Connecting The Dots On Becoming the First Profitable Mini-Grid in Africa by Doose Iortyom October 12, 2023 Published by Doose Iortyom This week, we have Olu Aruike, Country Director for Husk Power Systems in Nigeria, as our guest. Husk Power Systems achieved a historic milestone in January 2023 by becoming Africa’s first profitable mini-grid company, with Nigeria at the forefront. In this episode, Olu discusses this remarkable achievement and how Husk actively contributes to Nigeria’s energy transition. This conversation also burrows into how mini-grids can be leveraged to catalyze economic productivity in Nigeria. October 12, 2023 0 comments 0 FacebookTwitterPinterestEmail
Connecting The Dots Stories of Impact on the Nigeria Electrification Project by Doose Iortyom August 17, 2023 Published by Doose Iortyom This episode of Connecting the Dots features Abba Aliyu, Head Project Management Unit (Nigeria Electrification Project) REA. He joins us to share insights on the positive outcomes and challenges from various projects implemented under the Nigeria Electrification Project (NEP). This conversation also delves into real-life accounts of communities and institutions that have experienced transformative changes and improvements through NEP initiatives. Ultimately, this episode reflects on the success and potential of the NEP in shaping Nigeria’s energy and economic landscape. August 17, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch Beyond Electrification: Productive Use of Energy by Doose Iortyom August 7, 2023 Published by Doose Iortyom Energy access is a crucial part of transforming the quality of our well-being. Stable electricity drives industrialization, innovation, and infrastructural development, attracting investment and economic growth and development. The essentiality of energy explains why the government and several development agencies continue to fund varying projects toward advancing energy access for all. However, beyond electrification projects, there is a need to ensure the sustainability of these projects. To sustain the viability and bankability of the projects, incorporating energy for productive usage into electrification programs is critical. The National Rural Electric Cooperative Association (NRECA) defines productive electricity use as “Any use of electricity that generates income for the user”. The productive use of energy (PUE) involves the application of energy in agricultural, commercial, and industrial activities for economic growth, local resilience, and self-reliance. For example, accelerating access through energy-efficient electric productive appliances and equipment such as grinding machines, solar cold storage, welding machines, and industrial sewing machines can empower communities. In Nigeria, electricity use among poorer households is mainly limited to low-power appliances, such as lightbulbs, radios and phone chargers. As the off-grid sector continues to grow and evolve beyond essential household lighting, utilities strive to stimulate additional demand. As a result, attention is drawn to using PUE systems to boost consumer energy demand. Electricity demand does not grow automatically when there is electrification. Many communities in the global south are poor and require further support to increase their income and productivity and, in turn, afford electricity. Therefore, ensuring that electrification programs directly influence livelihoods and revenue creation is critical for long-term sustainability. Increasing revenue can be accomplished through the productive use of energy. As the uptake of new lines rises due to electricity use during productive activities, value is created, and energy demand is ultimately enhanced. According to the Africa Development Bank, among the 420 million people in Africa between the ages of 15 and 35, 30% are unemployed. PUE systems use can be employed in income generation at various levels. When energy is employed efficiently in entrepreneurial endeavours, businesses are expanded, and as a result, more jobs are created, thus promoting local economic development. Increased income levels lead to improved financial stability, empowering individuals to afford the energy they consume. In 2022, NERC revealed in their Q4 report that DisCos had failed to meet their ATC &C loss targets. As more people become gainfully employed through the adoption of PUE systems or programs, they are better positioned to pay for electricity, and in turn, the DisCos are better off. Productive energy utilization holds enormous potential. As such, championing more programs like the Nigerian Electrification Program (NEP) with a core objective of increasing the productive use of energy in rural areas is crucial. However, numerous challenges must be resolved. For example, a lack of awareness around productive energy use can derail its adoption. Hence, closing the knowledge gaps through awareness creation on PUE opportunities is a much-needed action. Additionally, limited access to cash and technology can hinder the deployment of energy-driven businesses. Governments and organizations can support