Report: Nigerian Villages Can Pay for Power from Mini Grids
A new report on the potential for mini grid electricity deployment in rural communities in Nigeria, has disclosed that majority of villages in the country can afford to pay for electricity supplied to them from mini grid power systems. The report titled: ‘Mini grid Investment Report: Scaling the Nigerian Market,” focused on opportunities in mini grid systems - stand-alone power generation and distribution systems that provide electricity to multiple customers - to address rural electrification needs of Nigerian.
Prepared by the Nigerian Economic Summit Group (NESG) and Rocky Mountain Institute (RMI), the market-based report also explained that with a population of over 186 million, Nigeria was well positioned to support a boisterous mini grid market due to its active economy and high demand for electricity.
It stated that 65 per cent of this population which according to it amounted to over 100 million people do not have access to reliable electricity, and that just about 36 per cent of people living in rural communities at the moment have access to centralised power source.
According to the report, these people currently pay $0.71 per kilowatts (kWh) for unstable electricity they get while mini grid supplies could provide electricity to them at a competitive rate of $0.60 to $1.00 per kWh.
“Mini grid systems in Nigeria can easily reach a load of several hundred kW, an appealing scale that is greater than many mini grids currently operating elsewhere in sub-Saharan Africa.
“Greater productive use of electricity - one indicator of Nigeria’s strong economy - also means that Nigerian communities can support commercially viable mini grid systems through high daytime power demand that leads to greater system capacity utilisation,” said the report THISDAY obtained from RMI.
It further stated: “Customers in Nigeria are also clearly able to pay for power. Today, rural consumers pay a minimum of $0.71/kWh - and often much
more - for alternative sources like small-scale diesel/petrol generation. “RMI estimates current mini grid costs at a competitive $0.60-$1.00/ kWh. With prepay models, collection rates are high and the collections process relatively simple. In addition, we believe costs can be reduced by up to 60 per cent by 2020, further unlocking market potential.”
It noted that villages in Nigeria that do not have electricity from the national grid but rely on alternative expensive power sources have been assessed and adjudged viable to sustain commercial investments in mini grid electricity systems.
It equally indicated that while a vast majority of Nigerians in rural communities today lack access to reliable and affordable electricity, they however do not lack the purchasing power to sustain investments in mini grid power systems.