Regulations and Business Models for Energy Access in Nigeria
This article is written by Charlotte Remteng, Muhammad Bello Suleiman, Chiamaka Maureen Asoegwu and Chysom Nnaemeka Emenyonu as part of the requirements for the Open Africa Power Fellowship Programme 2021. It is a sub-section of the publication, Country Project Nigeria.
The government of Nigeria currently targets a 100 percent electrification rate by 2040, and off-grid energy will play a vital role. The electrification rate currently stands at 45%, with higher access in urban areas (55%) compared to rural areas (36%). According to the USAID fact sheet (https://www.usaid.gov/powerafrica/nigeria), while the country has an energy generating capacity of 12,522 MW, 20 million households remain without energy access. Extending on-grid connections will continue, but it will be timely and costly, particularly for rural and sparse populations. Off-grid energy, however, presents a viable alternative, and standalone systems are particularly well suited to reach the hardest-to-reach customers. Specific regulations and business models are necessary for Nigeria to achieve universal access to electricity.
a) Grid Extension
The Power Sector Recovery Programme (PSRP), an off-shoot of the Electric Power Sector Reforms Act (EPSRA), is a series of policy actions, operational, governance and financial interventions to be implemented by the Federal Government of Nigeria over the next five (5) years to reset the Nigerian Electricity Supply Industry for future growth.
The objective of the Power Sector Recovery Programme (PSRP) is to renew Nigeria’s economy by rebuilding a functioning, fair power system through:
⮚ Restoring the sector's financial viability.
⮚ Improving power supply reliability to meet growing demand.
⮚ Strengthening the sector's institutional framework and increase transparency.
⮚ Implementing policies that promote and encourage investor confidence in the sector.
⮚ Institutionalizing a contract-based electricity market.
Key Deliverables for the PSRP are:
⮚ Dimensioning Accumulated Deficit (2015, 2016) and Future Shortfall (2017-2021)
⮚ Developing Mechanisms for Settlement of Accumulated Debt
⮚ Developing Interventions to Minimize Subsidy Going Forward
⮚ Restoring Sector Financial Viability
⮚ Ensuring DisCo Loss Reductions
⮚ Identifying Funding Sources
⮚ Addressing Infrastructure Gaps
⮚ Addressing Gas Pipeline Vandalism
⮚ Enabling Electricity Market Business Continuity
⮚ Developing a Communications Strategy for Stakeholders
However, with the PSRP, there were issues with achieving the aim of the program, which includes:
- Monitoring:
Metering: various metering plans have been birthed and executed without any attendant positive results to show. From MAP to FGNMP, yet metering rate is approximately 50%. This invariably affects the amount of commercial loss that is currently plaguing the entire value chain.
Projects: A lot of projects that were handpicked for technical infrastructure upgrades were either not done at all or incompletely executed. For example, the Nigeria Integrated Power Projects (NIPP) across electricity distribution networks were highly substandard without necessarily adding measurable value or helping with technical loss reduction. "A minimum of 4,000 MWh/h must be guaranteed and distributed daily from 2017 to ensure the stability of the grid", unfortunately, we have seen generation hit as low as 3,000 MWh/h.
- Implementation of policies:
Non-cost reflective tariffs: Part of the drive for privatization was an understanding that tariffs would reflect the 'end-user tariff trajectory' and that agreement would be made regarding tariff adjustments throughout the period. Only in July 2020 did the discos get the first tariff review, which is still not cost-reflective, but promises to transition to cost reflectivity by 2022. Tariff does not reflect economic realities and hence leading to the issue of cash liquidity in the market.
Ministries, Departments, and Agencies (MDAs) Debts: Well over $200 million is owed by ministries, various federal government departments, and agencies across the sector. Combined with a lack of effective governance and enforcement of rules and policies, the challenges have been reinforced. The PSRP was supposed to completely net off the MDA debts, however, only about $26 million was purported to have been paid off (Guardian Newspaper, 2018).
- Enabling Environment:
Exchange rate: The continuous rise of the USD annexed to Naira continues to pose a huge threat to the availability of much-needed foreign exchange to drive the needed investment in the sector.
Inflation: with inflation also comes the need for adjustments in various economic factors in purchasing power of electricity consumers.
