Malo: Renewable Energy is the Way Out of Nigeria’s Power Deficit
Ify Malo, the immediate past senior policy advisor on energy, regulations and partnerships to former power minister, Prof. Chinedu Nebo, leads the Power for All in Nigeria, a global advocacy network for renewable energy usage in countries with chronic energy shortage. She told Chineme Okafor in this interview that renewable energy is best way out of Nigeria’s protracted electricity challenges. Excerpts:
What does Power for All do, and why are you in Nigeria?
Power for All is a global campaign organisation, and we are a non-profit organisation; completely donor funded by the Department for International Development (DFID), which is our major funder and a few other private foundations. Our core mission is to drive and promote for decentralised renewable energy usage in all of the markets that we operate in.
This is premised on the fact that there are currently one billion people in the world without electricity, and a good chunk of that number is in sub-Saharan Africa. We believe that renewable energy is the only way that sub-Saharan African countries like Nigeria can accelerate energy access and alleviate energy poverty to make sure we are getting to parity when it comes with electrification rates with other developed countries.
In Nigeria, I create that collective voice to help shape policies and ideas to drive projects within the country in the area of decentralised renewable energy deployment.
You mean your organisation is strictly focused on accelerating projects, not execution?
Yes, that is what we do. We work with a lot of stakeholders who are project developers in the renewable energy sector, one of the things we believe is that part of the problems of renewable energy and solar especially is that it has gotten a bad rap in Nigeria and this has created some level of mistrust of solar technology within the market and while we have these developers doing amazing jobs electrifying rural and semi-urban communities, their stories are not being told and because they are not getting the kind of publicity they require, they are not doing enough projects that can help them to scale to market or that can bring more investments.
Our job really is help these project developers tell their stories, provide case studies, talk about how this is benefitting people and how it is creating social impact cascades across the communities they work in so that in another way it can help investors see what is going in in Nigeria and push them bring in money to support these developers. That is what we do in terms of project development in Nigeria, we don’t go ahead to execute projects.
Could it be that the bad rap on solar and renewables came from their reported fickleness?
There is a perception based on projects that were done in the past which were poorly executed that solar does not work, and the reasons some of those projects did not work was either because they were given to inexperienced contractors who shouldn’t have gotten those sort of jobs in the first place, and were not technically competent, or installations were put in place and people went ahead to vandalise them and after a while they stopped working so that became the narrative people ran with that solar is not dependable.
However, we have seen countries that have completely run their systems on solar for more than one year as a test model, and if a whole country can run on solar even if they are as small as one Nigerian state, then we should have states here that are completely off grid and on solar because the technology is improving fast and we believe there states that can benefit from this.
Can industrial hubs of countries run on solar or renewables?
When you have countries like Germany and Sweden running on solar that presupposes that their manufacturing outfits run on solar. Germany is far ahead in terms of how they have deployed solar, and they are showing what is possible.
There are developers in Germany that are doing micro grids that can cover huge demands of electricity in terms of megawatts, and I am talking about utility scale solar power deployment which is almost as much as what you can get using gas.
What we focus on however in Power for All is smaller parts, the stand-alone systems that can be used in homes because we believe those are the sort things that can scale quickly in Nigeria and be beneficial to its people, we are not against the big renewable projects though, we in fact believe there is a ready market for them here, but we think we can move quicker with the small stand-alone systems for homes and people who have not really enjoyed good power supply.
But solar or renewable is said to be quite expensive to deploy to home?
There is a high capital one-off cost that is associated with deploying solar technology, that is true, however, there also policy measures that can be put in place to drive this down. In some of the east African markets, what the governments have done is to put zero tariffs when it comes to anything that has to do with solar technology – the batteries, panels, or components for the technology.
In Nigeria, we have zero duty for panels and about 25 per cent duty for batteries. Unfortunately, we don’t distil between deep cycle batteries which we use for cars and solar batteries and that creates a high cost.
If we can get to the level that the eastern Africa market has got to and say zero tariff to anything associated with solar, it will greatly drive the cost down and that is some of the advocacy we want to begin to drive with the government.
