At REGlobal’s 2nd edition of “Solar Power in Africa” conference, Anita Otubu, Head – PMU, Nigeria Electrification Project gave a presentation on the various solar power plans and policies in the country of Nigeria. In her presentation, she discussed the schemes and regulations to promote solar power in Nigeria; progress made so far in these countries; and initiatives to address the challenges that lie ahead. REGlobal presents edited extracts from her address…
The current national peak power demand in Nigeria is estimated at 25,790 MW. However, the total installed capacity is about 16,384 MW, out of which only 12,522 MW are generated, and 3,800 MW is being distributed. Further, the current electricity access rate is 60%. The electricity access rate for urban population is 86% and for rural population it is 34%. In summary, the total energy access gap is pretty huge in Nigeria. Even for those who do have access to power, the power supply is unreliable and unstable. Thus, there is a lot that needs to be done.
The federal government of Nigeria has taken huge steps towards bridging the existing energy access gap. A number of policies and regulations have been introduced to promote solar power in Nigeria to not take over but supplement the main grid.
Starting off, in 2005, the Electric Power Sector Reform Act (EPSRA) was enacted which set the foundation of the privatisation of the power sector in Nigeria and therefore allows for private sector investments in power. This act was critical as it helped in the formulation of many regulations, and also, the creation of Nigeria Electricity Regulatory Commission (NERC). These regulations have helped in private sector participation in both generation and distribution of power in the country.
Some of the major regulations that have promoted solar in Nigeria are Permits for Captive Power Generation Regulations in 2008, the Independent Electricity Distribution Network Regulations and the Embedded Generation Regulation in 2012, and the Eligible Customers Regulation in 2017. Though these regulations may not specifically mention the use of solar, they indirectly promote the use of solar as independent decentralized off-grid solutions that allow the use solar or solar-hybrid components.
In 2015, the federal government of Nigeria approved the regulations on feed-in-tariff for renewable energy sourced electricity. This obligated the distribution company to source atleast 50% of the total procured power from renewables. In 2016, a major regulation was established – the Minigrid Regulations which allowed for minigrid development within the country.
In terms of policy development, the National Renewable Energy and Energy Efficiency Policy has been key to promoting clean energy resources and improve energy security and the country’s climate objectives. Nigeria also adopted the Sustainable Energy for All (SE4All) Action Agenda to achieve 8,000 MW of off-grid power by 2030. Then we also have the Rural Electrification Strategy and Implementation Plan and the Power Sector Recovery Program both of which were established in 2016. In 2017 the Economic Recovery and Growth Plan and the Nigeria Economic Sustainability Plan was introduced in 2020. Thess plans and policies provide a platform for renewable energy solutions to be developed within Nigeria towards the bridging the energy access gap.
Now that we have discussed the various policies and regulations that have been put in place by federal Government of Nigeria, I would like to talk about the various programs that have been implemented by the Rural Electrification Agency as part of the country’s off-grid electrification strategy.
The Nigeria Electrification Project is funded by both the World bank and African Development Bank with a total of 550 million USD secured. The program has five components. We have the solar hybrid minigrid component which essentially provides power to households, MSMEs, public health and educational institutions, standalone solar home systems to provide power to households and MSMEs, the energizing education program which provides power to federal universities and teaching hospitals, the energy efficiency and productive use appliances component that essentially works towards the maintaining sustainability of minigrids as it provides a means of likelihood in order for them to be able to able to pay for the power that they consume, and finally we have the technical assistance component.
The first three components – solar hybrid standalone, solar home systems and energy efficient equipment and productive use appliances programs have brought in grant subsidies. Thus, we need to be sure these projects are fit for purpose and then we make the payment with subsidies for contracts that we enter into.
So, what has been achieved since the day we implemented or commenced this program. We have successfully completed 65 minigrids, successfully commissioned 14 minigrids and deployed 452,442 solar home systems. We have entered into grant agreements with 198 with minigrid developers and solar home companies and in total 302 companies have actually applied for the program. We expect more companies to apply and sign a lot more agreements to help us achieve our targets. It is also important to mention that we have completed 8 containerized solar hybrid solutions for isolation treatment centers and covid care health facilities.
Our Rural Electrification Fund provides capital subsidies to qualified rural electrification schemes developed by public and private sector entities focusing on minigrids, solar home systems and also on grid extension. In the first phase, we completed 12 minigrids, 5,272 connections have been achieved, 1 inter-connected minigrid, 19,000 solar home systems have been deployed. Under the second phase of the interconnected mini grids and accelerated scheme, 1 minigrid has been completed and about 51 minigrids are in the pipeline.
In our Energizing Education Program, we provide decentralized solutions for economic clusters. Many markets have been provided with solar hybrid solutions, mainly rooftop solar. We can see a lot of CO2 savings as well as connections and meters. This is also a component of the Nigeria Electrification Project, but before it became a component, it was a start alone program fully funded by the Federal Government of Nigeria. The phase 1 of the program seeks to provide power to 9 federal universities and two teaching hospitals. In addition, we build renewable energy workshops and training centres and install streetlights to provide security in the campuses of the universities.
Finally, Super Power Naija (SPN) provides N140 billion FGN credit facility with the target of providing 5 million solar connection to 25 million Nigerians. SPN program provides low interest loans/single digit interest loans to minigrid developers and solar home system companies to embark upon both the upstream and downstream business activities. From that loan we have dispatched about N4.6 billion. We have entered into three loan agreements with three different companies and expect more applications.
We need to identify what the challenges are. I’m not going to speak specifically on Nigeria but focus on the whole of Africa. What is really preventing significant scaling of solar power within Africa? Firstly, low public awareness and we have had to give awareness to the residents regarding the new technologies that are out. The next challenges is the lack of a comprehensive off-grid database as companies, especially international companies, are not willing to come to this country due to absence of data. Other issues include lack of access to finance, lack of adequate legal framework to protect investments, and lack of technical manpower.
Many focused initiatives are required to address these challenges. Proper design and planning of solar/renewable energy projects is required from inception to execution to attract climate and development finance from the investors and to ensure quality outcomes. Provision of market intelligence, geo-spatial and granular data is needed for private sector developers. There needs to be public awareness and the relevant government agencies should publicize solar energy and its advantages. There is need for policy consistency to prove to private investors that the terms of contract entered into will not be changed upon investment. Tax incentives such as tax holidays for manufacturers and power production tax credits for individuals who deploy solar power will promote growth. Further, there should be a legal framework that promotes the use of renewable energy power solutions as well as protects private sector participation and investments. An executive order needs to be enacted to encourage local banks and other financial institutions to provide low interest loans and micro credit facilities for entrepreneurs who embark on solar power generation projects (production and generation). More funding should be committed to energy and research institutions to provide cheaper solar technologies and train manpower.