Other Economic policies: Policies that affect the importation of equipment, and resources needed to cheaply improve the infrastructure of the sector are still sorely lacking.
Decentralization of the Sector: Nigeria still currently has a poorly diversified energy mix where the majority (85%) of installed capacity is fuelled by gas and still operating in the transitional electricity market (TEM), as against the Final Market, with bilateral contracts between electricity buyers and sellers at all levels, and a central balancing mechanism through the creation of a spot electricity market and a more efficient energy mix.
b) Microgrids
NERC Mini-Grid Regulation (2017) stipulates regulation is limited to distributed power of up to 1MW. Before NERC issuing the regulations, the generation of electricity within the threshold of 1megawatts (MW) and distribution within the threshold of 100 kilowatts (KW) in aggregate at a site was more or less unregulated, with no framework for issuing a permit or registration. But the introduction of the Regulations has brought more form and definition to this promising aspect of electricity generation and distribution.
The Regulations provide for two types of mini-grids, namely, the isolated mini-grid and the interconnected mini-grid. The isolated mini-grid is a mini-grid that is not connected to any distribution network and is to be utilized in an unserved area, that is, an area within a Distribution Licensee's Network without an existing distribution system. The isolated mini-grid is further divided into a mini-grid with less than 100KW and a mini-grid with more than 100 KW but less than 1MW. The Regulation further makes a distinction between isolated mini-grids that is less than 100KW and a mini-grid that is more than 100KW but less than 1MW. An operator of a mini-grid that is less than 100KW can opt for either a registration or a permit, however, for economic expediency, a permit is desirable as it confers on the operator a right to compensation where a Distributor Licensee extends its network operations to an isolated mini-grid operated under a permit. If a Distribution Licensee extends its operation to an isolated mini-grid operated under a permit, the Regulation provides the operator with two options:
I. the mini-grid operator may convert the isolated mini-grid into an interconnected mini-grid; or
II. Transfer all assets the isolated mini-grid operator does not want to remove from the mini-grid system to the Distribution Licensee in return for compensation.
These options serve as a buffer or incentive to operators and help minimize any form of loss to operators as it entitles them to compensation or an opportunity to scale up to an interconnected mini-grid should a distribution licensee encroach on the mini-grid operator's site.
The interconnected–mini-grid, as the name implies, is connected to a Distribution Licensee's network and is to be deployed in an underserved area, referring to an area with an existing but poorly supplied or non-functional distribution system. Going by the definition of an underserved area, any area in Nigeria with intermittent power supply might as well qualify for the installation of an interconnected mini-grid.
Where a Mini-Grid Developer desires to operate an interconnected mini-grid, the Regulations require that such Mini-Grid Developer enters into a tripartite contract with the community and Distribution Licensee to construct, operate and/or maintain an interconnected Mini-Grid in an Underserved Area. The Tripartite contract only becomes binding on all parties upon the approval of the NERC.
Operating mini-grids provide energy competitively compared to the alternatives of the grid and diesel-powered self-generation. In Bisanti, GVE charges a price of NGN208 per kWh (US$0.58 per kWh). The grid provides power at a lower price (between NGN4 and NGN24 per kWh in 2015 for Abuja DisCo). However, supply from the DisCo is very unreliable, with less than three hours of supply per day in the connected village closest to the GVE mini-grid in Bisanti. Another mini-grid developer intends to charge a price of NGN140 per kWh in another location (US$0.39 per kWh). According to customers interviewed during field visits, diesel self-supply is much more expensive, at around US$50 per month, compared to an average household bill between US$3 and US$6 per month with the mini-grid.
Most mini-grid customers include both households and businesses. Economic activity is one of the key parameters when choosing a site.
Mini-grids use a limited array of business models. The main commercial solutions used by operators are:
● A combination of smart prepaid meters together with scratch cards, and a connection fee paid once. (ECREEE (2016). In Vincente, customers purchase credit from the local GVE representative. The representative then requests a code from GVE’s staff, which the customer inputs in its meter. The meter is credited with the amount of energy purchased.
