RENEWABLE ENERGY SECTOR CONSTRAINTS AND SOLUTIONS. Lagos, Sept. 7 th, 2015

Transcription

1 RENEWABLE ENERGY SECTOR CONSTRAINTS AND SOLUTIONS Lagos, Sept. 7 th, 2015

2 RE Sector Constraints Access to Markets Access to Finance Policy and Regulation Technical Capacity

3 ACCESS TO MARKETS Nigeria's RE sector offers supply but suffers from limited demand.

4 Consumption Comparison Country USA SOUTH AFRICA EGYPT INDIA NIGERIA Electricity Power Consumptions 13,240 kwh 4,606 kwh 1,743 kwh 713 kwh 149 kwh

5 Energy Supply Total Installed Capacity- Avrg. Monthly Output- 10,396 MW 4,500 MW Estimated Demand- Un-Met Demand - 40, ,000 MW 35, ,500 MW WHY is demand for RE low?

6 Reasons for low demand 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.

7 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.

8 Solving 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)

9 ACCESS TO FINANCE A2F Opening the doors for RE

10 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 Entry org

11 Overcoming A2F Banks Training in RE lending (Winrock) Technical Assistance (Winrock) RE developers Understand and build relationships with lenders Certification (GIZ-Winrock) Government and Int. Partners Concessionary Lending Credit Guarantees (Reduce collateral)

12 Overcoming A2F SILVER BULLET Low cost consumer finance product to smooth out payments and reduce the entry barrier. Options Consumer Finance (Ecobank) Lease back Pay as you Go

13 POLICY AND REGULATION Creating the Enabling Environment

14 POLICY 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)

15 POLICY Lack of incentives for the industry Import tariff waivers for RE equipment Excise Duty waivers for RE products Regulatory Void Mini Grid regulation that protects operators. Feed-in tariff that reflects cost of RE technologies

16 TECHNICAL CAPACITY Installation, Service and Maintenance Reliability and Quality

17 Technical Capacity Constraints 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

18 CERTIFICATION GIZ and Winrock have joined forces to develop a simple, low cost national certification system for Renewable Energy practitioners.

19 TRAINING COURSES 1 Off-Grid RE Designer 7 weeks 2 Solar PV Installer 4 weeks R & T SERC Sokoto ISSCeRER Katsina 3 Solar PV Installer Supervisor 6 weeks 4 Small Hydropower Civil Works 4 weeks 5 Energy Manager 4 weeks 6 Energy Auditor 8 weeks 7 Energy Efficient Building Design 3 weeks T NAPTIN Kainji R & GTDI, UoI Int l T Ibadan R Energy R & CREN, Acade & NCEEC BAS T FUTA Tmy Lagos Consulting Akure Lagos R & T NCERD Nsukka

20 Conclusions 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.

21 Thank You Javier Betancourt, Chief of Party, REEEP Winrock International Flat3, Block 51, E Close OAU Quarters Maitama, Abuja, Nigeria mobile