IMPROVING ENERGY ACCESS: Costs and Benefits of Solar PV in Nigeria

By Muhammad Modibbo

Nigeria, a country of over 154 million people is blessed with abundant human and natural resources. It has an estimated 37.2 billion barrels of proven oil reserves and 185 trillion cubic feet (tcf) of proven natural gas reserves as of January 2010, making it the eighth largest natural gas reserve holder in the world, the largest in Africa and the tenth oil reserve holder in the world. Nigeria’s economy is heavily dependent on the oil sector which accounts for over 95% of export earnings and about 65% of government revenues.

However, it is unfortunate that only about 40% of the Nigerian population have access to

electricity, with only about 30% of their demand for power being met. The sector is plagued with recurrent outages of power to the extent that about 90% of industrial customers and a large number of residential and other non-residential electricity customers provide their own power at huge cost to themselves using power generating plants of different sizes and capacities. The total capacity of self-generation units in Nigeria for industrial, residential and commercial are estimated to about 2,500MW, this is more than 70% of the current generation capacity.

Nigeria has an installed electricity generation capacity of 5,900 MW with the net generation capacity of 20.14 billion kilowatt hour in 2008. About 72% of the total net generation comes from conventional thermal sources (mostly gas fired power generation) with the remaining 28% coming from large hydroelectricity. Although Nigeria is endowed with abundant renewable energy resources- the major ones being solar energy resource, wind, biomass small and large hydropower, renewable energies (excluding large scale hydroelectricity) still play an insignificant role in the electricity generation. The current state of exploitation and utilization of solar photovoltaic (PV) energy in Nigeria is very low, limited mostly to pilot and small scale applications such as residential and powering water pumps in rural areas.

Today, more than 1.4 billion people all over the world lack access to electricity. About 42% (585 million) of the people are from sub-Saharan African, with over 76 million in Nigeria and some 69 million in Ethiopia and most of the rest in developing Asia. Furthermore, some 85% of these people live in rural areas. To improve access to electricity in the rural areas of Nigeria, a decentralised off-grid extension is considered in form of solar PV, this is capable of providing basic services such as lighting, radio transmitter and standing fans.

Contemporary Thoughts

Elizabeth Harder, J.M. (2011) analyses the costs and benefits of generating 10MW solar PV power plant in Abu Dhabi, United Arab Emirate. The study uses RETScrean modelling software to predict energy production potentials and reduction in GHG emissions. The study has found a negative net present value of -$51 million but with the benefits of reducing GHG and air emissions by replacing natural gas with solar PV generation, it was calculated to have a positive net present value of $47 million. El-Shimy (2009) investigates, from techno-economic and environmental point of view, the feasible sites in Egypt to build a 10 MW solar PV-grid connected power plant. The long-term meteorological parameters for each of the 29 considered sites in Egypt from NASA renewable energy resource website (Surface meteorology and Solar Energy) are collected and analyzed in order to study the behaviours of solar radiations, sunshine duration, air temperature, and humidity over Egypt, and also to determine the compatibility of the meteorological parameters in Egypt with the Safety Operating Conditions (SOC) of PV-modules. The project viability analysis is performed using RETScreen (version 4.0) software through electric energy production analysis, financial analysis, and GHG emission analysis. The study shows that placement of the proposed 10 MW PV grid connected power plant at WahatKharga site offers the highest profitability, energy production, and GHG emission reduction. The lowest profitability and energy production values are offered at Safaga site.

Rehman, etl. (2007) utilised monthly average daily global solar radiation and sunshine duration data to study the distribution of radiation and sunshine duration over Saudi Arabia. The analysis also included the renewable energy production and economical evaluation of a 5 MW installed capacity photovoltaic based grid connected power plant for electricity generation. The study used RetScreen software for energy production and economical assessment. It was found that the global solar radiation varies between a minimum of 1.63 MWh/m2 yr–1 at Tabuk and a maximum of 2.56 MWh/m2 yr–1 at Bisha while the mean remained as 2.06 MWh/m2 yr–1. The duration of sunshine varied between 7.4 and 9.4 h with an overall mean of 8.89 h. The renewable energy produced each year from 5 MWp installed capacity plant was varied between 8196 and 12,360 MWh while the mean remained as 10,077 MWh/yr–1. The economic indicators like internal rate of return (IRR), the simple payback period (SPP), the years to positive cash flows, the net present value (NPV), the annual life cycle savings, the profitability index and the cost of renewable energy production showed that Bishah was the best site for PV based power plant development and Tabuk the worst. From environmental point of view, it was found that on an average an approximate quantity of 8182 ton of GHGs can be prevented from entering into the local atmosphere each year.

