Here’s how Nigerian businesses can reduce petrol and diesel consumption by 50%

Power is one of the major problems small, medium and large corporations face in Nigeria. It is a major constraint on ease of doing business in Nigeria with about $12 billion spent annually by businesses and individuals on generators. In view of this, Nairametrics has learnt of a new method that can help cut the cost of powering generators by 50%. 

Since the power sector was privatised by the Goodluck Jonathan administration in 2013, electricity supply hasn’t improved much, and every business continues to provide electricity themselves mostly with petrol and diesel generators. 

As businesses and households continue to seek a cost-effective alternative source of power to unburden themselves of diesel and petrol cost, Nairametrics spoke to Mantrac Group’s Renewable Energy Manager, Kenny Mathai, for a solution. 

During the interview, Mathai acknowledged the existence of power problem in Nigeria as he had lived most of his life in the country. According to Mathai, for businesses and households to cut their cost of powering generator by 50%, they need to adopt the hybrid system. 

“I’ve faced NEPA (electricity) problem all my life, so I would love for NEPA to be there 24/7. Unfortunately, because the power is bad, diesel generators are the most used solution. 

“But the main thing about solar is that it helps you to reduce your diesel consumption. So that’s a good thing, that’s a solution… The best solution for Nigeria is a hybrid system where you integrate your solar panel with your generator set and reduce your diesel consumption by 50%. 

“Some companies are spending millions on millions and hundreds of millions; government is also spending a lot,“ Mathai told Nairametrics on the sideline of the Power Exhibition held in Victoria Island, Lagos. Mantrac also exhibited its Solar panel system. 

Not far from the truth 

Mathai’s claim about government’s spending on generator is not far-fetched. Nairametrics had reported that President Muhammadu Buhari’s office was expected to spend N46 million on fuelling generators this year (2019). Also, in the country’s 2019 budget, there are 1,358 generator-related expenses. 

Solar faces adoption challenge 

It’s not every Nigerian household that makes use of solar as majority depend on generators. Solar is mostly used by large companies because of its cost which is more expensive than generator at the purchase stage. 

In order to improve the acceptance of solar, there’s a need for the involvement of both the private sector and government. According to Mathai, the private sector needs to pump more investment into the solar business. He also advised the government to subsidise the cost. 

“People have to be willing to invest in it. It’s the cost. If there can be any kind of subsidy or any grant that the government can use to help, I think people will (buy),” he suggested while stating that Solar panel was the future of electricity. 

Why this matters 

According to Dalberg, a global policy and advisory firm in June 2019, households owned about 22 million small petrol generators, as a research by NOI Polls and referenced by Bloomberg disclosed that an average power supply of only 9.2 hours a day was provided to households as of first half of 2019.  

The yearly cost of powering these generators, which is estimated at $12 billion, is said to be twice the country’s annual infrastructure budget. The lack of access to electricity and unreliable power supply causes an annual economic loss of about $29 billion, according to the International Monetary Fund. 

This means that the more dependent Nigerian households and businesses are on generators, the more holes it drills into the pocket of businesses, households and the economy

Source: Niarametrics Nigeria

Share this