Electricity Business in Nigeria 2

How about businesses?

Solar Power for businesses, how?

We have seen the possibilities of solar power for homes, and without much further ado, let us delve into the business aspect.

Recall, that we mention about a cybercafé operating for 16 hours a day and it is powered by a 15kVA generator. We will compare generator and the solar power alternative. This cybercafé is assumed to operate every day expect Sundays; this implies that it will operate for 313 days in a year.

The beauty of this solution is that it is less expensive in the long run, the solar power can last for more than 16 hours a day and it can as well be operated on Sunday; thus, giving it a greater advantage.

This can further be applied to other industries such as banks, manufacturers, shopping malls, etc. 

Electricity Business in Nigeria

Can Electricity Business Prosper in Nigeria?

Are people willing to pay for the energy they consume?

Having pointed out some of the numerous problems in the Electricity problem industry, it will do a lot of good to proffer solutions before we delve into more problems.

Recall, I mentioned that over 60% of Nigerian households generate electricity using privately owned generators, and this is on continuous increase. To run a 2.5kVA generator continuously for 24 hours every day for one year, one will need to spend about ₦751,371.43 on petrol; furthermore if we include the capital expenditure and maintenance costs we will arrive at about ₦951,371.43. The lifespan of combustion based engines such generators is five years; consequently, running this generator continuously for five years, the owner will spend   about ₦4,156,857.14.

Now let us look at an alternative, solar power. Solar panels average cost is about ₦600 for 1VA (1W assuming power factor is 1). A solar power system comprises of the solar panels, the inverter for converting from DC to AC and the batteries for storage. The solar panels convert the light energy from the sun during the day to electrical energy in DC form. The inverter system has the inverter that converts DC electricity to AC electricity and the battery charger used to charge the batteries. The batteries are used to store energy during the day and the inverter will revert to the stored energy in the batteries for supply of power in the night. It worthy of note to mention that solar panel efficiency drop by about  1% or less  per year; thus, after twenty years solar panels can still be 80% efficient.

Below is a cost comparison between a 2.5kVA petrol generator and 2.5kVA solar power system courtesy of Yellowfin Energy Solutions LTD.

Look at the table above, we can deduce that solar has a very great cost advantage over petrol generators; 32% in savings over 5 years, 46% in savings over 10 years and 53% in savings over twenty years.  The only challenge here for solar power is initial starting cost and this is double the annual cost for petrol generator.

Thus, the pertinent issues here are starting capital, and repayment plan from the consumer. Most people I have informed of this idea are sceptical of such huge capital and the entrepreneurs are sceptical about making profits and securing capital investments.

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Electricity in Nigeria 3

Standards in the Electricity Industry?

Are there standards in the electricity industry in Nigeria?

Probably there were standards in the Nigerian electricity industry, or there are standards at some levels. Electricity is only experienced by consumers at distribution section, only the knowledgeable in the field are aware of the other sections of grid electricity. Well, we are glad most people do not know what goes on at the generation section, transmission section, sub-stations, etc; probably there could have been lots of more fatal incidents.

Caution! Electric Shock!

Why am I concerned about standards? At every corner in Nigeria, everyone is a technician or ‘engineer’ depending on the title that make the person feel important. A lot of buildings are not properly wired, the entire wiring are not done with reference to standards, sometimes these substandard connections cause electrocution, fires, and send faulty feedbacks to distribution transformers which end up degrading the transformer and the entire system.

Furthermore, another problem in our electricity is illegal connection. The people that do these connections are not usually trained on the job, they do the work based on what they pick in the streets, the connections are not properly terminated, the wires used are substandard and other gadgets used for connections are ignored and bypassed.

Another problem is the inefficient bill collection system. Most times, when agents of the distribution company go about their disconnection business, they tend to look for monetary kickbacks from consumers; consequently, some consumers end up not being disconnected despite owing the distribution company. This has reduced the authority rightful bestowed on these agents because they engage in illegal activities during their job.

