The Executive Vice Chairman/CEO of the National Agency for Science and Engineering Infrastructure (NASENI), Mr Khalil Halilu and the Managing Director/CEO of the Rural Electrification Agency (REA), Mr. Ahmad Salihijo Ahmad have agreed to work together to deploy NASENI Solar resources and other renewable energy technologies, to increase electricity supply to Nigeria’s rural areas.

This commitment was the outcome of discussions between the two chief executives in Abuja recently when the EVC/CEO of NASENI visited the Rural Electrification Agency (REA) office as part of his efforts to engage with stakeholders to promote the adoption of NASENI’s technologies.  

Mr. Halilu, who assumed office two weeks ago as NASENI’s chief executive, said, “The focus is to hit the ground running by nurturing effective collaborations with the right stakeholders who will assist NASENI to fulfil its mandate of providing the science and engineering infrastructure base for Nigeria’s businesses and economy to thrive.” 

According to him, “The strategy, going forward, for NASENI includes knocking on the doors of potential end-users of the Agency’s technology and engineering products, making off-take of our Research & Development (R&D) easy, while also bringing the direct impact of our work to bear on the Nigerian economy.”

The two chief executives pledged to work together to bring down the cost of solar power installation in rural areas, through efforts such as increased local production of solar panels by NASENI. The overall goal, according to the REA MD, Ahmad Salihijo, is to facilitate the Federal Government’s ambition to achieve the electrification of Nigeria’s rural areas in record time.

WATT Renewable, a private independent clean energy producer is to raise as much as $100 million by the end of 2024 to expand its business of providing solar power, mainly to telecommunications towers in Nigeria.

Sherisse Alexander, chief investment officer of WATT Renewable stated that the company has installed 12 megawatts of generation capacity at about 160 sites and has a pipeline of projects 10 times that size.

According to Alexander, the Canadian company would prefer a major investor to take a stake but will finance projects individually if need be.

“What we are looking at is a corporate raise. WATT is talking to companies that are already involved in the energy industry that have an understanding of renewable energy and specifically the African market,” she said.

WATT is one of a number of energy startups trying to provide power solutions in Africa, where about 600 million people, or half the population, have no access to electricity. Businesses across the continent are offering services ranging from mini-grids to small hydro plants to reach areas that aren’t connected to national grids.

One of its main customers is Pan African Towers Ltd., a Nigerian provider of masts. In addition to telecommunications, WATT has also focused on financial institutions and some commercial and industrial companies.

The net-zero carbon emissions ambition of world leaders is accelerating the global shift away from hydrocarbon-based energy sources and towards renewables. Many governments are making sustainable investments a strategic thrust and are using policies and incentives to drive innovation in renewable energy technologies.

As a result, Agusto & Co anticipates that the world’s capacity to generate electricity from solar panels, wind turbines, and other renewables will grow significantly in the next few years. In 2022, a projected $472 billion will be invested in renewable energy, 44% more than in 2017, when $326 billion was spent[1].  

According to the International Energy Agency (IEA), renewables will account for about 95% of the increase in worldwide power capacity by 2026[2], with solar photovoltaics (PV) alone accounting for more than half of the anticipated expansion.

Nigeria is not excluded from this pursuit of carbon neutrality, being one of the 195 nations that are party to the United Nations Paris Agreement – a pact that seeks to combat climate change by reducing greenhouse gas emissions. In addition, Nigeria has undertaken to cut its greenhouse gas emissions by 20% between now and 2030 and to attain net-zero emissions by 2060.

Modern Solutions to Age-old Problems?

However, Agusto & Co is of the opinion that Nigeria’s aspirations are rather lofty considering that the country is still grappling with inadequate electricity supply from the national grid as unmet demand is estimated at approximately 20,000 megawatts (MW)[3]. With rapid industrialisation, population and income growth, this supply gap is expected to widen.

