Rocky Mountain Institute, Abadan Electricity Distribution Company (IBEDC) and Nayo Tropical Technology have partnered to bring Nigeria’s first rural commercial undergrid mini-grid online.
With support from the Nigerian Rural Electrification Agency, the three organisations have joined forces to accelerate the commercial deployment of undergrid mini-grid technology in the Nigerian sector.
The Mokoloki project demonstrates a financially viable business model that could provide electricity access to millions living in underserved rural communities throughout the country.
Ahmad Salihijo, CEO of the Nigerian Rural Electrification Agency, says part of their work is to create an enabling environment for private sector-led projects to thrive. Thus he is delighted to observe this kind of strategic collaboration geared towards accelerating energy access for the unserved and underserved communities in Nigeria.
“What makes this project unique, beyond being Nigeria’s first commercial undergrid mini-grid in a rural community, is the social and economic transformation that the project ultimately brings to the Mokoloki community. I commend RMI, IBEDC, Nayo Tech and all other stakeholders involved in carrying out this feat,” said Salihijo.
Throughout sub-Saharan Africa, hundreds of millions of people live “under the grid”. Such communities are within distribution company territory but receive unreliable, inconsistent or low-quality power that does not meet their needs, or no power at all. These communities are undergrid, yet also underserved. An opportunity exists to better serve these communities through mini-grids which use existing distribution and incorporates distributed energy sources. RMI defines these systems as undergrid mini-grids.
IBEDC was the first Nigerian distribution company to initiated a tripartite contraction negotiation with a rural community as required for interconnected mini-grids by regulation.
A rural community in Ogun State, Mokoloki, was struggling with intermittent electricity access and poor voltage quality prior to this project. However, its bustling market and proximity to main trade routes promised major commercial activity, making it an ideal site for the undergrid mini-grid.
“By the time this project [stabilises], Mokoloki will be like a town. They will have more regular power supply than cities,” said Engr. John Ayodele, IBEDC chief operating officer.
“We are excited to be in the forefront of undergrid minigrid development in Africa as a scalable and sustainable business opportunity with good social impact on our host communities,” said Anayo Okenwa Nas, chief executive officer of Nayo Tech.
Implementing the undergrid mini-grid
This undergrid mini-grid pilot embodies recommendations from recent reports by RMI and partners at EMRC, CLeantech Hub and All On.
Under the Grid outlines the business opportunities for undergrid mini-grid development in sub-Saharan Africa, while Electrifying the Underserved expands on specific business models to guide project implementation. An estimated 40 million rural residents are underserved by the main grid in Nigeria. Of these, close to 35% could be served by over 4,000 commercially viable undergrid mini-grid systems. Nationwide, the revenue opportunity from these mini-grids is approximately N400 billion ($1 billion) per year.
“Mokoloki’s undergrid mini-grid shows how utilities, developers, and communities can collaboratively develop innovative power solutions, and this willingness to test new approaches has unlocked a new option for increasing energy access,” added James Sherwood, principal at RMI.
Using a modular design approach, the solar-hybrid mini-grid is initially providing 100 kW of generation for an estimated peak load of 88 kW, with an expansion plan in place for anticipated load growth. After three months of operation, it is serving 230 households and over 60 commercial and public enterprises, including the local health centre.
RMI hopes the success of this undergrid mini-grid, as a replicable solution, will jump-start similar partnerships that serve customers across Nigeria and sub-Saharan Africa. Both IBEDC and Nayo Tech intend to scale up their undergrid portfolios and are actively exploring project and investment opportunities.