Disorganised Wiring

In addition, some consumers engage touts to reconnect them back to the grid when there are disconnected by the distribution company agents. Other consumers take it further by illegally hooking back their lines on the distribution lines when the distribution company agents have left the premises.

Possibly, the reason why most people tamper with electrical connections is because we utilise overhead distribution system. It is a very open and unsecure system of electricity distribution.

Investments, investments, investments are need to achieve an efficient electricity system in Nigeria but how are the investors going to recoup their investments with all these lack of regulations and standards in the distribution sector.

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Electricity in Nigeria 2

Do you run a business?

Is your business dependent on electricity?

All about business

As a business owner, depending on electricity procured from the grid is a deliberate plan to terminate the business. Power supply to businesses without a dedicated transformer via the grid can last for about 2 hours maximum during business hours; consequently, businesses in Nigeria run mainly on petrol or diesel generators. Cybercafés, banks, saloons, copy centres, industries, just name them; every business in Nigeria never rely on power from the grid. However, the cost of powering these businesses is enormous and increasing due to the fluctuations in the cost of petrol or diesel.

Rising cost of oil

The volume of fuel most businesses consume in Nigeria is so huge that we will be wondering how we will be able to solve the problem lack of constant electricity in Nigeria. The government seems to be slow in securing investments into the power sector. Currently, Nigeria generates power at the rate of 4GW and if the country is going to make progress industrially and technologically, Nigeria needs to generate power at the rate of 100GW by 2020.

Let us take a look at a cybercafé that runs it business on a 15kVA generator; period of operation is from 0800hrs to 2000hrs, that is 16 hours. To run a 15kVA generator for 16 hours will at least 55 litres of diesel at the cost of ₦150 per litre of diesel. Assuming this cybercafé operates every day except Sundays, this implies that it will operate for 313 days in a year; consequently, the cost of fuel consumed over a year will be about ₦2,575,542.86. Note we are yet to include the cost of the generator and maintenance costs for the generator.

Where do we go next?

Electricity in Nigeria

Are you a Nigerian?

Do you reside in Nigeria?

Electricity in Nigeria

Being a Nigerian or residing in Nigeria can be very tough. If you have experienced Nigeria then you should be aware that Electricity is a very difficult commodity to come by and you must know that getting ten hours of electricity in Nigeria everyday is nearly impossible. Furthermore, the electricity bills are coming in every month with fixed and usage charges; and with the advent of privatization we will be expecting increment as well.  

Private generators in the same neighbourhood

In addition, over 60% of households Nigerians generate their electricity using privately owned petrol or diesel generators; also, private businesses that depend on electricity to function generate their electricity using generators. It will be more illustrating if we analyse fuel consumption and its costs.

Do you run a fuelled generator in your home? Probably, you run a 2.5kVA generator; but have you bothered to check on how much you spend running your petrol or diesel fuelled generator? A 2.5kVA petrol generator can run for seven hours on six litres of petrol, running this generator for seven hours every day, for one year will consume 2,190 litres for one year and this will amount to ₦212,430; note that this excludes generator costs, maintenance and logistics, and I assumed the cost of petrol is ₦97. Including maintenance and logistics costs, we will be having about ₦245, 000. Furthermore, an average home consumes about 18,250kWh in a year from the grid assuming if it receives power for ten hours daily for a year. Considering an average home within Port Harcourt Electricity Distribution Company PHEDC, it will ₦15.02 per kWh and a fixed charge of ₦700 monthly; consequently, an average home will pay about ₦282,515 for ten hours of electricity daily in a year. Therefore, for an average of 17 hours of electricity daily, an average home will be paying ₦527, 465 in a year; and, to have 24hours electricity an average home is expected to pay ₦772, 415 in a year.

Do you want to enjoy efficient power supply?

Are you willing to pay for your electricity?

Next, we will analyze power demand for businesses….

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