The challenges confronting the Nigerian power sector are well documented, over-laboured and cut across the industry’s entire value chain. They were summarised by a World Bank study^[4] in 2020 where it was revealed that about 47% of Nigerians lack access to grid electricity and those who do have access, face regular power outages.

Nigeria’s current energy mix is heavily skewed towards gas, with 23 thermal plants contributing 76% of the total installed generating capacity. However, years of underinvestment in the domestic gas market as a result of price controls, regulatory obstacles and pipeline vandalism have put question marks on the commercial viability of gas supply to the power sector.

Agusto & Co estimates that renewable energy sources (such as wind and solar) in Nigeria, which are frequently proposed as alternatives to gas, are still in their infancy and are not commercially viable on a sufficient scale to diversify the country’s energy mix.

A Case for Renewable Energy in Nigeria

Given its abundant and diverse natural resources, Nigeria is capable of producing significant amounts of clean and renewable energy (particularly solar energy). The country is located within a high sunshine belt and has significant solar energy potential as a result. According to the Nigerian Meteorological Agency (NIMET), the average annual daily sunshine in Africa’s largest economy is 6.25 hours[5].

Nigeria’s Northern region enjoys average solar radiation of about 25.2MJ/m² (megajoule/square meter) per day, with an average of 12.6MJ/m² in coastal areas[6]. Wind speeds ranging between 2.5m/s and 6.5m/s[7] in the Northern region of Nigeria, owing to the large expanse of dry land, also present opportunities to generate wind power, while biomass remains a potential and untapped source of bio-energy given the amount of waste produced.

While grid-connected electricity supply remains the cheapest source of power in Nigeria, it is not always economically efficient to construct gas pipelines and/or transmission cables to some remote villages with very little demand for electricity. Agusto & Co believes that this underscores the need to expand the current energy mix to include renewables.

Renewable energy plants can be constructed in remote areas as an alternative to running several kilometres of transmission cables, which are subject to vandalism. The poor and erratic power supply from the national grid also provides opportunities for small-scale renewable projects for individual households.

Also, a decentralised energy production system is pertinent to address the transmission and distribution challenges plaguing the Nigerian power sector, which is provided by the use of solar energy. Nigeria’s market for electrification is ripe, with an estimated 215 million^[8] people and an annual population growth rate of 3%. Given the appropriate regulatory support, Agusto & Co forecasts significant investment in renewables.

Two Birds, One Stone

Renewable energy is the fastest-growing energy source globally and many industry experts consider it to be the energy for the future with projections of as much as 85% of global power output coming from renewables (mostly solar and wind) by 2050[9]. Agusto & Co expects that with growing awareness of climate change and environmental sustainability, more Nigerian organisations will opt for renewables, driving their increased adoption – particularly solar energy – in keeping with the global trend.

This would place Nigeria firmly on track to effectively kill two birds with one stone by accomplishing its national goal of increasing energy output sufficiently to overcome the domestic power supply shortfall and putting itself on a solid route to meeting its international commitment to achieve zero emissions by 2060[10].

[1] https://iea.blob.core.windows.net/assets/b0beda65-8a1d-46ae-87a2-f95947ec2714/WorldEnergyInvestment2022.pdf

[2] https://www.iea.org/news/renewable-electricity-growth-is-accelerating-faster-than-ever-worldwide-supporting-the-emergence-of-the-new-global-energy-economy

[3] NERC

[4] https://www.worldbank.org/en/news/press-release/2020/06/23/nigeria-to-keep-the-lights-on-and-power-its-economy

[5] https://businessday.ng/energy/power/article/achieving-renewable-energy-projection-hinge-on-effective-rd-human-capacity/

[6] Sweetcrude Reports

[7] New Era Energy

[8] https://www.worldometers.info/world-population/nigeria-population/

[9] https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_Report_GET_2018.pdf

[10] https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/110321-cop26-nigeria-vows-to-reach-net-zero-by-2060-but-stresses-role-of-gas