Exclusive interview with Dr Afolabi Otitoju, renewable energy expert and consultant for the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE). Otitoju will moderate the masterclass at WAPIC on “Accessing Finance for Renewable Power Projects”
Can we start with your background and the type of projects you are involved in within the utility sphere at the moment?
I have a background in economics and hold a PhD in Renewable Energy Policy and Management obtained from the Robert Gordon University, UK. Currently I consult for the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE) as a National Consultant responsible for providing technical assistance in the completion of the National Renewable Energy and Energy Efficiency Policy for Nigeria (approved by the Federal Executive Council in May 2015), and in the development of the National Renewable Energy Action Plan, National Energy Efficiency Action Plan, and Sustainable Energy for All Action Agenda (Nigeria).
My duties also include providing high level advice on the development and promotion of renewable energy in Nigeria. A key outcome of the project will be to position Nigeria as a regional lead in the deployment of renewable energy in the ECOWAS region and also strengthen the on-going power sector reform of the Federal Government of Nigeria through a diversified energy mix.
I was also the lead Consultant for the German International Development (GIZ) project on the Nigerian renewable energy institutional landscaping and policy mapping. We applied the GIZ institutional mapping matrix to carry out detailed assessment of the sector’s institutional landscape showing the following modalities: relationships (weak, normal, hierarchical), alliance, gaps, overlaps, and synergies.
Also using similar methodology to carry out an assessment of the policy landscape for the sector in general, identifying gaps, overlaps, and comparing same with international best practice.
Before taking up the role, I consulted for the International Renewable Energy Agency- Innovation and Technology Centre, Bonn Germany where I applied the value chain approach to analyse the potentials and opportunities for local renewable power generation equipment manufacturing in Africa.
Prior to this time, I was a Lecturer at the Aberdeen Business School, Robert Gordon University where I taught various management and Economics courses for four years. I am also a qualified Environmental Management Systems Auditor. As well as being an excellent tutor and trainer, I also sit on the board of trustees of two Scottish registered charities.
What would you say is the current state of renewable energy in Nigeria?
Renewable energy over the last two years have received significant attention from policy makers, private sector, civil society, and others owing to its great potential in the country. The recent transition of the electricity sector from a publicly owned entity to a private sector led institution has also helped to catalyse the need for the deployment of renewable energy in various locations of the country.
The approval of the National Renewable Energy and Energy Efficiency Policy (NREEEP) by the Federal Executive Council in May 2015 also marked a great achievement for the sector.
Over the last one year as well, through the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE) and the joint effort of the Inter-ministerial Committee on Renewable Energy and Energy Efficiency, a National Renewable Energy Action Plans and the SE4ALL Action Agenda are also being finalised for the country. NREAP in particular, states clearly Nigerian renewable energy targets up to 2030 and the measures to achieve these targets.
Upon the validation of these documents an Investment Prospectus will be developed to showcase the investment required for the energy sector in Nigeria. All of these efforts clearly points to the fact that Nigerian renewable energy market has emerged and within the next 5 years renewable technologies e.g. solar, small hydro etc will compete on commercial basis with non-renewable.
What are the main challenges in your view in making renewable energy part of the energy mix in the region?
A key challenge is a general lack of policy and regulatory framework to drive the renewable energy sub-sector of the region. For example in Nigeria, before the approval of the NREEEP 2015, there was no single policy adopted for the RE sub-sector. Now that the NREEEP 2015 is approved, a core challenge is implementation. Actions highlighted in the policy document need to be implemented but to date not much has been done in this regard.
Renewable energy projects generally require high capital investment, especially at the initial stage of building power plant. Most times the government alone cannot afford to finance such project on its own; hence the need to engage with the private sector.
However, the current high risks and uncertainties of the African market discourage interested investors. Access to finance from banks and other lending institutions are not easy to come by. It is often difficult to determine a bankable project and the one that is not.
There is equally a big disconnect between the public institutions and the private sector. Activities at the government institution level are not well coordinated thus sending a wrong signal to the private sector.
Electricity infrastructure in most of the countries in the region is largely owned and controlled by the public sector. People perceive the provision and availability of electricity as a national obligation which the government must fulfil thus they don’t believe in paying for electricity supply.
The days are gone when electricity is strictly financed by public funds. As long as people’s perception don’t change, the government will provide what is available within the budget and it often not enough to go round.
What is your vision for the industry? What excites you about renewable energy?
One of the core conclusions in my PhD thesis centres around how to extend lessons learnt from the success story of renewable energy deployment in Europe to emerging markets like Africa. My vision for the industry is to see renewable energy technologies emerge and grow pass R&D phase to a state where they can compete on commercial basis with non-renewables.
What excites me about renewable energy is the advantage of renewables over other conventional energy sources. The integration of renewable energy systems into the national system need not follow the conventional power infrastructure.
Grid expansion involves huge financial costs and investments, upon which many African countries may not be able to embark in the short term. Sometimes the process of expansion takes longer than planned, requiring many years.
Renewable energy technologies are very compatible with a decentralised, stand-alone or small power generating unit, which enables local/rural communities far from urban areas to have access to basic electricity needs. Furthermore renewable energy off-grid systems does not put unnecessary burden on existing grid capacity, neither do they require system balancing nor need to be managed by the national grid system operators.
Hence, there is a unique opportunity for African countries to have a diversified energy mix and yet to limit the risks of exposing the continent to the current high costs of power infrastructure which are not expected to abate in the near future.
You are moderating a masterclass at WAPIC on “Accessing Finance for Renewable Power Projects” – what are you hoping for from this session?
To bring together practitioners from diverse sectors to chat about the way forward for renewable energy financing in Nigeria and the West Africa region. I hope that through the discussion key messages can be passed on to policy makers and top business executives, pointing to the fact that renewable energy deployment is no longer in the future, but now.
What will be your main message at the event?
Renewable energy market in West Africa is come of age and with a right framework (financing options, regulatory instruments etc.), large and small scale projects are doable
What are you most looking forward to at the event?
Looking forward to fruitful deliberations that will showcase renewable energy potentials and point to ways of harnessing these potentials for the development of the West African region.