June 19, 2024

250 MW DEAL: Why we’re partnering with Nigeria for a sustainable, efficient power delivery —Manoj,  Founder, Husk Power

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•Says medium-term goal is 500 mini-grids installation across Nigeria

Manoj Sinha is CEO and co-founder of Husk Power Systems (HPS). In 2008, he pioneered the clean energy community microgrid, and since then has built HPS into the leading net-zero energy company serving rural communities in Africa and Asia.

The company recently signed a deal of 250 megawatts (MW) sustainable energy with the Federal Government in a bid to deepen stability of electricity.

HPS builds, operates and owns solar microgrids that provide affordable electricity to off-grid and weak-grid businesses, institutions (health clinics, schools) and households, catalysing socio-economic development. Under Manoj’s leadership, the company operates a fleet of nearly 200 microgrids and has about 500 employees. It is the only microgrid company to sign a UN Energy Compact, in which Manoj and the Husk leadership committed to build 5,000 microgrids by 2030. Manoj is a board member of CLEAN, India’s decentralised renewable energy trade association.

He was named one of the 2022 Global Power & Energy Elites, and received a Lifetime Achievement Award from the Africa Solar Industry Association (AFSIA) in 2022. He was also awarded an Impact Excellence Award in 2022 from the Miller Center for Social Entrepreneurship.

In this interview with EnergyDay’s Editorial team, he bares his mind on the company’s foray into Nigeria’s energy market,  the challenge of energy deficiency in the country, ongoing discussions with Discos and other issues.

Excerpts –

What inspired your company’s foray into Nigeria’s energy market?

The reason why we entered Nigeria in 2020 is the mini-grid policy that was first drafted in India in  the Summer of 2016 was implemented by REA of Nigeria almost verbatim with some modification to suit the context of Nigeria by the end of 2016.

Combined that with 200 million people of which 50% do not have access to electricity, which is the size of the problem, really motivated us to open our shop in Nigeria because we knew that mini-grids is the most capital efficient way to solve the energy access problem that exists in the rural parts of the world.

And Nigeria happens to be one with us. As well as a very large market where we could start implementing mini-grids and solving this problem at scale.

So, can you tell us about this 250 megawatt deal that you signed with Nigeria? What is the deal about?

So, the ambition that we always had for Nigeria market was to solve the problem in multiple states for tens of millions of people using a variety of intervention that includes mini-grids, right, which we have been doing for the last four years now, which are typically 50 to 100 kilowatt system or power plant system with solar PV and battery and other things, as well as a network of distribution.

So, that’s one, but also we started looking into interconnected mini-grids, wherein we are partnering with DISCOs, the likes of AADC and others, so that we can solve the last mile problem that typically DISCOs have had issues with by intervening in terms of adding additional power generation capacity.

By intervening in terms of technology that includes artificial intelligence to be able to predict the demand and manage the supply so that people can get access to as close to 24-7 as possible.

And the third thing is CNI rooftop solution that we are providing on a bespoke model to larger clients, right.

So, this might be, let’s say, hotels or even bank branches in very urban areas of Nigeria.

So, these are the three interventions that we have been working on in Nigeria for a number of years now.

And now with the DISCO, that’s renewable energy services that we are going to provide to many states in Nigeria, and our ambition is to deploy 250 megawatts across these three interventions that I talked about.

So, mini-grids, interconnected mini-grids, as well as CNI rooftop solutions for a variety of clients, as well as clusters of commercial hubs that actually Nigeria does have. That’s the deal.

That’s how I think we, together with REA or other agencies which are DISCOs, we can work in a three-party, triple-P fashion, which is public-private partnership concept and reach out to hopefully tens of millions of Nigerians by 2030, and solve the problem for them as they struggle with diesel generators and things like that.

And to place all those diesel generators to 50 megawatt worth of that, in this particular scenario, and impact the lives of tens of millions of people.

Wow! It’s been said that renewables are not fully efficient for a country. It is supposed to  be an inclusion to the energy mix ? So what do you say about that ?

We are  helping to  liberate Nigeria from its current state of power deficiency right now there are two ways to look at power deficiency in Nigeria  You know thousands of villages that do not have access to any grid so there is no power so the most if you look at the

World Bank report the most capital efficient way to power these villages that have not been powered or do not have access to any grid nearby is to

 build mini grids for them so that we can deliver energy efficient solution that are affordable for these customers who live in rural areas because

expanding the central grid  plant is not going to be a capital efficient way to reach out to these 90 million people who live in rural areas of Nigeria and have access to zero electricity from the grid right so that’s number one therefore the renewable energy is the right way to do it it’s more capital efficient way to do it and therefore it is more affordable for people that are being served through this intervention .

