renewable energy sector constraints and solutions
TRANSCRIPT
Lagos, Sept. 7th, 2015
RENEWABLE ENERGY SECTOR CONSTRAINTS AND SOLUTIONS
Access to Markets
Access to Finance
Policy and Regulation
Technical Capacity
RE Sector Constraints
Nigeria's RE sector offers supply but suffers from limited demand.
ACCESS TO MARKETS
Country Electricity Power
Consumptions
USA 13,240 kWh
SOUTH AFRICA 4,606 kWh
EGYPT 1,743 kWh
INDIA 713 kWh
NIGERIA 149 kWh
Consumption Comparison
Energy Supply
Total Installed Capacity- 10,396 MWAvrg. Monthly Output- 4,500 MW
Estimated Demand- 40,000 – 120,000 MWUn-Met Demand - 35,500 – 115,500 MW
WHY is demand for RE low?
Poor level of Awareness 6% H and 9% of SME’s
reported being familiar with RE benefits
85% H and 61% SME’s reported never seen an RE advert
Poor Quality ( skewed perception) 5% H and 20% of responded
that they trust the quality of RE products sold in Nigeria.
Reasons for low demand
Lack of incentives 85% of households don’t think
there are enough incentives to adopt RE. 100% could not name any.
77% of SME’s did not think there are enough incentives to adopt RE
High upfront cost 70% of Households don’t think
future savings are enough incentive.
91% of SME’s don’t think future savings are enough incentive.
Reasons for low demand
Government Provide Awareness of
reliability and cost savings.
Provide Incentives for developers and consumers.
Developers Product Marketing (beyond
Direct Sales)
Quality Installations.
Service and Maintenance
Consumers Reduce entry barrier (A2F)
Solving low demand
Opening the doors for RE
ACCESS TO FINANCE A2F
Barriers to RE/EE Finance
• Lenders unfamiliar with RE/EE Enterprises• High collateral requirements (above 100%)
• High interest rates,
• Short loan tenors
• Most Banks do not know how to calculate credit risk analysis for RE/EE projects
• RE/EE enterprises have little credit history with banks• Lack of understanding of banking principles,
• Short credit history, limited experience with lenders
• New and inexperienced companies
• RE/EE Sector considered risky
• Consumers - High Cost of Entrywww.winrock.
org
Banks Training in RE lending (Winrock)
Technical Assistance (Winrock)
RE developers Understand and build relationships with
lenders
Certification (GIZ-Winrock)
Government and Int. PartnersConcessionary Lending
Credit Guarantees (Reduce collateral)
Overcoming A2F
OptionsConsumer Finance
(Ecobank)
Lease back
Pay as you Go
SILVER BULLETLow cost consumer finance product to smooth out
payments and reduce the entry barrier.
Overcoming A2F
Creating the Enabling Environment
POLICY AND REGULATION
No standards for RE/EE equipment SON to set robust quality standards to
insure reliable equipment
Lack of incentives for consumers (private and commercial) Reduction in property tax. (land use,
tenement rate)
VAT for RE products
RE loans interest rate rebate
Facilitate selling excess energy back to grid
Corporate tax brake for those that invest in going green. (Telcos, Banks)
POLICY
Lack of incentives for the industry Import tariff waivers for RE
equipment
Excise Duty waivers for RE products
Regulatory VoidMini Grid regulation that
protects operators.
Feed-in tariff that reflects cost of RE technologies
POLICY
Installation, Service and Maintenance – Reliability and Quality
TECHNICAL CAPACITY
Administration Build up management structure
and the capacity to produce bankable business plans.
Service and Maintenance Scale up capacity to service and
maintain systems. Make S&M a business in itself (SLA).
Technical Staff Insure technical staff is trained if
RE technologies.
Certification
Technical Capacity Constraints
GIZ and Winrock have joined forces to develop a simple, low cost national certification system for Renewable Energy practitioners.
CERTIFICATION
TRAINING COURSES
1 Off-Grid RE Designer 7 weeks
2 Solar PV Installer 4 weeks
3 Solar PV Installer Supervisor 6 weeks
4Small Hydropower Civil
Works4 weeks
5 Energy Manager 4 weeks
6 Energy Auditor 8 weeks
7Energy Efficient Building
Design3 weeks
SERC Sokoto
NCERD Nsukka
NCEEC Lagos
R&T
R&T
R&T
R&T
ISSCeRERKatsina
GTDI, UoIIbadan
CREN, FUTA Akure
T
TInt’l Energy Acade
my
NAPTIN Kainji
BAS Consulting Lagos
R&T
In order to overcome the Renewable Energy constraints, Developers, Government, International Partners and other stakeholders need to work together. All stakeholders need to contribute their part and coordination will be the key to success.
Markets function only when all the pieces come together.
Conclusions
Thank YouJavier Betancourt, Chief of Party, REEEP
Winrock InternationalFlat3, Block 51, E Close OAU Quarters
Maitama, Abuja, Nigeriawww.winrock.org
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