NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

RMI have just released a report that points to a new Renewable Embedded Generation (REG) business model to enable energy developers to provide improved electricity services in Nigeria.

The report posits embedded generation could give Nigerian electricity distribution companies (Discos) a way to improve their supply of electricity to customers without relying on the problematic national grid. At the same time they would still maintain control of their franchise area.

Unlocking Renewable Embedded Generation in Nigeria will be of particular interest to Discos which struggle to take advantage of embedded generation in Nigeria. This is mostly because of concerns around their ability to pay for electricity purchased.

Nigeria’s national grid suffers frequent and extensive power outages because of outdated infrastructure and insufficient capacity. Electricity users supplement their power supply with self-generation, mainly through diesel generators. These are expensive to run, create air pollution and contribute to the country’s growing CO2 emissions profile.

Suleiman Babamanu, Nigeria Director of RMI’s Africa Energy , says reducing customer reliance on expensive self-generation means the REG business model would decrease the overall cost of electricity and limit exposure to volatile fossil fuel prices.

Photo courtesy of Lukas Bato.