identifying the market,institutional and financial barriers to the implementation

8/6/2019 Identifying the Market,Institutional and Financial Barriers to the Implementation

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IDENTIFYING THE MARKET, INSTITUTIONAL

AND FINANCIAL BARRIERS TO THE

IMPLEMENTATION OF RENEWABLE ENERGY

TECHNOLOGIES IN NIGERIA

By

Mr. Abdulkareem Ozi Aliyu

[email protected]

And

Mr. Jaafaru Yahaya Bawa

[email protected]

Energy Commission of Nigeria, Abuja

A Paper Presented at the 4th Annual NAEE/IAEE International

Conference on Green Energy and Energy Security Option for Africa

28th -29th April, 2011

ABSTRACT


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Introduction of renewable energy system is in the implementation programfor Nigeria. The rate of growth of the program can only increase or decreasewithin the context of the government interest. Certainly, lack of government

plans and target in this regard has remained a worrisome phenomenon.

There is almost an impossible proper co-ordination and implementation ofrenewable energy technologies in Nigeria. The growth of renewable energy

before 2005 was largely dependent on individuals, societies and fewcorporate interest and activities.

The resultant effects of all these are the growth in the deployment ofrenewable energy in Nigeria may be slow with the technology costsremaining comparatively high and high percentage of Nigerians not being

aware of the grains of the renewable energy technologies.

The implementation of renewable energy technology in Nigeria faces a lot ofchallenges due to economic, social, technical and other barriers. These

barriers have to be overcome if renewable energy technologies are to beimplemented to make significant impact on the energy mix of Nigeria.Therefore this paper addressed these barriers and suggests how they can beovercome.

1.0 INTRODUCTION


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Several energy resources are available in Nigeria in abundant proportion. The non-renewable energy resources include petroleum, natural gas, coal, tar sands and uranium.The renewable energy resources include solar radiation, biomass, hydro and wind energy.There has been supply-demand gap as a result of inadequate development and inefficient

management of the renewable energy sector.

The renewable energy potential in Nigeria has not been fully exploited, mainly due tolimited policy interests and investment level. In addition technical and financial barriershave contributed to the low levels of uptake of renewable energy technologies in Nigeria.There are, however, prospects for the widescale development and dissemination ofrenewable energy technologies in the region.

More specifically, the close relationship between the proximity of energy resources to the

potential users coupled with the high cost of conventional energy sources have led to a

considerable interest in the development and application of renewable energy resources.

Although research and development activities are still being seriously undertaken invarious aspects of renewable energy utilisations, a number of the technologies have since

been shown to be feasible and ready, for adoption into the economy. These technologies

are very suitable for the rural areas of Nigeria.

The important development that has also increased interest in renewables in Nigeria is therecurrent crises faced by power utilities. For example, in the year 2007 alone, Nigeriafaced unprecedented power rationing which adversely affected our economies. The rapiddevelopment of renewable is often mentioned as an important response option foraddressing the power problems faced by Nigerians.

It is now universally accepted that fossil fuels are finite and it is only a matter of timebefore their reserves become exhausted. Estimates of reserves of fossil fuels all reach the

same conclusion. Extended use of these reserves, worldwide, in the current manner will

continue for no more than some decades to come. The need for supplementary or even

alternatives that ideally will be non- depletable energy sources have since been

recognized. These non-depletable sources are replenish able and are also referred to as

renewable energy sources as they are available in cyclic or periodic basis.

These include: Solar energy which has an estimated worldwide average power potentials

of 24W per square metre of the earth's surface (assuming 10% efficiency); hydropower,

major sources of which are still underdeveloped, has an estimated potential of the range

2-3TW with an annual output of 10,000-20,000TWh but is only available in certain areas

of the world; also available in limited areas of the world are wind energy and biomass.

The purpose of my presentation is to highlight the role of renewable energy technologies,

challenges faced due to the social, technical and other barriers in the implementation of


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renewable energy technologies in Nigeria and suggested how these challenges can be

overcome.

2.0 RENEWABLE ENERGY RESOURCE AVAILABILITY IN NIGERIA

For the purpose of this presentation the renewable energy sources that will be consideredare hydro, solar energy, biomass and wind energy.