energy-related entrepreneurial endeavours by creating financing mechanisms via financial incentives, grants, and subsidies, making them accessible to low-income individuals and communities. As Africa gears toward universal energy access by 2030, enhancing energy affordability through productive energy consumption is a transformational strategy to strengthen communities and promote sustainable economic progress. We can remove obstacles and give people the power to determine their futures by considering energy as a resource that is both a consumable and a catalyst for success. Governments, energy companies, and other stakeholders can work together to create a world where energy is available, affordable, and beneficial to everyone while ensuring environmental stewardship. August 7, 2023 0 comments 0 FacebookTwitterPinterestEmail
Connecting The Dots The Impact of Bilateral Contracts on Underserved Customers by Doose Iortyom August 1, 2023 Published by Doose Iortyom On this episode of Connecting the Dots, our guest is Olajumoke Delano, Head of Regulatory and Government Regulations, Abuja Electricity Distribution Company. She joins us to discuss and enlighten us on the Impact bilateral contracts will have on underserved customers. This episode provides insight into what provisions should be in place for lower band-level customers to promote energy access and realise goal 2030. August 1, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch Implications of the Looming Electricity Tariff Increase by Doose Iortyom June 30, 2023 Published by Doose Iortyom Electricity tariffs are the rate at which electricity is sold to a consumer. These tariffs are determined by considering total production costs from generation plants to wholesale generation, transmission, distribution, metering and billing and finally to the consumer. Nigerian electricity tariffs are typically regulated by the government or The Nigerian Electricity Regulatory Commission (NERC) to ensure fairness, sustainability, and the financial viability of the power sector. Electricity is the bedrock of civilization, providing energy for our homes, businesses, and industries. However, the accessibility and affordability of electricity have always posed significant concerns for both consumers and policymakers. One of the critical factors influencing the electricity tariff set by utility companies is the electricity subsidy which the government pays to upset a part of this tariff costs making it affordable to its citizens. However, recently the government has expressed its inability to continue subsidizing electricity due to severe financial and revenue constraints. As a result, Distribution Companies (DisCos) have proposed a 40% electricity tariff increase from July 1, 2023. Other contributing factors to this proposed increase are the fuel subsidy removal and the unified exchange rate. The electricity tariff increase has become a subject of intense debate and discussion. Therefore, there is a need to outline the possible implications of this proposed tariff increase in varying sectors. Some of the impacts are as follows: Impact on Consumers: An increase in electricity rates directly affects the consumer’s pockets, as higher rates translate into increased monthly bills, especially with already skyrocketed bills from the fuel subsidy removal. According to the National Bureau of Statistics (NBS), 40.1% of Nigerians are classified as poor. As such, many households in Nigeria, especially those in rural areas, are low-income households with limited disposable income, and the burden of higher electricity costs can be particularly challenging. In addition, the increased financial strain on consumers’ income can lead to reduced discretionary expenses, affecting local businesses and the overall economy. Impact on Businesses: All businesses heavily rely on electricity to function optimally. This means that a spike in electricity tariffs directly impacts operational and production costs, reducing profitability and competitiveness. Energy-intensive industries, such as manufacturing, mining, and hospitality services, may experience significant challenges when tariffs spiral. Higher electricity costs may compel businesses to cut back on operations, reduce staff, or pass on the increased expenses to consumers through higher prices, ultimately impacting the purchasing power of the general population. Renewable Energy Adoption: Globally, countries are making efforts towards transitioning to cleaner energy sources to curtail the adverse effects of climate change on the planet and reduce dependence on fossil fuels. The tariff spike may cause people to seek alternative energy sources, thus promoting renewable adoption and providing the much-needed boost needed to help Nigeria realize its 2030 goals and the Energy Transition Plan. Attracting Investments: For the NESI, the increase in electricity tariff seems like a giant leap towards achieving cost-reflective tariffs. For several years the electricity value chain has suffered losses, with DisCos being unable to meet their financial obligations. Achieving cost-reflective tariffs instils