● The Pay-As-You-Go (PAYG) model using a mobile phone, particularly for solar systems. Arnergy, through its ‘solar rental system’, allows customers to pay a daily fee of NGN50 (US$0.14) for a ‘tier 2’ service. (Medium (2016),
● Cross-subsidies. For example, in Tunga Jika, Nayo charges a higher tariff to business customers (a market and mills for agro-processing and offers an upfront subsidy for connection and
● bulbs to residential customers.
c) Stand-Alone Systems (SAS)
The SAS sector is nascent and fast-growing, and stakeholders have committed to its rapid expansion. The Nigerian government looks to add 5 million new solar connections through the solar home system and mini-grids by 2023 under the 2020 Economic Sustainability Plan, reaching 25 million people (NESP, 2020). This builds on a young and growing sector, comprised of international companies that have established traction in other markets for example BBOXX, Lumos, Zola Electric, d.light, Azuri, and Oolu and often smaller but established local companies such as Sosai Renewables, Arnergy, Blue Camel, Consistent Energy, and ColdHubs, among others. Combined, these companies have an annual revenue potential of USD 1.2 billion, presenting opportunities for both private and public investments (REA, 2019). The target beneficiaries are people in off-grid locations or underserved customers that have inefficient and unreliable energy access.
Stand-alone solar photovoltaic (PV) systems offer a viable option in areas where mini-grids are not sustainable. Several relatively well-established solar PV companies are now operating in Nigeria, utilizing cash sales and pay-as-you-go (PAYG) business models. For these companies to grow rapidly they must fund an ever-increasing amount of stock in the supply chain and invest substantial amounts in building their 'soft infrastructure' to reach and serve new customers.
Key regulatory challenges include:
- 25 percent combined import duties and value-added tax (VAT) on imported solar components (which is
- transferred as an additional cost to customers); streamlining mobile payment systems; and ensuring high product standards.
Key financial barriers include a lack of access to local currency loans for operating expenses and hard currency loans for capital costs.
Limited or poor implementation of SAS-specific regulation has failed to provide sector actors with the confidence necessary to enter the market.
Unfavorable fiscal policy for solar components increases product prices, reducing affordability and hence market penetration
Current consumer payment platforms from financiers are not easily accessible to rural communities, due in part historically to regulation. Up until2018, Nigeria’s Regulatory Framework for Mobile Payment Services (2009) excluded mobile network operators from providing mobile financial services, despite Nigeria’s relatively high mobile phone penetration rate of ~87 percent (Shell, 2018)
d) Renewables
From a policy perspective, policies made by the Government relating to renewables and incentives available therein are encapsulated in the National Electric Power Policy (NEPP), and the National Renewable Energy and Energy Efficiency Policy (NREEEP). Incentives include;
● Free Custom Duties for two (2) years on the importation of equipment and materials used in renewables and energy efficiency projects
● Allows for project developers to obtain soft loans and special low-interest loans from the Renewable Electricity Fund for renewable energy supply and energy efficiency projects.
● Advocates for the Government to ensure that an appropriate economic instrument is put in place to allow generators of renewables to obtain preferred pricing and rates as they sell.
● Tax incentives to manufacturers of renewable energy and energy-efficient equipment and their accessories. Incentives include: (i) five-year tax holiday for manufacturers from date of commencement of manufacturing; (ii) five-year tax holiday on dividend incomes from investments in domestic renewable energy sources.
e) Energy efficiency
The National Renewable Energy and Energy Efficiency Policy (NREEEP) were approved in May 2015. The policy placed a high premium on energy efficiency and conservation as a means of improving overall access to modern energy service, the policy also recognizes energy efficiency as a resource that could be traded in the electricity market. So far several ministries, departments, and agencies (MDAs) of federal and state governments in Nigeria are beginning to be involved in various aspects of energy efficiency and conservation. Key MDAs active in promoting energy efficiency and conservation include the Ministry of Power, Works, and Housing, Ministry of Environment, Ministry of Industry, Trade and Investment, Standard Organization of Nigeria, Nigeria Electricity Regulatory Commission, Energy Commission of Nigeria as well as the University of Lagos – National Center for Energy Efficiency and conservation (NCEEC).