2.1 HYRO

Essentially, hydropower systems rely on the potential energy difference between the

levels of water in reservoirs, dams or lakes and their discharge tail water levels

downstream. The water turbines which convert the potential energy of water to shaft

rotation are coupled to suitable generators. The hydropower potential of Nigeria is very

high and hydropower currently accounts for about 29% of the total electrical power

supply. The first hydropower supply station in Nigeria is at Kainji on the river Nigerwhere the installed capacity is 836MW with provisions for expansion to 1156 MW. A

second hydropower station on the Niger is at Jebba with an installed capacity of 540

MW. An estimate for rivers Kaduna, Benue and Cross River (at Shiroro, Makurdi and

Ikom, respectively) indicates their total capacity to stand at about 4,650 MW. Estimates

for the rivers on the Mambila Plateau are put at 2,330MW. The overall hydropower

resource potentially exploitable in Nigeria is in excess of 11,000MW.

The foregoing assessment is for large hydro schemes which have predominantly been the

class of schemes in use prior to the oil crisis of 1973. Since that time, however, many

developed and developing countries have opted for small scale hydropower with

appreciable savings made over the otherwise alternative of crude oil. It should be notedthat hydropower plants that supply electrical energy between the range of 15kW to

15MW are mini-hydro while those supplying below 15kW are normally referred to as

micro-hydro plants. Indeed small-scale (both micro and mini) hydropower systems

possess the advantage, over large hydro systems, that problems of topography are not

excessive. In effect, small hydropower systems can be set up in all parts of the country so

that the potential energy in the large network of rivers can be tapped and converted to

electrical energy. In this way the nation's rural electrification projects can be greatly

enhanced.

Table 2.1.1Small Hydro Power Utilisation in Some Selected region

Country Harnessed (Small) (MW)

Nigeria 33.0

Uganda* 0.50

Mauritius 6.70

Kenya 6.28

Burundi 5.17


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Somalia 4.60

Zambia 4.50

Tanzania 4.00

Lesotho 3.54

Malawi 1.52

Botswana 1.00Rwanda 1.00

South Africa 0.40

Swaziland 0.30

Mozambique 0.10 Other stations of total capacity 6.81MW are not operational

Source: ECN report, Karekezi and Turyareeba, 1995; Karekezi and Ranja,

2.2 SOLAR ENERGY

Solar energy is the most promising of the renewable energy sources in view of its

apparent limitless potential. The sun radiates its energy at the rate of about 3.8 x 1023 kW

per second. Most of this energy is transmitted radially as electromagnetic radiation which

comes to about 1.5kW/m at the boundary of the atmosphere. After traversing the

atmosphere, a square metre of the earth's surface can receive as much as 1kW of solar

power, averaging to about 0.5 over all hours of daylight.

Studies relevant to the availability of the solar energy resource in Nigeria have fully

indicated its viability for practical use. Although solar radiation intensity appears rather

dilute when compared with the volumetric concentration of energy in fossil fuels, it has

been confirmed that Nigeria receives 5.08 x 1012 kWh of energy per day from the sunand if solar energy appliances with just 5% efficiency are used to cover only 1% of the

country's surface area then 2.54 x 106 MWh of electrical energy can be obtained from

solar energy. This amount of electrical energy is equivalent to 4.66 million barrels of oil

per day.

Solar energy technologies are divided into two broad groups namely solar-thermal and

solar photovoltaic. In solar thermal applications, solar energy, as electromagnetic waves,

is first converted into heat energy. The heat energy may then be used either directly as

heat, or converted into 'cold', or even into electrical or mechanical energy forms. Typical

such applications are in drying, cooking, heating, distillation, cooling and refrigeration as

well as electricity generation in thermal power plants. In solar photovoltaic applications,

the solar radiation is converted directly into electricity. The most common method of

doing this is through the use of silicon solar cells.

The technique was first observed in 1939. Its development had been closely tied to the

space programme of the western world. The power generating unit is the solar module

which consists of several solar cells electrically linked together on a base plate. On the


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whole the major components of a photovoltaic system include the arrays which consist of

the photovoltaic conversion devices, their interconnections and support, power

conditioning equipment that convert the dc to ac and provides regulated outputs of

voltage and current; controller, which automatically manages the operation

of the total system; as well as the optional storage for stand alone (non-grid) systems. In

recent times, the commercial viability of photovoltaic systems have been recognized andconcerted international efforts in research and development have led to increase in

efficiency and reliability as well as reductions in cost.

