Despite Energy security and the threat of climate change stimulating investment in the development of alternatives to conventional oil, weak institutional infrastructure and framework affect the adoption in developing economies.
Dr. Patrick Olayinka Tolani:, a legal practitioner and Development expert is a main resource person in area of stakeholder’s relationship management in the renewable energy landscape in Nigeria.
In this interview, the MD/CEO, Community Energy Social Enterprises Limited, CESEL speaks on the latest breakthroughs in the Renewable Energy industry, challenges facing the sector among other issues.
Ayobami Adedinni brings the excerpt
What are some of the trends in the Renewable Energy industry?
We have to situate that trend with a global perspective in mind. We’re in an era of innovation and it’s obvious that climate change and the use of fossil fuels and other unsustainable sources of energy are hurting the environment and ultimately destroying the supportive pillars of the world.
There are so many natural occurrences that can be attributed to the man-made effects of climate change. The time for change is now.
Starting from the Kyoto Protocol and many other subsequent International Agreements and Conventions, everyone is under obligation to do what they can to reduce our carbon footprint and the most efficient way we can do that is to see how we can use sources of energy that are cleaner and more sustainable to reduce the debilitating effect of climate change.
We must realize that there is one world and no one is immune from what happens in another part of the globe.
Naturally, that makes renewable energy to be a global focus.
In Nigeria, there’s no doubt that we have to also follow the trend. We need to recognize we have made commitments under the Paris Agreement to reduce our carbon emission by 20 per cent unconditionally and by 45 per cent conditionally as our Nationally Determined Contribution to mitigate the effect of Climate Change. In 2017, Nigeria alongside three other countries was invited to London as the countries that made some progress in defining how the commitments were going to be met.
The event was called Climate Finance Accelerated (CFA) accelerated workshop. I was part of the Nigerian delegation to that event. Sometime last year, an in-country workshop was also organized in Nigeria with the support of the United Kingdom Government.
While these programme have been helpful to create more awareness and foster local buy-in, the truth is that they have not translated into concrete achievement in the country given the state of power supply in the country.
Furthermore, Nigeria has made a commitment to Vision 30:30:30 which means by the year 2030, 30 per cent of our energy mix must come from renewable energy. It looks like a tall order given the state of play in the country.
The current scenario is that Hydro is about 30 per cent while gas is 70 per cent so Renewable energy is about only 1 per cent of our energy mix which shows that there is a lot of work to do.
I agree that we can leverage on what we have best in terms of energy generation.
There’s virtually no part of the country without solar potential.
In Oxford, UK, a place where we struggle to get sunlight, many homes are installing solar panels on their roofs with the possibility of generating energy to sell to the national grip.
I also understand that such programme exist in other developed countries.
We cannot completely jettison the use of gas for our power generation in Nigeria at this stage our development because our gas potential is still huge; but increasing our use of renewable energy sources is key to our national development.
But the interesting thing is that if you need quick result, renewable energy is the way to go.
In terms of policies, it is apparent that Nigeria is never in want of policies for virtually everything; but it is in the area of implementation that we always struggle.
This is, indeed, a travesty because Nigeria has one of the best human resources managing other programmes outside of Nigeria. The big question then is: what is wrong with our own system. Why do things don’t work in Nigeria? Look at our so-called rail system. Not too long ago, everyone was so excited about Abuja-Kaduna train; but, what is the story today?
Right now, the biggest challenge to the solar sector is that to import solar panels, you still need to pay both import duty and VAT.
We pay 5 per cent as import duties and 5 per cent VAT (not even sure if that will not increase to 7 per cent soon) and this is slowing down a lot of progress.
There are some international projects that have been riddled with unnecessary bureaucracy.
As a nation, we face acute power deficit but we don’t have a sense of urgency to solve it. How can you be encouraging the use of renewable energy and at the same time refusing to support with policies that will make the achievement of the objective possible? It does not make any sense at all.
What has CESEL been doing to change the Renewable energy narrative in Nigeria?
CESEL was founded to impact life. Our agenda is that we should use whatever resources we find in any community to meet their energy needs.
For instance, we have done feasibility studies on 8 rivers in Ondo state already and cumulatively; these rivers will give us 50 MW of electricity.
In the pursuit of our objective, we have been in partnership with some reputable international companies. These relationships are not easy to build. The problem is that many of these companies come with a mind-set that Nigeria is a market where you have people who don’t know what they are doing.
And so, they come with the colonial mind to grab everything and give peanuts to their Nigerian partners. That has stalled so many attempts at getting the right partners over the years; but it is obvious that we have secured the rights partners now and that will be made known to the public soon.
Going back to what we have done so far, in 2015, we developed a portfolio of projects because it’s our belief that with the scale of the energy crisis in this country, we also needed aggressive and ambitious program to respond to the challenges.
We started on a big note and selected 59 communities for our mini-grids.
So, in February 14, 2017, we got a grant of about $800,000 from the United States Trade and Development Agency (USTDA) to do feasibility studies for 25 communities. Those communities are in Bayelsa, Ogun, Ondo and Osun States.
We are also ready to take part in the World Bank, African Development Bank, Nigerian Electrification Project (NEP). We will soon be qualified to put our sites into the platform to access what is called the Performance Based Grant (PBG) under the NEP managed by the Rural Electrification Agency (REA).