confidence in the minds of investors and intending investors, and it demonstrates that investors can recoup profits from their investments. The electricity tariff increase will impact varying sectors and stakeholders negatively and positively. Therefore, these predicted impacts present a difficult task for policymakers to strike a balance between the requirement for a power sector that is financially sustainable with affordable energy. Given that the pains of fuel subsidy removal still linger, will the DisCos hold off on this impending increase or proceed? The coming days will tell. June 30, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch Impacts of the New Amendment on the NESI. by Doose Iortyom April 17, 2023 Published by Doose Iortyom In 2023, achieving stable electricity still seems farfetched for Nigeria. According to the World Bank, Nigeria has the world’s most significant energy access deficit. In a bid to improve energy access in the country, the power sector has seen many frameworks, policies, investments, an influx of projects and recently, a new amendment. This article will explore the recent amendment and its impact on the Nigerian Electricity Supply Industry (NESI). On the 17th of March 2023, President Muhammadu Buhari, GCFR, signed a new bill into law that allows “A House of Assembly may make laws for the State with respect to the generation, transmission and distribution of electricity to areas covered by a national grid system within that State.” This new law empowers states to make laws and create frameworks specific to their capabilities and needs in relation to served and underserved areas, unlike in the past, when they were restricted to off-grid or unserved areas. Given the restriction of the state governments in this regard, this amendment is a step in the right direction. One of the significant impacts of this amendment on the NESI is the uprising of state-sponsored financing structures. States can now form their state electricity markets, including laws, policies, and financing mechanisms, which opens up an opportunity for the private sector to get involved and contribute their investments. This development can enhance energy access and increase competition in the industry, resulting in job creation opportunities as states begin to source experienced and capable individuals to manage state power investments. Decentralizing electricity markets allows for much-needed accountability, and this amendment can bring about improved efficiency and transparency. Also, state governments can now be held responsible for supply lapses, which could engender much-needed improvements in the NESI. Another potential impact of this amendment is a tariff hike. States can now effectively engender market-driven tariffs, which permit periodic reviews that sufficiently accommodate and adjust for inflation and exchange rate fluctuation. This development is necessary to address the bane of businesses in Nigeria. Furthermore, this amendment could decrease pressure on the national grid, as states can enact laws on generating, transmitting, and distributing electricity within their territory. Authorization to establish regional or isolated grids that run through their states is imminent, which would reduce pressure and overreliance on the national grid, resulting in a decline in system collapse. This development promotes grid flexibility and a reduction in grid expansion costs. Despite this amendment’s opportunities, there is a risk of overregulation, intrusive compliance requirements, and increased costs due to numerous toll points within the sector. To hedge against these risks, stakeholders like the Nigeria Electricity Regulatory Commission (NERC), National Assembly, Federal Ministry of Power, and all states must chart a path as to how both the state and federal electricity markets will co-exist. Some states have taken the lead in implementing this amendment, with Lagos State and Akwa Ibom State at the forefront. Lagos State had earlier enacted the Lagos State Electric Power Sector Reform Law 2018 and issued the Lagos State Electricity Policy 2021, recording some successes. Considering the array of positive impacts this amendment will have on the NESI, it is evident that this is a much-needed leap and has what it takes to move the electricity market in Nigeria forward. However, critical actors in the power sector must create clear-cut frameworks and networks to facilitate this process and improve energy access. The NESI must take advantage of this amendment and work towards providing reliable and affordable energy to Nigerians. April 17, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch Exploring RE to Advance Nigeria’s Health Care Sector by Doose Iortyom April 12, 2023 Published by Doose Iortyom The Nigerian healthcare sector is rapidly deteriorating due to numerous challenges, with the unstable power supply being a core contributor. A recent World Health Organisation (WHO) survey ranked Nigeria’s healthcare system as the fourth worst in the world. Hence, exploring renewable energy (RE) solutions to advance Nigeria’s healthcare sector