Table2.2.1:Applications For Solar in Nigeria

S/NO

SOLAR-PV APPLICATION % BY CAPACITY

1. Residential (Mostly lighting) 6.92. Village electrification & TV 3.93. Office/Commercial lighting & Equipment 3.1

4. Street,Billboard,etc, lighting 1.2ALL LIGHTING 15.1

5. Industrial 0.46. Health centre/clinic 8.77. Telecom & Radio 23.68. Water pumping 52.2

TOTAL 100

2.3 BIOMASS

Biomass energy refers to the energy of biological systems such as wood and wastes.

Biomass energy is an indirect form of solar energy because it arises due to

photosynthesis. The biomass resources of Nigeria can be identified as wood biomass,

forage grasses and shrubs, residues and wastes (forestry, agricultural, municipal and

industrial) as well as aquatic biomass.

Wood, apart from being a major source of energy in the form of fuel wood is also used

for commercial purposes in various forms as plywood, sawn wood, paper products and

electric poles. For energy purposes, Nigeria is using 80 million cubic metres (43.4 x 109

kg) of fuel wood annually for cooking and other domestic purposes. The energy content

of fuel wood that is being used is 6.0 x 109MJ out of which only between 5 - 12% is the

fraction that is gainfully utilized for cooking and other domestic uses. Although the

biomass availability as at 1973 was put at 9.1 x 1012 MJ, it is expected that the overall

biomass resource availability at present is lower than the 1973 figure. This is largely due

to the demand of wood also for construction and furniture industries in addition to its use

as an energy source. As for forage grasses and shrubs, estimates show that 200 million

tonnes of dry biomass can be obtained from them and this comes up to 2.28


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106MJ of energy.

For crop residues and wastes, estimates of the 6.1 million tonnes of dry biomass that are

produced annually leave residues whose energy content approximate to 5.3 x 1011 MJ.

Estimates made in 1985 give the number of cattle, sheep, goats, horses and pigs as well

as poultry birds as 166 million. These produce 227,500 tonnes of animal wastes dailywhich come to 2.2 x 109 MJ taking the calorific value of animal dung to be 9,800

MJ/tonne. Animal residue can be converted to biogas and estimates show that this is of

the order of 5.36 x 109 m3 which has an energy content amounting to 2.93 x 109 kWh.

2.4WIND ENERGY

Wind is a natural phenomenon related to the movement of air masses caused primarily by

the differential solar heating of the earth's surface. A seasonal variation in the energy

received from the sun affects the strength and direction of the wind. The ease with which

aeroturbines transform energy in moving air to rotary mechanical energy suggests the use

of electrical devices to convert wind energy to electricity. Wind energy has also been

utilised, for decades, for water pumping as well as for the milling of grains.

A study on the wind energy potentials for a number of Nigerian cities shows that the

annual wind speed ranges from 2.32 m/s for Port Harcourt to a figure of 3.89 m/s for

Sokoto .The maximum extractable power per unit area, for the same two sites was

estimated as 4.51 and 21.97 watts per square metre of blade area, respectively. And when

the duration of wind speeds greater than 3 m/s is considered than the energy per unit area

works out as 168.63 and 1,556.35 kWh per square metre of blade area, again for Port-

Harcourt and Sokoto.

Although use of wind energy for water supply has been known and used for hundreds of

years, in recent times efforts have been directed largely towards the use of wind power

for the generation of electricity and in the past twenty years or so rapid changes in

technology have occurred and major wind powered generating plants have been installed,

especially in the rural areas of the developed countries.