We are ready to bring a lasting solution to the power sector but we have to make haste slowly. We have to ensure that we meet all the requirements in order to have sustainable projects that will deliver the right return on investment to us and deliver efficiency to our beneficiary communities.
On another front, we are also working with Frontier Markets as their main Importers and Distributors in Nigeria. The Chief Executive Officer of the company, Ajaita Shah, was in Nigeria recently where she met with partners with IFC in attendance to demonstrate the effectiveness of the Solar Torchlight and how it has helped about 500,000 women entrepreneurs in India. We are working closely with that company to make the impact in Nigeria replicating what is happening in India. Once we are able to sort out all the importing and distribution mechanism, we are set to scale up massively in Nigeria. The Solar Rakshak Torchlight is very light and it comes with the IFC Global Lighting Certification. The torchlight will be very useful to the rural communities especially the riverine and nomadic communities.
Another major programme that we are working on is dPower, our Diaspora focused solar power initiative. We have about 15 million Nigerians in Diaspora and officially, they send about $25 billion into Nigeria annually. The World Bank confirmed that figure. There’s a recent report by PriceWaterHouse that the remittance from Diaspora is more than the proceeds from the oil and gas sector. As a Nigerian in Diaspora myself, I think I am better placed to reach out to other diasporas telling them that we can provide a simple solar system for their own homes or the homes of their parents. I believe that the solution to our power sector challenges has to be incremental – that is taking each family out of darkness step by step.
We are expecting that millions of Nigerians will join this program.
If you can find a reasonable means to give us the money, we do the job.
Our target is to create 3,000 jobs and increase the GDP.
FUTA has released one of its offices as the anchor office for DPower.
What we have designed is very basic. Specifically, we have the 1kW, 3kW and 5kW that can power a house conveniently.
We are working with others to make this work whereby Diasporas can pay by installment. As matter of fact, we are working on a partnership with one of the reputable Nigerian banks to implement this idea.
The subscribers can go to our website: www.cesel.com.ng/dpower, indicate the system that they want and chose their payment plan. Once they get to a threshold, we can now go to the desired place to carry out the install. We have indicated to the Nigeria Diaspora Commission that their endorsement of this programme will help a great deal.
To solve this energy problem, we need people of like minds that can work together.
Renewable energy particularly the solar energy subsector offers tremendous opportunities for massive employment.
This is because the oil and gas sector that gives government 90 per cent of its revenue employs less than 1 per cent of the population.
We need a lot of young people getting into employment.
What can you say about the regulatory environment?
In the solar technology, you can have embedded generation.
For mini-grid, there is the Mini grid Regulation for that and it’s regarded as one of the best in Africa.
It provides for how the developers and people can work together on selected areas. It also defines what happens if a particular location under a Disco Franchise happens to be joined to the national grid. The regulation also provides for the licensing regimes: a simple registration can be done if the size is less than 100kW and a permit if it is more than 100kW and less than 1MW. If it is more than 1MW, then a license is required.
For small hydropower projects once the rivers are localized within a state, the regulatory issues should be easy to del with; but once it is a river that flows from one state to another, then the use of river resources must take into cognizance the needs of all the people who have access to the river. Such hydro projects require very complex development process and they could potentially take years to deploy.
In terms of regulation again, we are not doing badly. It is when we get to submission of applications that we can start to see whether they are easy to navigate or not. The important thing that we as developers want to see is a transparent, easy and efficient regime that we can into account the need to balance the urgency of the solution to our power problem and need to meet the requirements of regulations. Again, poser is: how do we implement the existing regulations for a friendly business environment?
Let me give an example of a state with a lot of potential. That is Niger state. It a state that has a lot of tributaries flowing from River Niger and we are looking at how to tap into these resources. There is no reason whatsoever for that state to have any community without electricity. Their landmass is huge as well as their small hydro potential.
Some of the rivers in Ondo state don’t flow out of the state. We only need the approval of the government. We are also working on those as well. The Governor of the State, Arakunrin Oluwarotimi Akeredolu has given us the concessionary right to work on those rivers. We have carried out our prefeasibility study and a good number of those rivers have good hydropower potential. Let’s take for example the Awara River which is very close to Akungba and Ikare. There is no reason why that river cannot power the State University located in Akungba and the entire community including Ikare-Akoko.
Let me demonstrate through this example how unnecessary bottlenecks can stifle our progress. For some years now, some 14 solar projects were signed with the Bulk Purchasing Company owned by the Federal Government. Up until now, project developers and the Federal Government have not been able to resolve whatever has stalled the implementation of the projects. Recently, the international development partners who are financing the projects cried out loud that the financing would soon be cancelled. The question to ask here is: are we serious at all? Do we think we understand the state of decay that the power sector is facing and the effect on the lives and businesses of the citizen of this country?
Where do you see CESEL in the next few years?
It is true that we have carried out lot development activities; but in the years to come, we should move rapidly into the implementation phase of these projects. We have some embedded solar hybrid installations to the Telcoms sector and we are also working on powering some schools under our Education Support Programme. We look forward to making better impact in the coming years.
However, we want to move on from CESEL just being a Nigerian sustainable energy company to a big player in Africa but that would be after our projects here in Nigeria have achieved some tangible results.
We have similar challenges in other countries as well.
We want to put light into homes, schools and industries.
My overall suggestion is that all the stakeholders in the power sector must recognize the magnitude of the challenge we are facing in the sector and approach whatever input we are making with a sense of urgency. Doing things as business as usual will not deliver the desired outcome.