The roadmap for universal energy access in Nigeria

Abuja, Nigeria - Nigeria Electricity Hub’s June Power Dialogue, “Breaking Barriers: Can we still meet SDG 7 targets?” virtually brought together power experts from Nigeria’s public and private sectors to discuss the impact of COVID-19 on universal electrification (SDG 7) targets in Africa.

Expert power sector veterans from both public and private spheres shared their insights on the achievability of energy access targets and the road map to economic recovery after the COVID-19 pandemic. The panel was moderated by Adaku Ufere, Deputy Chief of Party for USAID’s West Africa Energy Program. Honourable Minister of State for Power, Goddy Jedy Agba, represented Nigeria’s Federal Government. Damilola Ogunbiyi shared her perspective as CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy. EM-ONE’s founder and CEO, Mir Islam, spoke about his experience of navigating the pandemic as a private-sector solar microgrid developer in West Africa.

Here are the 6 key takeaways from this dialogue:

1. Innovation in solar technology and modernizing the grid go hand in hand in driving exponential scale-up of electrification in Africa

Progress towards universal electrification requires a combination of increased generation capacity, higher efficiency, and digitalization. Today, we are seeing the widespread adoption of decentralized sustainable energy solutions across Africa to bridge the energy access gap and provide greater reliability to those un- and under-served by the national grid. As Mir emphasizes, to leverage the “exponential technology improvements, cost reductions and lessons learned from projects deployed,” will require an evolution of the current grid into a smart grid. The decentralized solutions we see today will be able to feed in excess capacity into smaller networks. This will require accelerating these sustainable project deployments and preparing Nigeria’s grid for the future.

2. Nigeria should become a regional innovation hub to develop local capacity and manufacturing capabilities

The public and private sectors must really work synergistically to develop regional innovation capabilities, create an enabling environment, and leverage the strong talents and educated population. Mir shared that he would love to see Nigeria become an electrification innovation hub that incubates solutions to scale renewables and close the energy gap in Africa. EM-ONE has consistently prioritized capacity building through its microgrid innovation lab in Abuja and many team members have received training — from their global technology partners Schneider, SMA and Tesla — to transfer international expertise to the local context.

Mrs. Ogunbiyi echoed Mir’s sentiment of capacity building, stating that, “to shift the narrative surrounding Africa, we need to invest in our own. For example, EM-ONE has demonstrated a commitment to hiring and training Nigerians. In times such as those we are seeing today, it becomes increasingly important for the local population to play a leading role in building their future energy systems.

3. Robust and resilient supply chains are crucial for a sustained scale-up of renewable energy projects

Through COVID-19’s global supply chain disruption and the lack of adequate domestic production capacity, companies have learned that their supply chains must be developed as robust and resilient. In the context of solar developers, such as EM-ONE, shortening supply chains and achieving economies of scale in the procurement of solar equipment enables goods to be available on-ground — and rapidly deploy projects when and where they are needed most.

Mir noted that scaling up sustainable energy projects requires thousands of developers and players to be building projects of all sizes — small and large. This is only possible when goods are available on-ground. This not only contributes to more renewable energy projects but creates a ripple effect of building local capacity and creating jobs.

4. Clean energy access is key to timely and cost-effective economic recovery

Mrs. Ogunbiyi shared that for the first time, because of COVID-19, African governments are asking how they can recover from the pandemic-induced crisis through sustainable energy investments. Governments are now seeing that recovering by investing in sustainable energy is the quickest and most valuable way to create economic development and empower the most vulnerable to escape the poverty cycle. Mrs. Ogunbiyi shared the GDP multiplier and job creation metrics comparing investments in sustainable energy to equivalent investments in fossil fuels; For every dollar spent on transitioning to sustainable energy, you achieve $0.93 more GDP and 3.5 more jobs than the fossil-fuel equivalent.

SE4ALL and BloombergNEF recently released “State of the Global Mini-grids Market Report 2020,” which highlights that governments across emerging economies, such as the Federal Government of Nigeria, have effectively rolled out favourable regulations to encourage renewable energy and mini grid developers to deploy projects. The role of the public sector is clear: create an enabling environment that will encourage the private sector to participate in the economic recovery effort through sustainable infrastructure and renewable power projects.

5. Data is essential for achieving electrification targets

Data is everything. Mrs. Ogunbiyi repeatedly emphasized the absolute necessity of accurate data that paints a comprehensive picture of the energy problem. Energy data must inform electrification rates, energy use patterns and behaviours, and the performance of past projects. Data is the pre-requisite to implementing solutions; All players across the sustainable energy value chain rely on data to enable their work, from governments providing accurate market intelligence and data, to the private sector applying this data to justify the viability of their solutions. To DFIs (Development Finance Institutions), investors or lenders will not finance these projects without data to support their commercial viability.

6. Achieving SDG 7 requires cooperation among public and private players, big and small

Mir strongly advocated for the engagement of smaller players to play a role. With Nigeria being a 200+ million person country, “scaling-up” deployment of renewables is not solely about having a few companies deploying projects, but thousands of companies with entrepreneurs working on different-sized projects. Mir emphasized that Nigeria is a huge country, with a wide energy gap. As such, there is a market for smaller systems, which are made possible by having equipment available on-ground and shortening the supply chain. Solutions of all sizes are needed, so support cannot be solely funnelled to just a few big companies that are supported by the public sector and donors who work together.

Mrs. Ogunbiyi stated repeatedly that the entire government must stand behind the power sector. Mr. Goddy Jedy Agba agreed, sharing that the whole government's approach to tackling issues can be seen in the collaboration between energy access and affordable housing stakeholders in Nigeria’s Mass Housing Program, a part of the FGN’s economic sustainability plan. This program aims to build 300,000 affordable houses per year and will be designed in harmony with integrating clean energy. Moreover, the mass housing program will use local materials and local labour only. Unless everybody is part of this holistic process, solutions will not be implemented.

Nigeria Electricity Hub has published both the full recording of this engaging Power Dialogue and an official report. To echo Mrs Ogunbiyi’s concluding remarks, while there is a hard road ahead to achieving SDG #7, the road map is doable. Players from the private and public sectors, both global and local, must invest in Africa, invest in Nigeria, invest in indigenous, and invest in women. Making these investments will bring great rewards.