Table2.4.1: Categorization of Wind Power Systems

InstalledPower

Categorization Wind TurbineCapacity Range

1. 500Kw

5. >100MW Wind Power Plants >2000kW


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Wind farms offshore

Table 2.4.2 Wind Energy Potentials and Number of Wind Pumps for SelectedCountriesCountry Potential (m/s) Number of Wind PumpsBotswana 2-3 200Nigeria 2-4 10Burundi >6 1Djibuti 4 7Eritrea 3-8


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Fuelwoow 32.3 Million tones 1.6645 (over 100 years)Animal Wastes & CropResidue

144 Million tones/year 3.024 (over 100 years)

Small Scale Hydropower 734.2 MW 0.143 (over 100 years)Solar Radiation Wind 1.0 kW per m2 land area

(peak)-

Wind 2.0-4.0 m/s -

3.0 STATUS OF RENEWABLE ENERGY TECHNOLOGIES READY FORADOPTION IN NIGERIA

A large number of renewable energy devices have been developed by Nigerian

researchers in various parts of the country. These devices which are ready for

incorporation into the economy especially for rural areas include:

Solar Cookers

These are box-type arrangements where most local dishes can be cooked within one hour

under average sunshine conditions.

Solar Water Heaters

The heaters which are based on flat-plate collectors with appropriate storage units can

produce water at temperatures of up to 80oC will find applications in hospitals, hotels,

industry and private residences and are capable of significant reduction of electricity

bills.

Solar Dryers

Both portable cabinet dryers, for individual private use, as well as large-scale units, for

community utilisation, have been developed. The dryers which typically attaintemperatures of up to 60-70C are suitable for drying a variety of agricultural produce.

Solar Stills

Solar stills are designed to produce distilled water from brackish water and will be useful

for hospitals, industry and laboratories. When sized appropriately they can provide for the

needs of comprehensive health centres of semi-urban localities.

Water Pumping

Many workers have demonstrated the use of photovoltaic solar modules for pumping

water from wells and boreholes especially in rural areas for providing the water

requirements of entire communities. Photovoltaic powered pumps can also be employed

for irrigation purposes.

Storage of Vaccines and Drugs


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Photovoltaic power components have also been shown to adequately provide the

electricity for refrigerators and deep freezers in which vaccines and drugs can be safely

stored without loosing their potencies.

Street Lights and Traffic Controllers

Photovoltaic modules have been used to provide uninterrupted electricity during the dayand night for traffic controllers in city centres. With the use of storage batteries they have

also been shown to power street lights continuously without the power outages

commonly associated with the mains supply.

Improved Wood-Burning Stoves

Clay-based improved cook stoves, of various designed, have been developed and these

conserve the amount of fuelwood consumed by up to 50%, lead to faster cooking and

with the attachment of chimneys they allow for organised exit of smoke and consequently

reduce smoke inhalation.

Production of Biogas

With biogas digesters, which are typically constructed from sheet metal or empty drums

and fed with slurries of animal dung they can produce biogas and after 2-3 days. This gas

which has a reasonable content of methane is combustible and can be relied upon for the

production of gas for domestic cooking. It can also be used for powering internal

combustion engines for electricity generation in rural areas.

Wind for Electricity Generation

In Nigeria, for quite some time, only laboratory trials have been made in the area of using

wind for electricity generation. Such trails have been made with models of three-bladed

aero turbines and the results obtained indicate the potential for stand-alone utilisation

especially in the Sahelian zone as well as the coastal areas of the country. Recently,

however, an increasing number of wind water pumping sets and wind electricity

conversion systems have been installed.

Electricity from Micro hydro Systems

The generation of electricity from numerous waterfalls and rivers in the form of micro

hydro plants for integration into the national grid as well as for stand-alone utilisations, in

remote locations, is a system that has been shown to be viable.


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SOME RENEWABLE ENERGY TECHNOLOGIES

i) The construction of solar dryers at Sokoto Energy Research Centre with

the capacity of 5-10 kg of drying product for staff, students and investors.

Solar Still Solar Dryer

Title: Solar Dryers Location: SERC,Demonstration

AreaCapacity: 5-10kg ofdrying

product

Cost: 10,000.00Year: 2006Objective: Research,

Development &Demo

Sponsor: SERCBeneficiary: Staff,Students

&Investors


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ii) The development of a 2-tonne solar rice dryer at Adarice Company, Enuguand 2-tonne dryer at NAPRI in Zaria.

Title: Parabolic solar CookerLocation: SERCDemonstration Area

Capacity: Average of 2-3Persons

Cost: N47,000:00Year: 2006Objective: Research,Development &Demonstration

Sponsor: SERCBeneficiary: Students,Staff& Investors


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iii) The construction of a solar chicken brooder developed by NCERD Nsukka

Title: Single and Double boxtype solar cookers

Location: SERC, UDUSCapacity: Average of 3-5persons

Cost: : N5,000:00Year; 2006Objective: Research,Development &Demonstration

Sponsor: SERCBeneficiary: Staff,Students & investors


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vi) The production of family based improved wood burning stoves at SERC.