According to the SE4ALL Agenda Nigeria, there is no real business model that currently exists for Energy Efficiency, business strategies should encourage and allow private sector participation.
f) Clean cooking
There is no standalone policy for clean cooking in Nigeria, however, there are policy guidelines that affect clean cooking in several official documents. One of such is promoting the domestic utilization of gas, among others, by encouraging indigenous manufacture of gas cylinders and other accessories and building gas filling stations to support the adoption and use of LPG. It specifically seeks to create one million jobs through the conversion of 30 million homes from dirty fuels to LPG and includes the removal of a 5% value-added tax. (COVID-19 stimulus plan; Nigerian Economic Sustainability plan 2020). The National Energy Policy, 2018 emphasizes the efficient utilization of energy resources for sustainable national development with the active participation of the private sector. It calls for the promotion of efficient biomass cookstoves and other fuels and technologies for cooking. The National Biofuel Policy, 2007 pledges to expand private-sector investments in the domestic production of biofuels, with the government creating an enabling environment for the achievement of 100% domestic production of biofuels consumed in the country by 2020. The Renewable Energy Master Plan (REMP), 2004 and 2012 set targets for the use of clean biomass technologies for cooking. National Renewable Energy Action Plan (NREAP), 2016, targets 100% clean-cooking-fuel coverage by 2030 by providing improved cookstoves (59%), efficient charcoal production (7%), and modern fuel alternatives for cooking including LPG and ethanol gel fuel (34%). The policy and regulatory framework on clean cooking call for the development and adoption of national cooking policies, strategies, and targets aim at reaching market transformation towards modern and alternative fuels and efficient devices to reduce health and environmental impacts of traditional fuel use on the people.
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8. Existing major Energy Projects
a) Large Energy Projects
I) Hydro Project: Mambilla Hydropower Project
Mambilla hydropower project is a 3.05GW hydroelectric facility currently being developed on the Dongo River near Baruf, in Kakara Village of Taraba State, Nigeria. The project is being undertaken by Nigeria's Federal Ministry of Power, Construction, and Housing, with the help of Chinese investments. Expected to commence operation in 2030, Mambilla will be Nigeria's biggest power plant, producing approximately 4.7 billion kWh of electricity a year.
The project is estimated to cost $5.8bn and will generate up to 50,000 local jobs during the construction phase.
Mambilla hydroelectric facility comprises four dams and two underground powerhouses having 12 turbine generator units in total. The four dams to be constructed on the Dongo River for the Mambilla hydropower project include Nya (formerly known as Gembu), Sumsum, Nghu, and Api Weir dams.
The power generated by the Mambilla hydroelectric facility will be transmitted to the national grid by four 500kV DC transmission lines connecting Makrudi, and one 330kV DC transmission line connecting Jalingo. (Culled from https://www.nsenergybusiness.com/projects/mambilla-hydropower-project-nigeria/)
II) Renewables: 1mw Interconnected Mini-Grid
Determined to improve on the power supply, the Abuja Electricity Distribution Company, AEDC, introduced an interconnected mini-grid project that will guarantee consumers a 24-hour electricity supply.
To this end, a tripartite agreement was signed between the Abuja Electricity Distribution Company, AEDC, Green Village Electricity, GVE, and the Wuse Market (An important central economic hub in the Federal Capital Territory, Abuja) Association for the development of 1MW interconnected mini-grid at Wuse market.
GVE is for-profit energy access mini-utility social enterprise that uses prepaid metering technology and credit analytics platforms to deploy PV solar solutions to rural / Peri-Urban communities, small and medium enterprises, and residential homes across west Africa.
The interconnected mini-grid is a power system that receives electricity from both the national grid and an off-grid source for onward power supply to users. By far the first project of its kind in sub-Saharan Africa, the power project is aimed at providing clean, safe reliable, and affordable electricity to Small and Medium Scale Enterprise, SMEs under the Energizing Economies Initiative.
The interconnected mini-grid will be deployed through 3 independent hybrid PV solar systems of 450kWp, 350kWp & 200kWp to serve 3 distinct segments of the Wuse market.
The initiative has provided support to the delivery of energy to power users by augmenting grid supply, as well as reduce the Electricity Distribution Company (disco) losses in clustered underserved areas. The project will guarantee the supply of uninterrupted power to over 2,000 Small and Medium Scales enterprises and boost economic growth. (Culled from Vanguard Newspaper, 2019).
