Insights from the Nextier Power Dialogue
The Nigerian advisory and investment firm, Nextier Limited and Nigeria Electricity Hub, held their 2nd Power Dialogue themed Renewable Energy: Implementing Off-Grid Technologies in a Nascent Electricity Market on the 24th of August 2016. The event took place in the picturesque Thought Pyramid in Abuja and featured panelists Tinyan Ogiehor of Solar Nigeria, Yesufu Alonge of Nigeria Bulk Electricity Trading (NBET) and Dr Diko (standing in for Dr Akah) of Nigerian Electricity Regulatory Commission (NERC).
Many of the participants were quite enthusiastic about renewable energy, if the passion with which many spoke is anything to go by. Both the panelists and commentators from the audience resonated this passion during discussions. Although perhaps unintentionally but unsurprisingly, the discussions were skewed toward solar energy, and touched briefly on hydro-electric. Still, several themes were recurring. Although Nextier will be sharing the communique from the event, below are my key takeaways from the discussions at the event:
This is a good time for solar in particular
You might have noticed the large number of entrepreneurs and start-ups that are now focused on providing solar energy. This is because the time is just right for Nigeria - fuel prices have almost doubled so discouraging people from busing diesel; the cost of solar technology is tumbling fast globally; apparently you can get a fee exemption from importing solar products into Nigeria, which is encouraging; epileptic (more than usual) grid electricity has continued to frustrate people even more, caused by low fuel prices and the antics of the Niger Delta Avengers; etc. What's more, solar is probably the easiest technologies to install off-grid! On a macro scale, the renewed focus on climate change has helped matters too - nations and cities, Nigeria amongst them, are looking to reduce carbon emissions as much as possible, and solar is perfect for this.
There needs to be more investment into micro hydro-electric dams
I was quite surprised to hear that there are many potential micro hydro-electric dams, just sitting pretty and waiting for investors to set them up. What's more, given the increased government emphasis on agro-processing, several of such businesses are starting up and looking for reliable energy sources. It's rather unfortunate though, that these investment opportunities are not better known…there undoubtedly needs to be more targeted awareness and information about it.
Nigeria needs a renewable energy champion
There are now so many actors in renewable energy, and all are making great strides individually. But there needs to be an integrated approach for progress to be timely and significant. This is especially important in order to drive the renewable energy agenda with policy makers. This champion/body/coalition of bodies will be part of discussions about renewable energy on a policy level and will ensure that the needs of the different actors will be considered, collated, and cohesively put forward directly to the Presidency in order to champion the significant increase of renewable energy in the Nigerian energy mix.
More awareness is needed about solar energy
Even amongst the participants, there was some amount of skepticism about solar in particular. It was revealed that some pre-event questions sent in by participants showed that some really don't believe that solar works. There were even faint gasps of surprises when two participants said they used solar in their homes. The myths abound, but they mainly revolve around the thoughts that solar energy can only carry electronics, but can't carry larger energy consumers like air conditioners; also that the costs of installation and maintenance of solar can only be much higher than being on the grid or using the ubiquitous diesel generators. These myths need to be addressed by solar actors, both individually and as a group, so that both the masses and political actors can appreciate the technology better, and begin to adopt it.
Solar providers are confused about the Nigerian consumer
A source of intense debate was whether or not Nigerians are willing to pay conventional prices for off-grid solar, much less pay a premium for it. Solar providers need to understand their market, and identify why Nigerians have typically attempted to escape paying for grid electricity; why many of them feel that provision of electricity is a social venture as opposed to a commercial one; how much premium they would be willing to even pay (the current premium price of about N84 per kw for off-grid solar verses N24 per kw for grid electricity is not cutting it); and what would best motivate consumers to take advantage, and pay for, off-grid solar.
Nigeria needs to copy shamelessly from others who have gotten solar right
A point of agreement though, was that Nigerian solar developers and providers lack the capacity they need to manufacture and innovate. So it's important that these actors should be looking to learn lessons from countries (e.g. Kenya) and players who are getting solar energy right. They should look out for what kinds of products work, what kind of payment plans are preferred, and how these can be adapted to the Nigerian context. This is no small matter, and a lot of lessons need to be learnt through trial and error. Still, the wheel does not have to be reinvented, and reverse-innovation should be encouraged.
Solar providers need to be more creative to further off-grid solar in Nigeria
This ties in to all the points above. In order to advance renewable energy in Nigeria, and solar energy in particular, actors need to get creative, e.g. in the financial plans they offer to consumers in order to reduce the cost of using off-grid solar and make it competitive with grid electricity; in putting forward the case for solar energy to regulators; in collaborating and working together; in creating awareness for mass acceptance of the technology; and in many other areas.
All in all, it was agreed that despite the many challenges of solar, e.g. lack of awareness, substandard solar products being imported, high relative costs of off-grid solar for consumers, etc., the opportunities still shine through. Being a nascent product in the Nigerian market, and indeed around the globe, it is expected that the learning curve will be steep, but that renewable energy actors in Nigeria are up to the task.