How WATT Renewables is scaling Nigeria’s off-grid business
Faced with a population of about 120 million people living without access to reliable and affordable power, a private sector clean energy technology producer, WATT is bridging the short falls in Nigeria energy mix with bold innovations, social investments, and local capacity development.
Power inadequacy is a major impediment to growth in Africa’s largest economy, where four in every five people in the over 200 million population lack access to grid electricity and those that have are often at the mercy of perennial blackouts.
That has opened up a gap in supply and created an opportunity for a number of solar power firms, which are launching various renewable energy initiatives to bridge the shortfall with several distributed power innovations that are smaller scale, lower cost, and quicker to market.
For many, WATT was not a name that rang a bell four years ago but the company is gradually rising from obscurity to arguably a major player in Nigeria’s energy sector.
As typical of emerging giants in the sector, the company is primarily focused in the development, construction and operation of sustainable power projects in emerging economies, with an initial focus in Sub-saharan Africa.
In three short years, WATT has gone from 1 site to over 60 sites; while also aiming to have at least 200 sites under management before the end of 2021, according to Oluwole Eweje, Managing Director of WATT.
“Our investment partners have invested over $4.5 million in the development, execution and rollout of projects in Nigeria,” Eweje told Businessday.
He noted that WATT is a company that is not just interested in being a disruptor within the industry but “also about having a significant impact in the marketplace.”
With operations in Nigeria since 2018, the company’s first venture into the Nigerian market was a minigrid project executed in Mowe Ogun state. After two years of blackout, the project provided power to a community clinic, two schools, and several houses in and around the community.
Thereafter, the company was approached by a leading Telecommunication Tower Infrastructure provider to provide power to their telecommunication sites under an ESCO model.
“Our unique selling proposition is that WATT will provide its client with reliability of power (100 percent uptime) with an affordable flat fee tariff. This ESCO model was the first of the kind for our client,” Eweje said. “It provided us the opportunity to showcase the abilities within our robust organization.”
After the project with the telecommunication tower provider, WATT also partnered with a financial services company in Nigeria, a development which led to converting off-site Automated Teller Machine (ATM) sites from 100 percent diesel powered to 100 percent solar powered.
“The impact of these installations ultimately is that it allows companies to focus on their business,” Eweje said. “Something as basic and essential as power shouldn’t need to be part of a company’s strategy; aside from paying for it.”
Across marketplaces in Africa’s biggest economy, noisy, fuel-guzzling and pollution-producing generators are like an unwelcome, yet necessary business partner.
Nigerian businesses (and citizens) adjust for these power deficiencies by spending on diesel fuel and generators.
The IMF’S 2019 Nigeria report quoted economic losses of $29 billion in Nigeria due to unreliable electricity supply. On global Doing Business rankings, Nigeria ranked 169 out of 190 countries in the category of “Getting Electricity.
“The secondary impact of course is in the community itself; job creation, economic stimulus, information and education,” Eweje said.
Nigeria, seen as the largest potential market for mini-grid in West Africa, has received at least $374 million in the past ten years from international donors for mini-grid development.
Africa’s largest economy has small-grid capacity of 2.8 megawatts as of 2019, with 52 of the 59 projects solar-powered, according to Bloombergnef. Only 55percent of the nation’s population is connected to the national electricity grid and those experience frequent power cuts of up to 15 hours per day.
The Nigeria National Resource Charter ( NNRC) is urging the lawmakers to refocuse the country’s energy policies to accommodate the present realities with emerging developments in global energy as it considers the Petroleum Industry Bill (PIB).
The advocacy group in a release commended recent efforts made by both chambers of the National Assembly towards ensuring the unhindered passage into law of the protracted Petroleum Industry Bill (PIB) this year.
The NNRC is a not for profit organization advocating for, and supporting the extractive industry, government, civil society and citizens to efficiently harness Nigeria’s natural resources wealth for public good.
Driven by this, the NNRC has since 2012, produced Nigeria’s most comprehensive and up to date report on developments in the petroleum sector tagged ‘The Benchmarking Exercise Report (BER)’ on the state of governance, strengths, and weaknesses in Nigeria’s management of its petroleum resources.
The NNRC believes that with the commitments and promises by the leadership of both chambers; Senate and the House of Representatives ( HOR) exemplified by the public hearings on the Bill which took place from Monday, 25th January to Thursday, 28th January, 2021, there is need to ride the momentum and get all stakeholders on board to achieve what undoubtedly would be the most profound piece of legislation for the transformation of the Nigerian economy.
Having consistently highlighted the weaknesses in two significant aspects of resource management in Nigeria, namely; the contentious issues surrounding the management of host communities impacted by extraction, and the management of the Nigerian National Oil Corporation (NNPC), the NNRC urges the Federal Government to finally resolve the pervasive issues facing the petroleum sector.
The Federal Government is encouraged to do this to ensure that Nigeria will be able to meet global best practices and also to effectively ‘ identify, explore, account for, mitigate or compensate for the negative effects of extraction at all stages of the project cycle” a well as run a National Oil Company (NOC) that is accountable, with commercial efficiency as a key objective,
While addressing the consistent gaps revealed by the NNRC’S BER in the past, the NNRC urges the Federal Government to also prepare for the future, by earnestly refocusing the country’s energy policies to accommodate the present realities with emerging developments in global energy consumption which encourages the adoption of renewables to support existing fossil fuels.
In doing so, the government will not only ensure that Nigeria’s natural resources are managed in a way that ‘secures the greatest benefit for citizens through an inclusive and comprehensive national strategy, legal framework and competent institutions’, it will also position the Nigerian economy to benefit in the future.
Thus, the NNRC said key submissions made in its memoranda to the National Assembly, advocating that the PIB provides clarity on the capitalization of NNPC to enable it adapt a commercially focused framework that allows it operate in a competitive space and explore the possibility of an initial public offering (IPO) with more private sector and possible citizen participation as practiced in other countries, allowing for greater transparency and accountability of the Nigerian National Oil Company (NOC).
The group also called on lawmakers to allow for meaningful participation of host communities in decision making in managing trust; at the Board of Trustees and Management Committee, to engender conducive operating environment. ensure mechanisms for dispute resolution are accommodated to address conflicts that may arise in the determination of host community entitlements.
It further urged the lawmakers to liberalize the midstream and incentivize gas investments by not legislating the base gas price but instead allowing it be determined by the practical framework that considers cost of production and pipeline transportation.