III Nuclear Energy
In recognition of the need to improve the national electricity supply in the country, and explore the potential of nuclear energy, the Federal Government of Nigeria (FGN) established Atomic Energy Commission (NAEC) as the focal promotional institution to provide the technical leadership to achieve this national objective. NAEC developed a technical framework that would serve as the road map for achieving the set goals for nuclear energy in Nigeria. Furthermore, an initial Strategic Plan for the Implementation of the National Nuclear Power Programme in Nigeria was approved in December 2009. Since then, several refinements have been made to the implementation strategy, taking into consideration many technical factors including technology, financing, ownership, and contractual issues, with a more realistic timeline that will result in the commercial operation of the first nuclear power plant (NPP) with the injection of at least 1,200 MWe to the national grid by 2025, and increasing the capacity to up to four NPPs of 4,800 MW by 2035.
b) Rural Electrification Projects
The sole mission of the Nigeria Rural Electrification Agency (REA) is to provide access to reliable electric power supply for rural dwellers irrespective of where they live and what they do, in a way that would allow for a reasonable return on investment through appropriate tariff that is economically responsive and supportive of the average rural customer. To achieve this, the Rural Electrification Fund (REF) was established by the section 88 sub-section II of the Electric Power Sector Reform Act of 2005 to provide support for the development of the on and off-grid sectors for the power/energy sector to thrive, by:
- Achieving more equitable regional access to electricity
- Maximizing the economic, social, and environmental benefits of rural electrification subsidies
- Promoting the expansion of the grid and the development of off-grid electrification
- Stimulating innovative approaches to rural electrification provided that no part of the REF shall be used as subsidies for consumption.
Plans to provide necessary infrastructure and electricity to rural areas can be traced back to the 1980s with the introduction of the Nigerian Rural Electrification Programme. The aim of initiating this program by the Federal Government was to expand electricity access rapidly in rural areas and to ensure that energy services are available and affordable in a cost-effective manner. However, this goal is still far from being reached. The Current (2015) estimate shows that only about 26% of rural households have access to electricity. Growth in demand for electricity in the rural areas of Nigeria has outpaced supply and population growth has driven the rate of new household formation higher than the rate of new connections (Sustainable Energy For All Action Agenda). As a result, rural households still rely on fuel-wood and other expensive, unhealthy, and unsustainable sources of energy (Draft Rural Electricity Strategy and Implementation Plan 2015). Reaffirming its commitment to reaching the proposed 75% electricity access by 2020, and 100% by 2040, the Federal Government of Nigeria in the draft RESIP 2015 estimated that a service extension to additional 471,000 rural households each year will be required from 2015 to 2020; and an annual additional 513,000 rural household connections from 2020 to 2040. The cost of reaching these targets is estimated between NGN 317.8 billion and NGN 525.8 billion (a minimum of NGN 50billion per annum). These figures include administration and project costs respectively. It is therefore clear that the required funding and investment will come from a combination of sources including the FGN, other Nigerian Government entities (e.g., State and Local Governments, relevant Ministries), electricity companies and customers, international donors and development banks, commercial banks (both domestic and foreign), RE scheme operators and customers (i.e., end-users), and equity investors. In taking the drive forward, the Federal Ministry of Power on behalf of the Government has re-designed the Operation Light-Up Rural Nigeria initiative from the conventional Micro-grid with no payment system to an off-grid Micro Utility with the full functionality of pre-payment and power management systems integrated to collect revenue from the project and manage load demand, thus creating the Renewable Energy Micro- Utility (REMU). REMU is designed to be a Sustainable Platform for Integrated Economic Empowerment (SPIE) through the development of renewable energy resources in Nigeria in an economically attractive manner. It is estimated that each project under the REMU initiative will cost between USD ($) 3.5 million and USD ($) 6 million, for a fully integrated functional REMU of capacity range of 500 kW – 1000 kW, funding options currently explore include Green Bonds and other forms of private partnership financing.
In 2020, REA completed 7 mini-grids and deployed over 6,000 Standalone Solar Home Systems to off-grid communities across the nation under the Rural Electrification Fund (REF). 3 mini-grids and 2 grid extension projects were also delivered using the Federal Government’s Capital Appropriation. 3 others were delivered through the Performance-Based Grant of the World-Bank and AfDB-funded Nigeria Electrification Project (NEP) and one project was delivered under the Energizing Education Programme (EEP)
The Nigeria Electrification Programme is fully aligned with the Rural Electrification Strategy and Implementation Plan and also supports the Power Sector Recovery Plan (2017-2021) objectives to increase private investment into the energy sector, including implementation of rural energy access and off-grid/mini-grid energy services.
