How cleantech startups are providing energy solutions in Nigeria
Startups such as Buypower and Instant Energy are making it possible for customers with prepaid meters to buy electricity units from anywhere and at any time.
Nigeria has always had power supply problem. Although according to the World Bank’s Sustainable Energy for All (SE4LL) database, Nigeria’s electricity access increased from 27.3 per cent in 1990 to 54.4 per cent as of 2017. This means that up to 91.2 million people in the country still have no public power supply. The rural areas are worse off as only 22.6 per cent of rural dwellers have access to power supply.
About 60 million Nigerians spend up to N1.6 trillion annually on the purchase and maintenance of generators as their alternative source of power supply,
according to the Centre for Management Development (CMD). While residents in urban areas use petrol- and diesel-powered generators, those in the rural areas rely mostly on kerosene lamps and candles. It is important to note that these alternative sources of power are harmful to the environment because of the greenhouse gases (GHGs) they emit into the earth’s atmosphere and cause global warming.
Earlier this year, the National Environmental Standards and Regulators Enforcement Agency (NESREA) launched an emissions control programme, called the National Generator Emissions Control Programme (NGECP). The aim of the programme is to reduce pollution caused by power generators and address other environmental issues.
Before the unbundling of Power Holding Company of Nigeria (PHCN) in 2005 and the introduction of prepaid meters in 2006, Nigerians generally suffered from what they called “expensive darkness.” Electricity providers issued customers outrageous bills that were arbitrarily determined. The power privatization reform was designed to improve the situation. Nevertheless, the privatelyowned electricity distribution companies
(DisCos) have been unable to provide prepaid meters to most households. Neither has power supply improved. According to the National Bureau of Statistics (NBS), only 1.62 million Nigerians had prepaid meters as of June 2018.
Unfortunately, even people who use meters find it hard to buy electricity units on them, especially when they run out of supply at night or on Sundays and public holidays. A survey carried out by Lagos State University lecturers found that 93 per cent of respondents in Badagry were unable to recharge their meters when their units ran out on those occasions.
Therefore, startups such as Buypower and Instant Energy are making it possible for customers with prepaid meters to buy electricity units from anywhere and at any time. With Buypower, for instance, customers can set purchase reminders, calculate how many units they will get for certain amounts, access the history of their metered consumption and also request for their utility bills. Founded in 2016, the Abuja-based startup now works with six DisCos across Lagos, Abuja and Ibadan, and it also plans to expand to other states.
However, the convenience of buying electricity units does not mean Nigerians have longer hours of power supply. Hence, some renewable energy – or clean technology (cleantech) – startups are helping to expand access to power by delivering alternative power sources using renewable resources that reduce negative environmental impacts.
Nigeria has abundant renewable energy sources, including sunlight, wind, biomass and water. With total installed capacity of 12,522 megawatts (MW), much of the country’s energy (10,142 MW) is from thermal-based generation. Only 2,380 MW is from hydro, which is a renewable resource, per the Power Africa Fact Sheet of the United States Agency for International Development (USAID). The Federal Government targets an energy mix of 30 per cent renewable energy by 2030.
In the financial services sector, some tech entrepreneurs are exploiting opportunities to enable the Central Bank of Nigeria (CBN) achieve its target of 80 per cent financial inclusion by 2020, by creating innovative financial solutions. Likewise, energy startups across the country are contributing to the achievement of the government’s renewable energy goal.
The Renewable Energy Association of Nigeria (REAN), which was launched in 2016, has 38 member-companies providing renewable energy solutions across the country. Other startups in the cleantech sector are OneWattSolar, Daystar Power, National Solar Power Authority (NASPA), GoSolar Africa, Solatice, Lumos Global and Rensource Energy.
REAN’s renewable energy target as a proportion of total energy supply in Nigeria is a bit more ambitious. It aims “to promote strategies that will improve the contribution of renewable energy up to 40% of the national energy mix by 2030.”
Over the years, the cost of acquiring solar power systems has hindered many people from adopting it as an alternative source of electricity. This is because solar modules – a major component of solar power systems – are expensive. A 100-watts solar panel could cost as high as N90,000. Therefore, most of the energy startups offer power-asa-service, which is a subscription-based model for power supply. Rather than paying a fortune to outrightly own solar power systems, this model allows customers to enjoy electricity by paying a monthly or daily fee. There are also companies such as NASPA and OneWattSolar that have a payas-you-use option.
The solar solutions provided by most of the startups have back-up batteries, enabling the systems to continue to work after sunset. Rensource Energy has delivered its micro-utility solution – a type of energy service provider that builds a localized and decentralized power grid to provide energy and other value-added services. The company provided this solution to over 1,500 customers in 2018. Quaint Global Energy Solutions Nigeria Limited is developing a 50 MW on-grid solar utility plant in Kaduna. The project, which is tagged, ABIBA Solar Farm Project, is part of the company’s 1,000 MW solar power target across Sub-Saharan Africa (SSA).
Similarly, Lumos Mobile Electricity, also known as Y’ello Box, on-boarded more than 300,000 customers as soon as it launched in 2017. The Y’ello Box service – the brainchild of a collaboration between Lumos Global and MTN – allows anyone on the MTN network to pay as low as N230/day to enjoy solar electricity. After paying the initial set up fee and subscribing for 1,800 days – the first 20 days must be consecutive – the customer gets to own the Y’ello Box infrastructure and subsequently has access to free solar electricity.
While Lumos Mobile Electricity provides a payment option that reduces the cost barrier for households to use solar power, the solution is only compatible with appliances that don’t require more than 100 watts and 12 volts or 60 watts and 220 volts. This means that Y’ello Box cannot power a ceiling fan, blender, refrigerator, water heater or washing machine.
Clearly, it would be difficult to actually make solar power systems affordable for all because those with high capacity are usually expensive. Part of the cost is due to the exorbitant 10 per cent import duty on solar equipment.
Nevertheless, energy startups are enabling more people in Nigeria to have access to electricity. But when compared with the 91.2 million people that lack access to electricity, more work needs to be done – in the form of investments, research and development and reduction of the import duty on solar panels.
The University of Nigeria Nsukka (UNN) is at the frontier of renewable energy R&D. Earlier this year, the university unveiled a Refuse-Derived Fuel (RDF) plant, which generates 100 Kilovolt-ampere (KVA) of electricity from waste. Professor Emenike Ejiogu, who led the research team said: “The power demand of UNN is about 3 MW. So, with twelve 250 KVA of RDF plants, we will meet our electricity supply needs.”
It is a good idea to generate energy from waste materials that are not recyclable. Energy startups can also explore Waste-toEnergy (WtE); and Nigerian states that generate a lot of waste, like Lagos, can include WtE in their waste management strategies.
Most of the energy startups offer power-asa-service, which is a subscriptionbased model for power supply.