By Ifeoma Malo
By increasing the share of renewables in Nigeria’s energy production, a growing urban population will be able to attain energy supply and greenhouse gas emissions will go down, says author Ifeoma Malo from Power for All.
In 1970, Nigeria had a population of 56 million with only 17.8 per cent living in urban areas; by 2016, 186 million people were resident in the country – an astronomical rise of 324 per cent over 46 years. This rise in population growth also coincided with the oil boom, which caused a shift in favour of urbanisation, which continues to this day, as economic opportunities have overwhelmingly become concentrated in cities and towns. As of today, 91 million people Nigerians out of a total population of 186 million is urban-based; this number is projected to reach 159.2 million by 2030 out of a total population of 264 million in the country.
Producing More Energy While On A Low-Carbon Path
Nigeria’s urban population growth outpaces the expansion of its power grid. Currently Nigeria produces about 5,000 megawatt (MW) for 186 million people. This energy production is projected to increase ninefold to 45,000 MW by 2030). As a consequence, more households will have to generate electricity themselves, using dirty and expensive fossil-fuel generators. The resulting increased carbon emissions go against Nigeria’s Nationally Determined Contributions pledge during the Paris Climate Change Meetings. It is currently impossible to predict the amount of added carbon emissions from supplying Nigeria’s urban population with electricity from the grid or through self-generation by the use of fossil fuels.
The major challenge for the country is how to generate enough power for its growing population so that Nigeria can engage in productive economic activities, while at the same time keeping carbon emissions low. Despite a transition to a more private sector driven electricity market after the unbundling and privatisation of the state-owned electricity monopoly, the National Electric Power Authority (NEPA) in 2013, there has not been much increase in power generation.
While there are schools of thought that believe that Nigeria should take advantage of all its available resources to generate electricity, including fossil fuels such as coal, lessons from other countries that have taken this path show that it will leave behind massive environmental damage as well as contribute to global carbon emissions and climate change. The impact would be most felt by communities and states where these fossil fuels are extracted from and where the pollution from their extraction will be most severe, with the medium and long-term harmful impacts unknown.
Expanding The Energy Grid
This means that Nigeria must seek to increase its power generation through a low-carbon path by making increased investments in clean, modern energy and by harnessing its renewable energy resources such as solar, wind and mini-hydro power. This will allow the country to meet current and future power demands while keeping carbon emissions low.
Additionally, it must harness these resources quickly by ensuring that there is more focus on decentralised renewable energy projects such as mini-grids, micro-grids and standalone systems as they are cheaper and quicker to deploy (in as little as a few months), and easy to place at the exact point of need. This is exactly the path that the Nigerian Rural Electrification Agency is embarking on by focusing on increased electrification through its Mini Grid strategy.
A lot of the renewable energy push in Nigeria is geared at off-grid electrification and energy generation because the business models and frameworks for on-grid renewable energy in Nigeria continue to be beset with problems. A prominent example of the disadvantages of on-grid projects is the 10MW Katsina wind farm that has yet to start operating after eight years have already passed since the project’s initial beginning. Similarly, three years after the Federal Government signed power purchase agreements (which allows electric power companies to sell power to the grid) with 14 solar power plant developers, no power has been generated from these plants yet.
Partnerships For Energy Access
In the past 3 years, at least 15 renewable energy powered mini-grids have come into operation and generated a total of up to 2MW, which is the equivalent of up to 90,000 homes operating lighting and small household appliances. Although these projects are located predominantly in rural communities, they demonstrate the potential of distributed renewable energy (DRE) solutions to increase energy access in urban areas as well, where up to 14 per cent of the population remains unconnected and a large percentage of those connected are without reliable supply due to power cuts.
This opens up numerous possibilities for cities and states to increase energy access for their residents, as they do not have to wait for large-scale grid-connected power plants to come on stream, but can deploy DRE solutions in areas where energy access is urgently needed, especially as their populations grow.
An excellent way for city and state governments to achieve this transition will be through clear policies on electrification that encourage partnerships with private companies; by increasing the ease of doing business in their states, cities and communities; and by offering subsidies for rural and last-mile consumers, particularly in the area of mini-grid investments.
It is important to note that energy poverty within cities disproportionately affects populations living in slums and squatter settlements. Power distribution companies frequently neglect these areas since their populations are often unable to afford the amount of electricity they need. For this class of consumers, cities can encourage DRE companies to set up mini-grids through partnerships with the communities. The communities would provide land as their equity contribution in a split-asset model where different partners contribute different assets in order to make a project successful and spread the costs. This is crucial as securing land for mini-grids in communities is often a challenge for investors in terms of cost and ownership title. Such contributions will encourage investors to set up mini-grids in communities that are willing to participate in this partnership.
Working with city and state governments to adopt this strategy is one of the major objectives of the Scaling Off Grid Energy project (SOGE) which is funded by the United States Agency for International Development (USAID) and Power Africa and co-implemented in Nigeria by Power for All and FHI360. Through this project, Power for All has been meeting with energy and infrastructure policymakers at state and city levels to raise their awareness of DRE solutions as a means to increase access to energy in their areas. This increased knowledge of DRE will enable them to properly utilise existing federal laws and regulations for DRE investment such as the Mini-Grid Regulations and Embedded Power Regulations, and to also develop specific policies and plans that will drive investment into their urban areas to meet power demand.
Decentralised Renewable Energy Sources Are The Way Forward
Power For All’s work around accelerating energy access across Nigeria has led to states exploring areas of cooperation in not just power generation through decentralised renewables, but also on how to leverage DRE to attract manufacturing and create jobs for the growing young urban population that needs them. For example, at one of our workshops in the North-Central region, the states of Benue, Kogi, and Nassarawa with a total population of 15 million have agreed to set up a regional cluster for the provision of DRE services and to also harness economies of scale for the manufacturing and assembly of DRE equipment, sell power across state lines to each other where there is a need, as well as to spur job creation and new innovative small-scale industries.
Nigerian city and state governments are poised to take advantage of the global revolution in renewable energy and specifically the decentralised production and distribution to increase access to electricity to their fast-growing populations. There is a convergence point of falling costs of renewable energy, more efficient technology and favourable government regulations and policies that gives municipal and state governments the opportunity to attract investment.
Renewables make it very possible for Nigeria’s fast growing urban population to access energy while resulting in less carbon emissions. Through using smaller systems that are cheaper and faster to deploy, energy poverty in these areas can be ended. The huge population of urban dwellers without electricity access also represents an excellent market opportunity for mini-grid operators that will only grow with time.
It is also an excellent opportunity for city and state governments to develop specific targets, policies and plans to drive DRE investments as well as to seek collaborative partnership with private companies, development partners, and donor agencies to make their targets a reality.