Some of the programs currently being implemented are:
- Solar hybrid mini-grids. The NEP solar hybrid mini-grids component aims to accelerate private-sector delivery of mini-grids in off-grid communities.
● Mini-grid: generation and distribution system capable of serving at least 2 end‐users, independently from the national grid.
● Technical focus – Solar PV generation with battery and diesel backup.
● Prepaid metering to mitigate revenue and collection losses and support project bankability
The objectives of this component are to:
● Accelerate private sector delivery of mini-grids in off-grid communities
● Develop mini-grids on a build-own-operate model and catalyze mini-grid deployment at scale to kick-start the market
● To electrify unserved and underserved areas with high economic growth potential
● To energize households, local enterprises, and public institutions within the mini-grid sites.
● The target is to electrify 105,000 households and 20,000 MSMEs through a USD 70,000,000 funding mechanism from the African Development Bank
B. Minimum Subsidy Tender for Solar Hybrid Mini-Grid. The NEP solar hybrid mini-grid component aims to support the development of private sector mini-grids in unserved areas across Nigeria. The component targets to electrify 300,000 households and 30,000 local enterprises.
The objectives of this component are to:
● Provide clean, safe, and affordable electricity to communities that are currently not connected to the national electricity grid.
● Increase business productivity by replacing generators, lanterns, and candles with reliable electricity.
Sub-components:
● Minimum Subsidy Tender (MST); aims to electrify pre-selected communities that have high economic growth potential through a competitive tender. The communities to be electrified under the MST are identified, verified, and sensitized by the REA/NEP.
● Performance-based Grant Program (PBG); aims for the development of mini-grids on a rolling basis. The communities are identified, verified, and sensitized by mini-grid developers and they may also use this window to support the development of pre-planned projects in their portfolios. Eligible projects are solar and solar hybrid systems in unserved areas, with a generation capacity of not more than 1MW.
The total funding available for the component is US$150million
C. Standalone Solar Home Systems for Households and MSMEs. The objective of the Standalone Solar Home Systems for Households and MSMEs component is to help millions of unserved and underserved Nigerian households and Micro Small Medium Enterprises (MSMEs) access better energy services at an affordable cost, via stand-alone solar systems through the private sector companies. This in turn will significantly scale up the market for SHS in Nigeria.
D. Energizing Education Programme II, Energizing Education Programme III: Access to a constant power supply in educational institutions and healthcare facilities in Nigeria has been identified as a major challenge and barrier to effective learning, institutional operations, student residency, and access to quality healthcare
Considering the role of arguably the most important sectors in driving socio-economic development in Nigeria, being Education and Health, the Federal Ministry of Power through the Rural Electrification Agency (REA), resolved to embark on viable projects that will ensure the availability of clean, reliable, sustainable and affordable power to Nigeria’s Federal Universities and University Teaching Hospitals.
Given the foregoing, the 'Energizing Education Programme' (the "EEP"), was approved by His Excellency, Muhammadu Buhari, in 2016, with the overall objective to provide reliable, affordable, and sustainable power to 37 Federal Universities and 7 Teaching Hospitals through renewable energy solutions.
The EEP Phase II will see to the implementation of this Federal Government of Nigeria’s (FGN’s) objective in 7 Federal Universities and 2 University Teaching Hospitals, across the 6 Geopolitical Zones in Nigeria. The phase II institutions are:
Table 10: Federal Universities and Teaching Hospitals under EEP Phase II
| Federal University of Agriculture, Abeokuta | Ogun | South-West |
| Michael Okpara University of Agriculture, Umudike | Abia | South- East |
| University of Calabar & Teaching Hospital | Cross River | South-South |
| University of Maiduguri & Teaching Hospital | Borno | North-East |
| University of Abuja | F.C.T | North Central |
| Federal University Gashua | Yobe | North-East |
| Nigerian Defence Academy | Kaduna | North-West |
Funding breakdown of the EEP Phase II: USD105 million has been earmarked for the implementation and this covers the EPC for the power plant, streetlights, rehabilitation of existing distribution network, one-year operations, and maintenance, and the training center components.