Title: Improved Woodstoves just constructedbefore firing Location: Danjawa Village,

WamakkoLG, Sokoto State

Title: Single Hole ImprovedWood burning stove

Location: GGSS,Argungu, Kebbi State

Capacity: Average

familyof 15-20 persons

Year: 2006Objective: CookingSponsor: SERCBeneficiary: School

Community


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4.0 OVERVIEW OF THE BENEFIT OF SOME RENEWABLE ENERGY

TECHNOLOGIES IN NIGERIA

- Several benefits are derived from the hydropower technology, among which are:1. Provision of a basic tool for rural development2. Very low operation and maintenance costs3. No fuel costs4. Kick starting and support for cottage industries5. Access to remote and often neglected communities6. Competitive economic and supply advantage over other power systems


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7. Reduction of rural-urban migration8. General up-liftment of the social structure of a community

- The Solar PV and Solar thermal energy is all benefits as far as environmental

pollution is concerned. They have positive social and economics impact on thelives of individual uses, communities and the Nation. The impacts they arecurrently making and will continue to make toward national development andpoverty alleviation cannot be overemphasized. Photovoltaic systems theenvironmental benign. They do not have poisonous gases or pollutants with theatmosphere and pose little or no threats in climate change and environmentaldegradation.

- Biogas technology has the following benefits;

- The production of energy resources that can be stored and usedMore efficiently.

- The production of a stabilized residue (the sludge) that retainsthe fertilizer value of the original material.- The saving of the amount of energy required to produce and

Equivalent amount of nitrogen- Containing fertilizer by synthetic process.- Potential for partial sterilization of waste during fermentation, with

the consequent reduction of the public hazard of faecal pathogens.- Reduction, due to the fermentation process, of the transfer of fungal

And other plane pathogens.

- Wood stoves technology has revealed the following benefits.- Reduction of fuel wood consumption by above 40% over existing

Traditional methods corresponding to the cost of about N 8,000 yearly.- Time saving by about 32%.- Reduction in firewood consumption of 30-38% corresponding to cost saving of

N6,000-- N7,500 yearly for the single and double hole stove respectively.- Guided exist of smoke by the chimney and proper damper setting to serve as a

mechanism for the content of fire intensity.

- The benefits of biomass briquetting include;- Reduced biomass bulk through densification of the materials, with

resulting in easier and cheaper transportation.- Increase of the energy content per unit volume of materials by

reducing the moisture content.- Produce homogeneity obtained (same density particle size and

Moisture content) from highly heterogeneous group of new materials.- Uniform quality of energy per unit feed stock generally assured.- Highly cohesive fuel products from particular materials that were otherwise

difficulty to process.


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- Increase resistance to breakdown of particulars in shipping handling and storage.

- Wind energy is one of the lowest priced renewable energy technologies available today,costing between 4-6cents per kilowatt hour depending upon the wind resources. Theconstruction time of wind energy technology is less than other energy technologies, it

uses cost-free fuel, the operation and maintenance cost is very low, and capacity additioncan be in modular form making it adaptable in increasing demand. It enhancesdiversification of energy carries for the production of heat fuel and electricity and alsohelps in saving fossil fuels for other applications and the future generation.

Wind energy is fueled by the wind thereby making it a clean fuel source, non- polluting,and making no demands upon the environment beyond the competitively mostly use ofwind fuel.- A primary benefit of hydrogen energy in Nigeria is its potential for being the energyof last resorts in the future. The resource is abundant and inexhaustible. When developed,it wills constable in the nations energy security in a post- fossil economy. It is also clean

and will assist in addressing local and global environmental challenges such as globalwarming.- Where the resources exist, geothermal energy is a secure energy source. It is available24 hours a day all the year round. Geothermal plants have high availability factors.Geothermal energy is also environmentally benign and releases minimal emissions.While the running costs of geothermal plants are low, initial cost of well drilling, pipelineconstruction, resource analysis of drilling information, design of plant and power plantconstruction is high.