The government isn’t interested in subsidy for solar, can such duty free policies help scale its use in the country?
I honestly think so because one of the things about policies is that they have the ability to shape markets in very granular ways and it will remove a lot of bottlenecks that most of the developers that are doing projects across the country are facing. It will provide clarity about what their overhead costs are and what kind of costs get passed down to the consumers eventually.
I believe that getting to a zero duty regime will certainly make the market a lot cheaper but also, I think developers can begin to think of creative ways of how to scale to market. There is something called securitisation in this market that we beginning to try to get people to look at. The PPAs are one way but the smaller companies that are doing smaller projects don’t have that luxury, we want to see if there is way to bring them together to begin to so bigger projects.
What are some of the significant challenges that promoters have shared with you?
There are two things – access to finance and access to market. Access to finance is exactly what we talked about, the ability for them to go to banks in their Nigeria to support their businesses isn’t there. Banks are lending in double digits with paybacks not in long terms. This creates a lot of barriers of entry because the market itself is not developed.
The other is access to market. Our geographical spread as a country makes us a very large market and some of the elements for generating renewable energy differ from place to place and so while there is a lot of sunlight in the north, that might not be the case with the south or in the middle belt that is actually very windy.
It is all about understanding these and penetrating them, as well as overcoming some issues to access to market. We haven’t seen an overriding policy that can make it easy for people to go through some of these, everybody has to do it on an ad-hoc basis, which is why we have an association for the sector – the Renewable Energy Association (REA), so that they can go as a collective voice to negotiate these issues with the governments, banks, lenders or even communities and then there will be much more crosscutting collaboration in this.
If this sort of clarity isn’t within the country’s renewable energy policy, what’s its use then?
The policy is one thing and every policy has its objectives and action plan which lays out the step by step metrics to reach the goals in the policy. A policy just sets out targets but when there is an action plan, you have what is to be done on a step-by-step process to attain the goals.
I understand we have a draft action document that is yet to be passed, again, I understand they probably have to take into consideration the views of stakeholders but one of the things we want to see in that action document is that there is inclusiveness in the plan so that the benefits of having renewables is spread across the country so that everybody understands that it can work for them.
Are we just waking up to the potentials of renewables?
Well, there is the potential but no communication and this is where my organisation comes in. we are hoping to ramp up that publicity because we believe there is a lot that has been done in this market and a lot is yet to be done.
Most of the news around renewable gets overshadowed with what is happening with our grid and because we have relied on the grid so far to supply us electricity, it has become a new whenever anything happens to it. We are hoping to shift a bit from that because there is lot going on currently with the grid that isn’t helping with our electricity.
Renewables are not competing with the grid but can go along with it to help increase electricity penetration in the country. We can quickly get to 10,000 megawatts with renewables and these are some of the targets we get to hear.
We also want to begin to let people know that they can trust this technology when people see case studies and how it has helped people.
When compared with rates of regular power supply, how much will it cost a Nigerian home to go off-grid?
Well, quite interesting. We get asked this all the time but the simple answer is that Nigerians are already paying a lot to generate their own electricity, they probably don’t know this.
When you do a modelling cost of how much you use for electricity both from alternative sources as well, you will see what the cost comes to say in a year. Solar is actually cheaper, the only challenge is that you need that high one-off cost to pay for it and which is what a lot of people struggle for.
That is why we talk about consumer financing to the market, working with the banks to create products that people can go and get just the same way they can get loans for anything and be servicing it for a period. There are churches in Nigeria that have already moved off-grid because it doesn’t make sense for them to continue on the same system that has not really worked.
Nigerian can pay, they are already paying and I think the only concern is that one-off payment, so that leaves out the doubt that this can work in Nigeria.
Are you able to assess the power sector, you’ve being around here for a while now?
I think the problems in the sector remain and have in recent times escalated with what is happening with our gas production. This creates a huge opportunity now for solar to become the mainstream. The government should consider this and most specifically decentralise renewable as a way to begin to pivot from grid and gas connected electricity because some of the issues with our gas probably won’t be solved in short or medium term, this need long term solutions and Nigerian cannot wait further.