The EEP Phase III is a Federal Government of Nigeria initiative tasked with developing off-grid, dedicated and independent power plants, as well as rehabilitating existing distribution infrastructure, to supply clean and reliable power to 37 federal universities and 7 affiliated university teaching hospitals. In addition, it will provide street lighting for illumination and safety, as well as a world-class renewables .training center at each of the EEP beneficiary institutions
Phase III is being funded by the African Development Bank (AFDB) in respect of 8 universities. The universities under this Phase will utilize technologies based on solar (11 MW) technology and/or gas (8.5MW) power systems.
The objectives of this component are to:
● Provide reliable, affordable, and sustainable power to Federal universities.
● Develop and operate training centers for training of students in renewable energy technology
● Install streetlights to improve security within the beneficiary universities.
Engineering Procurement Construction (EPC) and Operations & Maintenance (O&M) Contracts; this will involve contracts with competitively selected EPC contractors to build, operate and maintain the power plants at each site and also build and equip the training center. The total funding available for the component is US$100million
a) Case Example of the Provision of Modern Energy Access
The Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including poverty, inequality, climate change, environmental degradation, peace, and justice.
To select a case example of modern energy access, we considered an organization and program that has made an impact in not just clean and modern energy access but has also gone ahead to create impact in other sustainable developmental goals.
- ENERGY
One of the biggest challenges we face in Nigeria is the intermittency of power, the unreliable national grid, and the energy deficit across the value chain. Nigerians have long used diesel generators and have gotten comfortable with them. Energy intends to solve this by accelerating the adoption of renewable energy solutions. With the belief that success will be based on prioritizing consumer education and providing resources that enable a seamless conversion that will help in creating brand awareness and product adoption.
Energy is a distributed utility company that offers commoditized solar + lithium storage solutions in Africa. With a vision is to provide sustainable solutions to energy reliability issues across emerging markets. Energy deploys solutions to these challenges in fully customized modular variants such as Arnergy 5000X, Energy 5000, and Energy 10000. The company designs manufacture and commoditizes technology-enabled solar micro-grid and rooftop solutions providing affordable and energy reliability for SMEs and communities.
Energy complies with notable international Environmental, Social, and Governance (ESG) standards to ensure to leave a positive impact on people and the environment. Their internal practices have been aligned with such standards as the International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability. Their commitments include safely executing projects to protect employees' well-being and the surrounding working environment.
ESG commitments made by ARNERGY also drive them to ensure business produces a larger development impact in society and record several applicable developmental impact indicators to help them track their impacts and for stakeholder feedback. According to its 2020 Impact report, the impact of Energy can be grouped into the following headings:
- Energy and the SDGs.
The United Nations Sustainable Development Goals (SDGs) represent achievable targets that Arnergy is proud to participate in. Our business activities and operations contribute to the following goals:
● SDG 3 (Good Health and Well-being): Arnergy has contributed directly to the readiness of public health agencies to respond to COVID-19 and other health emergencies
● SDG 4 (Quality Education): Arnergy provides an opportunity for an internship program for students and young graduates to learn valuable skills in renewable energy engineering and other aspects of the economy
● SDG 5 (Gender Equality): In Arnergy, more women are provided with opportunities to lead teams in the company and achieve gender balance in management while closing the gap in other roles
● SDG 7 (Affordable and Clean Energy): Arnergy products provide affordable and clean energy to a wide range of customers
● SDG 8 (Decent Work and Economic Growth): Providing a decent work environment for employees and third parties. This has shown in their resilience during the covid-19 pandemic - ensured that employment opportunities were maintained for many despite the general downturn.
● SDG 13 (Climate Action): All Arnergy renewable energy products utilize solar energy for power thus reducing the contribution of GHGs into the atmosphere which is a major contributor to climate change. Arnergy’s solar-powered solution provides clean, renewable energy for businesses and households and presents a sustainable alternative to fossil fuels. This is very important in combating the climate change issues currently face in many parts of the world including Africa. Every kilowatt of power generated through their solar solutions represents the power that would have otherwise been generated by burning fossil fuels that release CO2 and other greenhouse gases (gases that warm the atmosphere). At Arnergy, this data is collected to help track efforts towards reducing global warming in line with international climate change agreements like the Paris Agreement
● SDG 9 (Industry Innovation and Infrastructure): Arnergy products are being adopted in urban and rural areas to support industry and critical infrastructure.
