Today, one in three Africans does not have access to electricity, often resorting to using kerosene or spending hours in darkness.
According to the World Bank, if nothing is done to change this, there will be more Africans without power by 2030 than there are now.
Is it then possible to make energy more accessible and affordable for millions of people who need it most, and have the power providers be profitable at the same time?
Yes, according to policy experts at the maiden Energy Leader’s Dialogue webinar with the theme: Energy Transition in a Hydrocarbon dependent African economy,” organized by The Energy Intelligence.
Speaking, Patrick Tolani, CEO, Community Energy Social Enterprise Ltd, said unemployment is a major barrier to the success of the industry citing that this has led to a reduction in people’s purchasing power.
In his words, “I think affordability is the greatest challenge that all the industry players are faced with. This is further compounded now by the inflation rate in Nigeria which is 12.82 per cent compared to the UK inflation rate of 1.74 per cent.
The report recently released by the National Bureau of Statistics indicates that 27.1 per cent is the rate of unemployment compared with 3.9 per cent in the UK meaning that about 21.7 million Nigerians are unemployed.
When such huge number is staring us in the face and the rate of inflation is rising, what that means is that whilst the cost of delivery of project is surging, the people’s purchasing power is reducing because they are getting into unemployment and so they are not able to buy your products.
In the face of this, there is import duty on Solar products plus increase in VAT on solar products.
This is a serious dilemma. We need to figure out how to have inclusive development which is not the case in Nigeria today.
We need better inter-agency coordination in planning and implementation of programs.
I think this is what is mostly keeping the industry in limbo and every of the players in the industry knows this must be fixed if we are to make some level of progress, ” he noted.
Arguably, investments in distributed renewable energies for off-grid communities, offer some opportunities to tackle poverty while increasing mitigating or adapting to climate change.
In terms of affordability, we are providing outright payment for those who can afford such. We also have a lease to own and consumer financing.
At Creeds, we are providing stand alone systems to support SMEs, Mini-Grids development support through technical assistance and also Energy Efficient appliances.
These are SMEs who are using diesel generators and spend about N1,000 while with our system, they’re able to own the system after 2 years and also saving about 40 per cent of their energy spend.
In essence, they benefit from longer productive hours and have less concerns about power generation and focus on growing their businesses,”she said.
On his part, Dayo Adeshina, Program Manager, LPG Expansion Plan, Office of the Vice President said in order to encourage the use of sustainable cooking fuels in Nigeria, the government is working to ensure an efficient LPG sector.
In his words, “One of the first things we did was to look at the anomaly in the sector where LPG was the only petroleum product subjected to VAT and this had a huge impact on the price.
So, we had to remove that.
We also had some incentives in place. Pioneer status was extended to players in the LPG value chain.
There was also a presidential waiver on LPG equipment. We set ourselves a target of 5 million tonnes over a 10 year period.
To do that, the bulk of infrastructure required from terminals to LPG filling plants to the manpower will come from the LPG sector.
A key aspect the government realizes is that there is a need for cylinders if you are going to have maximum penetration especially in the rural areas.
An important aspect of the scheme is also the use of trackers in the Cylinders to be injected.
Another thing we are doing is engaging the state governments in 12 pilot states to start with an awareness campaign.
The target of those campaign is to start with three sectors ; the government, the LPG industry and the people,” he added.
According to him, although nuclear power is “a long term vision and not something that comes overnight but once you have it, the lifespan is between 60 and 80 years and new plants have the potential of lasting a 100 years. Nuclear produces very small amounts of waste.
In terms of reliability of supply, there is nothing that compares to nuclear.
We have a capacity of 93 per cent on our new plants which means that over the lifespan of the plant, it produces at full capacity 93 per cent of the time.
So, you have reliable energy to boost the industry. It’s very good that Africa is trying to give every single person access to electricity but we need to go far beyond that and focus on industrialization.
In order to industrialize, we need masses of baseload power,” he added.
It will be recalled that Nigeria in 2017 submitted its Nationally Determined Contribution (NDC) to the UN which includes “an unconditional 20 per cent reduction in emissions by 2030, compared to business-as-usual levels. This could increase to 45 per cent conditional on international support. Includes plans to end gas flaring and install 13 gigawatts of off-grid solar, as well as improving energy efficiency 30 per cent by 2030.”