is crucial. Energy access is vital to the healthcare sector and critical in achieving the United Nations Sustainable Goal 3, which hopes to ensure healthy lives and promote well-being for all ages. In emphasizing how vital energy is in saving lives, studies report that more than 289,000 women worldwide die yearly from pregnancy- and childbirth-related complications, many of which could be averted with better lighting and other electricity-dependent medical services. (Sustainable Energy for All 2019). And yet, a recent study analyzed over 121,000 health facilities in 46 low- and middle-income countries and found that almost 60% lacked access to reliable electricity. Electricity guarantees the operation of critically needed medical devices such as vaccine refrigeration, surgical emergency, laboratory and diagnostic equipment, and basic amenities such as lighting, cooling, ventilation, communications and managing hazardous waste. Electricity is also essential for a clean water supply. Furthermore, inadequate and unreliable access to electricity in healthcare facilities also impacts the accessibility and quality of healthcare services. Opening hours can be limited, and people may feel unsafe, challenging recruiting and retaining staff. Clean energy has become a veritable tool for combating energy access deficit, a medium for energy transition and fast-tracking economic growth and development in most jurisdictions worldwide. Nigeria is blessed with adequate RE sources such as constant sunlight, sufficient wind pressure, generation of significant bio-waste, and tidal waves in coastal areas. The country-wide adoption of RE can propel the healthcare sector on a path of development and more reliable service. Additionally, healthcare is a critical sector in Nigeria, and healthcare workers play a significant role in delivering healthcare services to the population. However, with the current power supply situation, healthcare workers face substantial challenges in providing medical services. For example, due to power outages, surgeries must be postponed or cancelled. With RE solutions, healthcare workers can deliver medical services without interruptions, significantly improving job satisfaction. Another benefit of RE is that it is environmentally friendly. Nigeria’s healthcare sector relies on diesel generators, which produce significant greenhouse gases contributing to climate change. By using clean energy sources, such as solar and wind power, the healthcare sector can significantly reduce its carbon footprint and contribute to mitigating the effects of climate change. In the united states, hospitals like Gunderson’s health care system have embraced a variety of renewable energy sources to improve local health outcomes while controlling rising energy costs, becoming the country’s first “energy independent” health care system in 2014. This precedent shows that transitioning to clean energy in our health care is possible, In conclusion, on-grid electricity has proved unreliable and inefficient in catering to the energy needs of the healthcare sector. However, RE can potentially transform Nigeria’s healthcare sector significantly. Providing reliable and affordable power supply to hospitals and health facilities reduces the cost of health care services whilst contributing to economic development and ultimately increasing the life expectancy of the average Nigerian. Therefore, the Nigerian government should prioritize adopting RE solutions in the healthcare sector by investing in the necessary infrastructure to make it a reality. April 12, 2023 0 comments 0 FacebookTwitterPinterestEmail
African Focus The Effects of Corruption on Electricity Sector Progress by David Omata March 17, 2023 Published by David Omata Africa’s electricity sector is crucial to the continent’s economic and social development but has been plagued by corruption. The effects of corruption on electricity sector progress include poor electricity generation, high energy costs, and low access to electricity in many communities. Corruption in Africa’s electricity sector takes various forms, including embezzlement, bribery, nepotism, and favouritism. These corrupt practices have led to the poor management of generation, transmission, and distribution systems. This poor management results in frequent electricity outages, blackouts, and low access to electricity in some areas. For instance, Nigeria is the most populous and economically successful country in Africa, yet it has the challenge of supplying its people with reliable energy. Inefficiency, poor management, and corruption are widespread in Nigeria’s electrical industry. There has been a shortage of investment in the energy infrastructure due to corrupt activities, including bribery, misappropriation of public funds and illicit connections, leading to frequent electricity outages and limited access to electricity. According to a Sahara Reporters story, $16 billion was spent on a botched electricity project. However, three years later, there have been no improvements, and the country only has an electricity access rate of 55.4 per cent. According