Sontagand (2003) worked on cost effectiveness of decentralised energy supply systems taking solar and wind utilization plants into account. Parm (2010) have examined the realistic generation cost of solar photovoltaic electricity. The levelized cost based on equated payment loan is being used. The static levelised generation cost of solar electricity is compared with the current value of variable generation cost of grid electricity. This improper cost comparison is inhibiting the growth of SPV electricity by creating wrong perception that solar electricity is very expensive.

Adeoti et al. (2001) worked on Solar PV home based electricity systems for rural development in Nigeria. The study has assessed domestic load demand for rural areas and the result shows that rural households in Nigeria will require 2324.5Wh/day or 850.8 kWh/yr to meet their basic power requirements for such loads as lighting and electronic appliances—radios and televisions. The study recommended solar PV projects especially for those rural households without access to grid supply.

Furthermore, this study is aimed at examining the costs and benefits of generating 9.84KWp off-grid solar PV power generation Dawaki Village in Nigeria and see how it will improve access to electricity in the community.

Solar Photovoltaic and Solar Radiation in Nigeria 

Nigeria, which is located in the tropics, lies between 3 and 14° longitude east and 4 and 14° latitude north of the Equator and it is generally a hot country. Temperature varies according to the season in a year and depending on the various locations in the country, North to south, and depending on the time of the year. The annual average of total solar radiation varies from about 12.6 MJ/m2 -day in the coastal latitudes to about 25.2MJ/m2 -day in the far North, with country average of 20 MJ/m2 per day of solar insolation. Nigeria's annual average temperature is 27 °C (80.6 °F).

In general, solar energy is one the largest available sources of energy on earth and particularly in Nigeria. Solar PV systems convert directly and diffuse solar radiation into electricity through a PV process using semi-conductor devices by storing it in batteries to use any time. A PV system is made up of a module, at least one battery, an inverter, a charge controller, and plus the electrical end-use equipment. PV system can be developed anywhere in Nigeria on suitable land and on buildings. PV technology is very modular, which means that the system can be installed close to centres of demand. It represents a very suitable option for off-grid decentralised rural electrification in Nigeria.

Solar PV systems normally have a long useful life, range between 20 to 32 years and have very low operating and maintenance costs since the only component that requires routine check is the battery. PV systems are very easy and quick to be installed and allow a home system to be fully installed in a day, and create less air or water polluting emissions since no combustion processes are involved.

Solar PV and Energy Access In Nigeria

As explained earlier, the current installed capacity of electricity in Nigeria is about 6,000 MW with generating capacity of about 20.14 billion kilowatt-hours in 2008. Access to electricity services is very low across the country. About 60% of the population – Over 80 million people are not served with electricity and only about 30% demand of those connected are being met. Per capita consumption of electricity is low at approximately 100kWh against 4500kWh, 1934 kWh and 1379kWh in South Africa, Brazil and China, respectively. Under a business-as-usual scenario, the proportion of Nigerians without access to electricity services will continue to increase over time due to failure to increase generating capacity for over two decades coupled with increasing population which put more pressure on the available generation. Currently, the Rural Electrification Program which began in 1981 is seriously fraught with chronic shortage of available generating capacity, which means there are no incentives to continue with the program as the infrastructure would be a waste.

The chronic shortage and deterioration of the available generating capacity has continued to negatively affect the industrial, manufacturing and commercial sectors as well as the welfare of households which forced them to seek for alternatives. With self-generation prevalent in all the sectors in the country, the electricity demand in Nigeria currently estimated at about 10,000 MW or more.

Increasing power generation from the dominant conventional sources and grid extensions alone may not help in achieving access to electricity to rural populace in Nigeria so rapidly and cost-effectively. Therefore, decentralised off-grid solar PV is considered as an option to improve access to electricity for rural/remote community. Among the various alternative available energies to improve access to electricity, solar PV ranks high due to its features. The biggest advantages of solar PV include availability of solar energy across the country; it is also free of charge and environmentally friendly; another advantage is the availability of the technology required to harness solar energy. In many cases, this technology is maintenance free, making its application very suitable for remote locations. Remote areas here are not only limited to locations that are far off from the national grid network but areas where maintenance services may be difficult to come by as well. In addition, any site for which the grid extension is not economical compared to the alternative options can be regarded as remote. As such mountainous, river-delta regions and isolated desert locations could all fall into this category.

NUTSHELL:

With the recently concluded conference on climate change in Durban, this week we share with our favourite readers various issues on energy and sustainable development. Muhammad Modibbo shares with us his insight on the costs and benefits of constructing an off-grid solar PV in Kano State of Nigeria. He uses the uses RETScrean software to estimate the energy production, financial feasibility estimation and greenhouse gas (GHG) emission analysis for the hypothetical PV power project. RETScrean was created by Natural Resource Canada’s Canmet Energy Research Centre in 1996 to provide low-cost preliminary assessment of renewable energy projects. Here is the first part of this interesting read. Comments and observations would be appreciated. For more information on this article and to view Muhammad's profile click here -->