be competitive even in Nigeria.
“That is why solving the issue of electricity will see us becoming more competitive and easing the pain of manufacturers. “
For some manufacturers like Nigerian Breweries Plc who are diversifying and exploring solar energy option, its new solar plant is expected to supply 1GWh annually to the Ibadan brewery at a significant discount to their current cost of power, while reducing the site’s CO2 emissions by over 10,000 tonnes over the lifespan of the plant.
Renewables have a major role to play in curbing global emissions. Renewable capacity additions need to grow by over 300 GW on average each year between 2018 and 2030 to reach the goals of the Paris Agreement, according to the IEA’s Sustainable Development Scenario (SDS).
But the IEA’s analysis shows the world is not doing enough. Last year, energy-related CO2 emissions rose by 1.7% to a historic high of 33 Gigatonnes. Despite a growth of 7% in renewables electricity generation, emissions from the power sector grew to record levels.
Advantages of scaling the adoption of renewable energy
“The world cannot afford to press “pause” on the expansion of renewables and governments need to act quickly to correct this situation and enable a faster flow of new projects,” said Dr Fatih Birol, the IEA’s Executive Director.
“Thanks to rapidly declining costs, the competitiveness of renewables is no longer heavily tied to financial incentives. What they mainly need are stable policies supported by a long-term vision but also a focus on integrating renewables into power systems in a cost-effective and optimal way. Stop-and-go policies are particularly harmful to markets and jobs.”
Chief Operating Officer at Xenergi Limited and Council Chairman, Society of Petroleum Engineers (Nigeria), Debo Fagbami, noted that the global shift to renewable sources of energy is bound to have a ripple effect on Africa.
“The cumulative power generation of sub-Saharan Africa currently stands at 40 GW if you exclude South Africa and according to IEA, to meet Africa’s energy needs would require a yearly spend of close to $50b.
“The implication of this is that African countries, particularly the new kids on the block would need to invest a significant portion of their windfall from oil sales into power generation, transmission and distribution projects.
“Renewables would have a significant role to play in power generation, although it is important to recognize that though the developmental costs of renewable energy projects have dropped due to advancements in research and technology, the costs remain high in comparative terms to fossil fuels particularly for African countries”, he added.
On his part, the Chief Executive Officer, VICMO, a solar energy firm based in Lagos, Olufemi Adebowale Vicmo, said the power situation in Nigeria will not improve until Nigerians try another means of generating energy.
In a chat with The Guardian, Vicmo said: “One of the solutions for Nigeria is if individuals can afford install solar energy systems in their homes. Once you install it, you don’t need power from the grid or generator and a standard solar energy can last for 40 years. The only service required is cleaning the solar panel. The battery itself lasts for 20 years if it is properly installed. That is the only way we can solve the problem of Nigeria electricity.
“If we have many houses using solar energy, the distribution companies will come to the poor people and start begging them to subscribe monthly for N1000 to enjoy 24 hours electricity.
“The only thing is that government needs to bring the manufacturers of solar solutions to Nigeria to aid deployment and reduce cost.”
Advocates of renewable energy often note that 100% renewable is technically feasible as it only requires political will.
With some caveats, this is true. There is theoretically enough sunlight and wind, and a growth rate of 20% means a doubling every four years. If sustained, this would mean electricity consumers could have 500 times the existing amount of wind and solar by 2050. However, there are both economic and technical barriers.
The rapid growth of renewables in both the United States and Europe has been due in large part to subsidies that make investment in renewables highly profitable.
As installed capacity has increased, both state and national governments have tended to cut subsidies, resulting in substantial decreases in renewable investments.
In February 2018, the Nigerian Customs reclassified solar panels under a new HS code and this increased the tariff on the equipment. There is now a 5% duty on solar panels and 5% VAT. In the past, there were no tariffs on solar panels. This is beside the 20% duty on the batteries, which make up solar home systems.
To cushion the effect of the new duty regime, solar entrepreneurs have had to deploy measures such as providing flexible payment options and adjusting their operational models.
According to the United Nations Environment Programme, worldwide new investment in renewable energy has been basically flat for the past five years. This overall view masks substantial local and regional differences; hence the need for policy reviews to address concerns limiting adoption of renewable energy.
Renewable capacity expansion accelerated in many emerging economies and developing countries in the Middle East, North Africa and parts of Asia, led by wind and solar PV as a result of rapid cost declines, the IEA noted.
“Governments can accelerate the growth in renewables by addressing policy uncertainties and ensuring cost-effective system integration of wind and solar. Reducing risks affecting clean energy investment in developing countries, especially in Africa, will also be critical.
“The 2018 data are deeply worrying, but smart and determined policies can get renewable capacity back on an upward trend” IEA added.
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