5.0 GAPS AND BARRIERS TO SOME RENEWABLE ENERGY

TECHNOLOGIES PENETRATION IN NIGERIA

The major gaps and barriers to market, institutional and financial penetrations ofRenewable energy technologies in Nigeria are as follows.

High Cost of Renewable Energy System Components

Implementation requires significant initial investment with generally low rate of returnwhile there is very limited level of consumer awareness on the benefits and opportunities


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of renewable energy development. The economic and social system of energy services isbased on centralized development around conventional sources of energy specificallyelectricity generation, thus making a level playing fieldimpossible.Financial,legal,regulatory and organizational barriers need to be overcome inorder to implement the renewable energy projects. There is an absence of a framework

for power purchase agreement between owners of renewable energy technologies andother users. There has also been a lack of assessment of renewable energy technologiesmarket potential and structure necessary to harness renewable energy technologicalpotential.

The market price of renewable energy system components, particularly, the modules ofPV system are currently high. Factory price in 2003 for single and polycrystallinemodules remained at an average of $2.70- 3.25/watt and may even be lower in 2005. InNigeria, a 55W module costs about N60, 000 ($444) or $8/wp which is about three timesthe factory price. One factor that contributes to the high cost in the high import dutycharged on PV system components. While the duty on electricity appliances and

components is generally around 5%, PV modules attract 15% duty while batteries attract40% duty. In view of the low purchasing power of greater percentage of population, evensmall PV systems (e.g. SHS) are not affordable, particularly to the rural people.

Inadequate Government Advocacy and Promotion.

Until recently, there was no government policy on energy in general and renewableenergy in particular. The National Energy Policy promulgated in 2003, is yet to beimplemented.

Inadequate Commercial Activity and Financing Option.

Commercial activity in Renewable energy technologies is still very low. Most of theactivity is concentrated in few cities in the country. Financing mechanisms for theproduction or purchase of Renewable energy systems do not exist.

Inadequate Local Technical Expertise

Capacity building through manpower training and development in Renewable energy

technologies has not been given priority attention. Where quacks design and/or installsystems, failure of such systems discourages market penetration.

Lack of Regulatory Standards

Because no regulatory standards have been put in place, non-accredited vendor, agents,distributors, consultants, designers and installers of Renewable energy systems havepenetrated the Renewable energy technology market.


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Low Public Awareness

Despite the interventions of the Solar Energy Society of Nigeria, the Energy Commissionof Nigeria and Research Centers under it, through workshop, seminars, conferences and

demonstration projects on renewable energy technologies, particularly photovoltaic, thereis still a low level of awareness of the application potentials of Renewable energytechnologies.

Psychological Inertia

Relatively new technologies like photovoltaic experience initial low market penetrationbecause potential end users usually posses social inertia that inhibits them fromacquiring new technologies they know have performed reasonably well over time, insteadof taking the risk of acquiring a new technology which, in their view, may not have beentested or be cost-effective and reliable.

Political Stability and Issues

Until 1999, the country has suffered political instability and this has discouraged bothforeign and local investment in the economy. Even recent and ongoing religious /political skirmishes and community agitations, particularly in the oil-producing NigerDelta Region undermines investment by foreign and local entrepreneurs.Other gap and barriers include lack of local manufacture of Renewable energytechnology component, low level of government patronage, low sensitivity toenvironmental protection, port delays, no tax rebates and the inability of PV system tocarry air- conditioners at affordable price.


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Estimated Percentage of Improved Woodstoves