● SDG 17 (Partnerships for the Goals): Arnergy participates in and leads several stakeholder partnerships to improve environmental benefits and reduce environmental pollution in line with the SDGs.
- Greenhouse Gas Emissions Avoided
Arnergy systems generate electricity with photovoltaic cells from solar energy which is abundant, clean, and does not release pollutants into the atmosphere unlike other sources of electricity. At the core of our business is reducing greenhouse gases released into the atmosphere while providing energy to households and businesses. Tracking GHGs avoided through the use of their systems is important for assessing contributions to several global sustainability goals like the UN SDGs, Paris Agreement, etc. According to Arnergy 2020 Impact Report for the period (July 2020 – December 2020), 441,100 kilograms of CO2 equivalents were avoided through their systems. The impact of GHG saved through reporting period is equivalent to:
- 95.2 cars off the road for one year
- The electricity used by 75 homes one year
- 187775.35 liters of petrol (gasoline) burned for running automobiles
- Carbon sequestered by 3 acres of coniferous forest for 1 year
- Carbon sequestered by 7289 tree seedlings grown for 10 years
- Energy Generation Capacity
Arnergy systems can combine solar energy, battery storage, and grid energy to provide electrical energy for our customer use. This capacity is reflected in the overall generation capacity of the boxes in kilowatt. This capacity has gradually increased over the reporting period with significant growth recorded in December 2020. A total of 1230kW of our energy solutions was deployed in the reporting period.
- Energy Storage Capacity
Energy storage is a key element of Arnergy systems as it stores primarily renewable energy generated for use at night and/or at periods where poor atmospheric conditions may reduce energy generation through the photovoltaic panels. Arnergy batteries are Lithium polymer types that store a high amount of energy with a shorter recharge period compared to the lead-acid alternatives in the market which have a shorter lifespan and reliability. Their custom configuration options mean that they can deploy a varying number of batteries for each installation
- Waste Batteries Recycled
Hazardous elements of renewable energy deployment are taken into consideration. With the institution of responsible e-waste recycling by joining the e-Waste Producers Responsibility Organization of Nigeria (EPRON) to follow best practices in e-waste recycling and to comply with environmental safeguard regulations. The first step was the recycling of lead-acid batteries from our legacy systems through vendors verified by the Federal Ministry of Environment and members of the Alliance for Responsible Battery Recycling (ARBA) Producer Responsibility Organization. About 1988kg of legacy lead-acid batteries has been recycled through the reporting period (July 2020 – December 2020),.
- Gender Balance
An important indicator at Arnergy is gender balance among employees, especially among full-time employees. Providing opportunities for women in the workforce is an important target for the company which aligns with the UN SDG Goal 5 among several ESG performance standards and has better outcomes for our economy.
- REA’s Energizing Economies Initiative
The Energizing Economies Initiative (EEI) is a Nigerian government initiative being implemented by the Rural Electrification Agency. EEI focuses on providing access to electricity for unserved and underserved economic clusters across the country. Four pilot mini-grid projects serving clusters of economic activity have been implemented to date, Ariaria Market in Abia State, Sabon Gari Market in Kano State, and Somolu Printing Community and Sura Shopping Complex, both in Lagos State. REA is seeking to launch 300+ off-grid projects across the country by 2022, in a phased approach, with the first phase covering 13 different markets in 6 states (Rural Electrification Agency,)
The model being adopted in the energizing economies (markets) initiative by REA shows a more positive approach which demonstrates the commercial viability of these sites/projects. This is made possible as the uptake from these markets is 100% productive load capacity. REA is currently in the execution of the first phase of the project to electrify over 13 economic clusters. Overall, EEI is expected to provide clean and reliable power supply to about 80,000 shops, empower more than 200,000 Micro, Small, and Medium Enterprises (MSMEs), create over 2,500 jobs and serve more than 7 million people (REA, EEI)