to a report by the World Bank, South Sudan’s electricity access was just 7.24 per cent in 2020, a 0.53% increase from 2019. A few individuals and companies control the electricity sector, and there is a lack of transparency in the procurement and management of electricity infrastructure projects. South Sudan is the most corrupt nation in the world, according to the 2021 Corruption Perception Index study. The corruption permeating the electricity industry causes electricity generation, transmission, and distribution to deteriorate, resulting in frequent blackouts and high customer energy bills. African governments must demonstrate political will and commitment to tackle the effects of corruption on electricity sector progress. Governments should enact laws and regulations that encourage transparent bidding procedures, public disclosure of contracts and bids, and frequent audits of the energy infrastructure to increase transparency and accountability in the electricity industry. Involving private industry and civil society groups in the management of the electricity sector is also necessary. Civil society organisations may monitor the electricity infrastructure projects and report any instance of corruption. Also, the private sector can provide financial resources and technological know-how to the electricity industry to boost the infrastructure’s effectiveness. Governments should also prioritise renewable energy sources like solar, wind, and hydroelectric when investing since these projects can provide access to clean, dependable, and reasonably priced electricity. Investments in renewable energy will also lessen reliance on fossil fuels and help to slow down the consequences of climate change. In conclusion, corruption in the African electricity sector has slowed development, increased energy bills, and reduced access to electricity in many communities. Governments should prioritise the fight against corruption in the electricity industry and implement laws and policies that encourage accountability and openness. By doing this, the electricity industry in Africa may be developed into a dependable and sustainable energy source, promoting the economic and social advancement of the region. March 17, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch Leveraging Data to Advance the NESI by Doose Iortyom March 7, 2023 Published by Doose Iortyom The Nigerian Energy Supply Industry (NESI) is experiencing rapid transformations and transitions that significantly impact energy generation and distribution. Hence, effectively leveraging data to advance the NESI by addressing evolving energy needs is crucial. Data is information translated into a form efficient for movement or processing. It is essential in promoting sound energy policy and improving electricity distribution systems. Data provides cost analysis, performance metrics and highlights expected improvements in reducing losses and lowering consumer tariffs. The NESI faces challenges requiring innovative solutions, driving a growing need for data. The sector can leverage internal data (e.g., from supply chain and trade), external data (e.g., consumption data, mobility, macroeconomic factors, brand sentiments, weather) and advanced algorithms to forecast consumption at a customer level and transmission at a location level. As a result, companies are better positioned to meet demand, avoid being surprised by disruptions or changes in conditions, and even eliminate unnecessary shipment, and, thus, fuel use and emissions. The following ways stakeholders can leverage data to advance the NESI include: Smart Grid Technologies: Smart grid technologies use advanced sensors and monitoring systems to collect data on energy usage, grid performance, and equipment health. This data can be used to optimize energy distribution and consumption, reduce outages, and improve the overall efficiency of the electricity supply system. Smart grids can also help to integrate renewable energy sources, such as solar and wind power, into the electricity supply mix. Renewable energy sources are increasingly becoming more affordable and accessible in Nigeria, and their integration can help to reduce dependence on fossil fuels and mitigate the impacts of climate change. In this respect, several studies project that the proper use of advanced analytics implies energy savings of between 5 and 7.5 per cent. Predictive Analytics: Predictive analytics utilizes customer data analytics, which involves collecting and analyzing data on behaviour, preferences, and usage patterns to develop targeted marketing campaigns, improve customer engagement, and promote energy efficiency. These campaigns can include personalized energy efficiency recommendations, such as upgrading to energy-efficient appliances or adjusting usage during peak demand. In addition, there’s a wealth of information in the grid. Capturing it, compiling it and analyzing it yields insights that help stakeholders, investors, developers and operators make better decisions, pre-emptively correct problem areas and prioritize the use of resources. However, leveraging data to advance