Energy plays the most vital role in the economic growth, progress, and development, as well as poverty eradication and security of any nation. Uninterrupted energy supply is a vital issue for all countries today. Future economic growth crucially depends on the long-term availability of energy from sources that are affordable, accessible, and environmentally friendly. Without neglect to other forms of renewable energy, renewable energy here basically refers to solar systems and wind turbines. In my views, with the exception of large scale grid systems, Nigerian is not ripe for meaningful renewable energy up-take for the following reasons;
1. Unstable and unreliable grid system; successful renewable energy development in most economy emanates from the citizens buy-in. It is an embedded system onto the grid with the aid of good policy mechanisms such as Net Metering and Renewable Energy Feed-in Tariff (ReFiT). Unfortunately, investments made by the Nigerian Government in renewable energy project usually come with high risk of failure such as the Durumi solar village in Abuja. Moving forward, a stable grid plays the key role for any successful renewable energy development. The grid almost replaces the need for having a battery storage system thereby reducing the initial cost of ownership.
2. High investment cost; the initial investment capital required for renewable energy system is astronomical beyond what an average Nigerian can afford. Alternative attempt to stimulate loan financing will most likely fail because of long term recovery period, compounded with the rapid evolving technologies. Small scale projects having a recovery period of more than five years are often considered not viable as the technology will soon become obsolete and outdated. To counter this, a successful renewable energy development is usually supported by strong fiscal and economic incentives such as rebates, tax holiday, subsidies, etc. The underlying principle is to accelerate the depreciation of such investment. In many successful countries such as Germany, USA and India, the government help citizens to accelerate depreciation of renewable energy asset in less than five years through active policies and legislations.
3. Limited optimization of investment; with the absence of a grid-tied home solar system, renewable generation is limited by capacity of the battery bank. That is, during the day when home owners are at work and while the sun is at peak, the system becomes redundant from the moment battery storage system is fully charge. The situation exposes such investment to a longer period of recovery than necessary. Alternatively, the grid system would have absorbed all possible energy generated from the renewable generator during the day to augment commercial energy demand which is also at peak. Towards the night, the home owner receives his supply back from the grid at a time when demands are low through a Net Metering system.
4. High technical skill gap; the lack of support for research and development institute in Nigeria is the height of our basic challenges. Therefore, an attempt to aggressively pursue renewable energy up-take in Nigeria will only increase capital flight because none of the components are manufactured in Nigeria. Most of our government policies do not even encourage local content and local skill transfer, hence the influx of already finished products. Most indigenous renewable energy companies in Nigeria also lack adequate technical skill to properly execute and maintain projects. Currently, Nigerian renewable energy market is highly dependent on the foreign economies, thereby exporting our local jobs.
Moving forward, I think Nigeria has for so long neglected the importance of energy conservation and efficiency. In a country that is deficient in energy and infrastructure, it is an enigma that Nigeria’s market for energy efficiency is yet to take off.
The crux of the problem, however, is that politicians, policy-makers and financiers are yet to realize that energy efficiency is inexpensive and easily scalable when compared to the development of large-scale power plants. The Nigerian focus is very much on increasing energy generation rather than avoiding the use of energy in the first place. Nigeria needs to value each kilowatt hour (kWh) of energy saved on par with each unit of energy generated. And as such, the first policy choice in the path towards energy security and energy for all must be encouraging industry and consumers to use energy more efficiently. The economic wide-scale adoption of energy efficiency will create thousands of jobs for the Nigerian youths and stimulate rapid economic growth in Nigeria.
It is not just enough to generate energy; we must also use it efficiently. The adoption of the state-of-the-art optimization technology and management system will be an essential part for business solutions.
Ensuring that Nigeria’s energy supplies are stable, efficient, accessible, and affordable will take time. But break through is in the horizon. Our task is to keep our sights there while helping business succeeds through energy solutions.
Chima Muoneke
