The Energy Commission of Nigeria (ECN), Frankfurt School of Finance and Management as well as the United Nations Environment Programme (UNEP), are collaborating to disseminate results and knowledge learnt from the implementation of clean energy.
The ECN and other stakeholders brought this to the fore at a one-day workshop on Thursday in Abuja.
Speaking at the workshop, the acting Director-General, ECN, Joseph Sunday, said Nigeria has the largest economy in Africa, and the 30th largest economy in the world, which would not have been possible without the industrial sector being targeted by this project.
Mr Sunday said: “Among the main industrial sectors in Nigeria, the manufacturing sector is likely to have the greatest potential for clean captive power uptake.
“According to the World Bank Enterprise Surveys 2014 for Nigeria, 48.1% of the enterprises in the manufacturing sector identified electricity as a major constraint.
“Average losses due to electrical outages incurred by these firms were 18.3% of annual sales.
“Only 3 – 4% of the energy consumption of the Nigerian manufacturing industry comes from grid-connected electricity. This implies that over 95% of electricity consumption of these sectors come from fossil-fuel based captive power.”
In his presentation, Tobias Panofen, Deputy Head, Frankfurt School – UNEP Collaboration Center for Climate and Sustainable Energy Finance, listed four major components of the implementation on Clean Captive Installations for industrial clients in sub-Saharan Africa.
The components are baseline studies of awareness raising, economic and financial tools and assessment, realisation of one pilot project per country, knowledge dissemination and outreach accordingly.
“The experience and track record accumulated by the pilot projects will be spread at the national level, bringing clarity and visibility to the industrial sector.
“Reducing risks perceived by industrialists as well as financiers, while the market for captive installations matures and expands despite a lack of long-term financial support,” he said.
Only 3 – 4% of the energy consumption of the Nigerian manufacturing industry comes from grid-connected electricity. This implies that over 95% of electricity consumption of these sectors come from fossil-fuel based captive power.
Surmounting challenges
Similarly, Kumbirai Makanza, Powergen/Superpower Africa, Kenya, listed ways to surmount the challenges observed in the cause of the project implementation.
To do this, he said, the Corporate Power Purchase Agreements (CPPAs) and corporate lease-to-own schemes must enable end users to pay for C&I solar energy service overtime, to alleviate many of the main barriers to adoption.
He added that the business model requires affordable capital to scale, noting that receivable-based financing is one of the solutions the fund uses advanced proprietary data technology to accurately forecast the payment behaviour of existing customers.
Mr Makanza cited the establishment of Ijebu Eye Hospital Pilot project in Ogun State, where a 180 kwp PV, 100KV PCS, 182kw BESS system hybrid energy was installed under a 10-year take-or-pay PPA contract.
“It is also used to identify and aggregate high value customers into secure, predictable and high performance securities.”
The Project Manager, Frankfurt School of Finance and Management, Yamini Jain, said the Nigerian power sector faced many challenges.
She said some of the lessons learnt were: strong drivers for captive solar energy systems in Nigeria, Nigerian captive solar market being competitive for many commercial and industrial customers, among others.
In his goodwill message, the Principal Industrial Officer, Industrial Development Department, Ministry of Industry Trade and Investment, Ike Obin, said the project would promote sustainable industrial growth.
According to him, it will also contribute to the reduction of greenhouse gas emissions in the region.
“We are committed to supporting the Energy Commission of Nigeria in its efforts to promote the adoption of clean captive installations in the region and encourage other stakeholders to join this initiative.
“We believe that this will help us achieve our common goal of building a more sustainable future for all,” he said. (NAN)