Dissemination in Sub-Sahara African

69%

10%

10%

3%2%1%2%1% 2%

Nigeria

Kenya

Burkina Faso

Niger

Tanzania

Ethiopia

Sudan

Uganda

Zimbabwe

Source: Sustainable energy development in Sub-Sahara Africa, 2009

958

Uganda

538 5,724

Zambia

5,000

84,468

Kenya, 150,000

0

20000

40000

60000

80000

100000

120000

140000

160000

Nigeria Botswana Zimbabwe

Estimated PV Disseminated in Sub-Sahara African Countries

Source: ECN, 2000, Nieuwenhout, 1991, Diphaha and Burton, 1993, Karekezi, 2002


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203 152 286 400

1,689

11,000

0

2000

4000

6000

8000

10000

12000

Nigeria Uganda Botswana Zambia Zimbabwe Kenya

Estimated PV Dissemination in Sub-Sahara African in kWp

Source: ECN, 2000, Nieuwenhout, 1991, Diphaha and Burton, 1993, Karekezi, 2002

Percentage Distribution of Small and Medium

Scale Biogas Units in Selected Sub-Sahara

African Country

0%

40%

17%

22%

16% 3%

2%0% Nigeria

Tanzania

Kenya

Botswana

Burundi

Zimbabwe

Lesotho

Burkina Faso

Source: Karekezi and Ranja, 1997; Karekezi, 2002, ECN, 2000


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10

50

4.8

40 242.4

500

10

0

50

100

150

200

250

300350

400

450

500

Nigeria

Botswana

Malawi

Mauritius

Namibia

Seychelles

SouthAfrica

Zimbabwe

Estimated Domestic Solar Water Heater Installed

Capacity,2000

Source: ECN, DBSA, 1999, Mogotsi, 2000: Mandhlazi, 2000; Mapako, 2000; AFREPREN, 2002


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6.0 RECOMMENDATION AND CONCLUSION

Going by the level of comatose that Nigerias energy sector is currently operating in,there exists, therefore, the urgent need to remedy the situation especially as it has to dowith investments in the renewable energy sector. This paper has proved so far that, up till

the recent past, the FG has been the sole-investor in the renewable energy technologies.Funding, marketing and institutional requirements for the entire renewable energy sectoris substantial. New investments are needed for exploration and exploitation activities.The required type of marketing and financing is long-term and involves both foreign anddomestical financing resources.

Considering the risk element involved in renewable energy projects, marketing andinstitutional investments in the sector should be capable of yielding high rates of returnand fast pay back periods in order to attract investors. Owing to other competing needs,government alone cannot continue to provide the major finance and marketing for the

renewable energy technologies. Hence private sector participation is necessary andimperative. To attract marketing, financing and institutional investment in the renewableenergy technology, certain necessary conditions would have to be met. These include:

Improvement in the financial performance of renewable energy technology supplycompanies in the country; and

Providing an environment conducive for investment that also protects our nationalinterests.

By upgrading investment in renewable energy technology, it implies the adoption ofthose practices that encourages or utilizes a result oriented investment approach. These

include:

Getting renewable energy technology investment in the right framework

Deciding on the goals of restructuring and the ideal renewable energy technologystructure

Preparing the players to participate in competitive market

Privatizing existing and new renewable energy technological assets

Ensuring that a competitive market, financing and institution are implementedproperly

Guarantee mechanisms to be put in place; and

Pursuing international financing within the ambit of the law.

The conclusion of this paper is driven to promote the option of renewable energytechnology with particular regards to adopting the measure of Private Sector Participationespecially in Solar Energy Technologies in small and medium enterprises.


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7.0 IMPLEMENTATION CHALLENGES

This paper closes by outlining additional considerations that need to be borne in mind byenergy stakeholders and development partners as they develop and evaluate the energycomponent of Nigerias renewable energy technology sector investment. It could be

considered as the seven-point agenda of a strategic renewable energy technologyinvestment plan and are:

Integrate renewable energy technology planning and implementation into aNational Strategy

Be flexible in renewable energy technology marketing, financing and planning

Introduce effective renewable energy technological Regulatory Framework

Reduce costs through Financing Mechanisms and subsidies

Enhance Human Capacity of renewable energy technology through education,training and research

Address international and regional issues

Implement the 2003 National Energy Policy


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8.0 REFERENCES

Energy Commission of Nigeria (2007) National Energy Databank: Compendiumof Renewable Energy Systems Deployed in Nigeria

Implementation of Renewable Energy Technologies: Opportunities and Barriers,UNEP Collaborating Centre on Energy and Environment, Riso,Denmark

Sambo, Prof A. S. 2005.Strategic Planning of Electric Power GenerationSystem Expansion in Nigeria

Barnes, D. 1995. Consequences of energy policies for the urbanpoor.FPD Energy note No 7.

All other references are to be found in Solar and Renewable Energy Company (NIG)

LTD:Meeting R & D Commercialization Challenges; edited by Alexander O. E.Animalu, E. N. C. Osakwe and U. B. Akuru -2009

identifying the market,institutional and financial barriers to the implementation

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