Lengthy power cuts are pretty much a daily experience in Nigeria. The country’s epileptic power supply has been identified by businesses as the second biggest obstacle to doing business in the country, after a lack of access to finance.
This unreliable power supply is a major hindrance to Nigeria’s economic growth. It also costs the country an enormous amount of money. Quoting Nigerian government data, the International Monetary Fund (IMF) says that a lack of access to reliable electricity costs Nigeria an estimated $29 billion a year.
The situation comes with environmental and health risks, too. Many individuals, households and organizations have resorted to fossil-fueled generators. Nigerians spend an estimated $14 billion a year on small-scale generators.
The situation comes with environmental and health risks, too. Many individuals, households and organizations have resorted to fossil-fueled generators. Nigerians spend an estimated $14 billion a year on small-scale generators.
These savings are based on the current cost of running Nigeria’s electricity grid supported by petrol or diesel generators used by businesses and households.
The other advantage of going solar would be its impact on the cost of generating and distributing electricity. Solar costs are coming down.
The other advantage of going solar would be its impact on the cost of generating and distributing electricity. Solar costs are coming down.
It’s also because power consumers are not willing to pay for an unreliable electricity supply.
Its potential in application
Solar-based energy, especially when done on a large scale, can contribute to reducing the cost of generating and distributing electricity in Nigeria.
Renewable technologies could also help to develop an electricity market where those producing surplus energy can sell it to those who have a shortfall. Currently, such a market is limited by the conventional grid systems. These are designed based on centralised big power plants and a one-way flow of energy from the power plants to the customers.
Also, the design of conventional electricity grids is such that they are only stable to the extent that demand and supply is well balanced. They are therefore not well suited to the intermittent supply of electricity that renewables generate. The solution to these limits of conventional grids could be micro-grid clusters that can source energy from a variety of independent power producers.
The potential for building solar units in small chunks and adding more capacity as time goes on makes solar-based power generation ideal for plugging the gaps in Nigeria’s energy requirements. It is the most technically feasible and cost-effective solution to the challenge of extending electricity to 80 million people who are currently without access to energy. Solar, in combination with other technologies, can reduce the cost of doing business in Nigeria.