the NESI could face some challenges, one of which is data quality. In Nigeria, data quality is often poor due to inadequate data collection processes and systems. As a result, it is challenging to derive meaningful insights from data, limiting the effectiveness of data-driven initiatives. Another challenge is data privacy and security. As the electricity supply industry increasingly relies on data, it becomes more vulnerable to cyber threats and data breaches. Utility companies must prioritize data privacy and security to ensure that customer data is protected and not compromised. Finally, there is a skills gap in Nigeria regarding data analytics. The electricity supply industry must invest in training and development programs to equip employees with the necessary skills to collect, analyze, and leverage data effectively. There’s no silver bullet to address all the challenges in the energy space. However, leveraging data to advance the NESI can improve the efficiency and reliability of the power supply, reducing costs for consumers and businesses alike. March 7, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch The Impacts of Electricity Theft on the Power Sector by Doose Iortyom January 23, 2023 Published by Doose Iortyom Electricity theft is a problem as old as the power sector. It involves deliberately deceiving the electricity company by tampering with meters and stealing power from the grid. This illicit activity not only leads to significant financial losses for power companies but also undermines the reliability and stability of the electricity grid. Hence, it is vital to delve into and understand the impacts of electricity theft on the power sector and treat this issue with the urgency it requires. Electricity theft is a problem for the electricity supply industry in many countries, with enormous consequences. In Nigeria, while Distribution Companies (DisCos) significantly bear its impact, the overall adverse effect of electricity theft affects the value chain. Electricity theft allows consumers to use electricity without paying for it, thus leaving the DisCos with a huge liability. For example, electricity theft leads to the inability of DisCos to pay for electricity transmitted from the Generation companies (GenCos). This then reduces revenue to GenCos while increasing the cost of generating electricity. An Association of Nigerian Electricity Distributors (ANED) report showed that over ₦30,000,000,000 (thirty billion nairas) of monthly revenue was lost to electricity theft, vandalism and meter bypass cases. This loss of revenue not only affects the financial viability of power companies but also hinders the ability of power companies to invest in infrastructure and equipment needed to improve power supply to electricity customers. The impacts of electricity theft on the power sector also include the fact that the reliability and stability of the power grid are undermined. This occurs because stolen electricity is not metered and, therefore, not accounted for in the power company’s load management system. This gap can overload the power grid and cause power outages, particularly in areas where electricity theft is prevalent. The implications of electricity theft can be harmful and life-threatening when electrical fires and explosions erupt. For instance, when people tamper with electricity meters and leave wires or connections exposed or loose, it can cause overheating and alight, putting anyone within proximity in danger. Efforts to combat electricity theft in Nigeria have been ongoing for many years, with power companies and the Nigerian government implementing various measures to curb these financial losses. We see this in policies like the National Mass Metering Programme (NMMP) with the backing of the Central Bank of Nigeria (CBN). The aim is simple – promoting prepaid meters, which allow customers to pay for electricity in advance and reduce the incentive for electricity theft. In 2013, the NERC formulated the Electricity theft and other related offences regulations to deter electricity theft and the destruction of electricity supply infrastructure. In addition to these measures, there is a need for more effective enforcement of existing regulations and laws related to electricity theft. These laws can be activated through greater collaboration between power companies and law enforcement agencies. Furthermore, increased public awareness and education about the impacts of electricity theft on the power sector and accompanying consequences will deter prospective offenders. Taking a cue from the United Kingdom, the Nigerian government can extend the existing whistle-blowing policy to energy theft. While efforts continue towards investment in the Nigerian Electricity Supply Industry (NESI), it is crucial to understand the system losses and take corrective actions to utilize the available power better. Eradicating electricity theft may seem far-fetched. However, with intensified efforts and very efficient systems in place, these losses can be reduced to the barest minimum. January 23, 2023 0 comments 0 FacebookTwitterPinterestEmail
