Micro-utilities and demand response in Nigeria

The disparity between a fast-growing economy and a failing grid has resulted in the Nigerian populace resorting to self-generation via fossil-fuel generators. Unfortunately, aside from the health risk associated with the use of fossil-fuel generators, operations and maintenance account for about 25% of SME expenses in Nigeria.

Nigeria has the largest economy in sub-Saharan Africa but suffers from significant energy poverty. Currently, the country’s total installed grid capacity is estimated at 13GW, equivalent to 65W per head for its teeming 200 million population. South Africa is the second-largest economy in sub-Saharan Africa, and its installed grid capacity is equivalent to 755W per head.

Of the installed 13GW in Nigeria, a mere 3.9GW are operational due to poor maintenance of power plants, frequent vandalism of distribution/ transmission lines, and insufficient gas production (85% of installed capacity is fuelled by gas). The current transmission capacity in Nigeria (5.3MW) is higher than the operational generation capacity (3.9MW). However, the transmission capacity is constrained by frequent system breakdown and limited operational capacity.

Rensource Energy seeks to bridge the energy gap faced by Nigerian MSMEs by deploying solar-hybrid captive power solutions. To date, the company has powered c.10,000 MSMEs across 8 economic clusters (markets) across Nigeria using solar off-grid solutions. The largest cluster they serve is in Sabon Gabi market in Kano, where over 6,000 MSMEs rely on these services. These markets are completely off the grid or ‘under grid’, and the merchants consider the provision of diesel-based generation as the most effective source of reliable power for their shops, resulting in significant noise and air pollution, and depletion of the ozone layer from the release of poisonous carbon monoxide. Other hazards from the existing solution are the frequent fire incidents from the use of these generators which often destroy millions of naira worth of goods.

 Rensource’s innovative solution involves the deployment of multiple decentralised solar hybrid systems, which provide flexibility in the sizing of the project and are able to easily scale up or down as required. This model eliminates the use of fossil fuel generators while providing merchants with energy-efficient appliances at no cost to the merchants.

Customer satisfaction has improved through enhanced tariff structures via flexible payment plans and structured tariff plans along with the demand of the customers. Customers can upgrade or downgrade across different tariff plans to accommodate their energy needs over time. Smart meters are installed in customers’ outlets to monitor their usage.

In April 2020, the project supplied customers with free power as a way to support customers in the wake of the unprecedented COVID-19 pandemic.

Rensource developed an in-house mobile app installed on mobile phones issued to customer service agents to manage registration and collections. Upon sign up, customers use the mobile app to submit their business information which assists in database management and analytics. Furthermore, the app is used to lodge collections data and auto turn on and off meters as necessary.

A designated number of local agents are assigned to the merchants and visit customers periodically to collect revenue, onboard new customers, and attend to service requests using the techenabled platform, Spaces. The Spaces platform embeds other  value-added services including payment of energy bills, inventory management, sales tracking, stock purchase and logistics management for customer use. The platform is web and mobile-enabled, subject to the user’s preference. The platform has increased customer engagement significantly in the past 10 months and as a result, promotes customer loyalty.

 Local customer service centres were established to cater to the needs of the customers within the locality. The centres are easily accessible to customers and manned by well trained professional customer service agents who provide face-to-face and phone support to the customers. Customers can visit the centres to sign up for power services, make subscription payments, make enquiries, lodge complaints, etc.

Since 2017, the project has distributed energy-efficient appliances to every onboarded customer – including bulbs, fans and extension boxes. During the process of distribution, agents provide customer training on the advantage of using energy-efficient appliances and their impact on the environment. The initiative has resulted in an approximate 12% reduction in customers’ costs of doing business.

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