Second is interconnected mini grids where the grid is present but the discos have not been able to service the clients they’re not band A customers right they’re not getting 20 hours of power supply on a daily basis.

I have been to three or four areas where people get power for two or three days in a week and that to not more than six to twelve hours uh on on the day that they have electricity how do you really solve this problem by bringing actually if you look at solar Photovoltaic, PV prices. Today solar PV, price is roughly 20 us cents or less per watt and therefore cost of energy that is delivered from solar PV is actually cheaper than fossil fuels definitely much cheaper than diesel

Generators, today cheaper by more than 50 in fact if you’re using diesel so it is actually much more capital efficient and faster or the fastest way to reach out to these people that have been left, you know that their aspirations or desires have been left unfulfilled by the current state of affairs of the discos and this intervention of localised decentralized power plant interacting

with the grid that disco is currently owning in order to deliver a quality energy solution to people is the right way to go.

So we are not saying that we are doing it only as a green project, but we are doing a green project that is also more economically efficient and more capital

efficient way to serve these people who have been left unserved for the last many decades.

That’s a lot of pursuits for Nigeria. So give and take, you’re saying with the inclusion of this, within the next month, what should we be expecting from your company?

This is not going to be on a scale within a month, this is infrastructure business.

Infrastructure business takes time to scale up. In Nigeria currently we are expanding at the rate of about 6 new mini-grids per month.

So over the next 12 months we would have added roughly 100 new mini-grids and electrified 100 new communities.

In addition to that, we are in conversation with several discos where we want to do more than a dozen SDGs, SDGs being interconnected mini-grids and thirdly, like I was mentioning earlier, we are also talking to actually hundreds of clients on the, which are actually MSMEs to help them with rooftop energy solution through solar PV and batteries.

So these are the interventions that we are doing. We have in place our medium term goal for Nigeria is to build 500 mini-grids that serves many states including Nasarawa Plateau and others. And therefore serve these 500 communities plus the 50s of IMGs which are interconnected mini-grids and hopefully hundreds of CNI rooftop solutions.

So that’s what we as a company are planning to deploy carefully in the next three to five years.

Yes, if we can develop the SMEs with electricity, then  we’ll be receiving a boom in the economy. So what are your  targets with regards to that, and  how far have you gone?  

So, we are already present in two states, Nasarawa and Plateau are the two states where we have a presence.

We have 30 mini-grids that we are operating currently. So to your question about, MSMEs they  are definitely the bloodline or the lifeline of any economy, right, whether it is Nigeria or India.

To give you a similarity, since in India we have been doing this for the last

10 plus years, currently we are serving 14,000 MSMEs in India through our energy solution. Our goal for Nigeria over the next three years is to be able to have a very strong energy economy.

So, the goal over the next three years would be to serve at least, if not more, tens or thousands of MSMEs through the interventions that I spoke about. Because that’s the basis of how the economic activities arise. That’s the basis of how the rural prosperity can be brought in.

So you’re absolutely right in saying that if we solve the problem of energy deficit and expensive energy that SMEs have been looking to achieve, it’s going to be a very good example getting through diesel intervention right now we will solve a lot of economic challenges that are happening in these communities and the way we do that is through  three

different means.

One is through when we install a mini grid at a location. We are adding roughly or we are serving at least 40 to 50 SMEs clients for every mini grid that we install.

In addition to that,  we actually promote productive uses of electricity by bringing in agricultural processing units so for example in two or three sites that we are operating right now we have installed cold storage through a partner so that the fishermen of this village can store the fish in that cold storage and it doesn’t become stale.

So, we have installed a mini grid at a location where they can store the fish. For a week now they can store the fish for a week if they wanted to at lower temperature. Similarly, we have intervened with irrigation pumps as we have intervened with rice milling so we are intervening to    help SME’s to actually propagate and promote economic activities through accurate processing and other interventions that can use energy in a more productive manner.  I give you a very long answer but that’s what we are up to now and that’s what we are doing in Nigeria right now.

So, I don’t know what you are planning in terms of making your impact known for the Nigerian public?

That’s a very good question. So we are still a small company when it comes to Nigeria because we are still quite young with four years of experience now

We do now have a team of about hundred seventy five people in Nigeria and it is a team of 100% Nigerians.

In order for us to talk and promote what we are doing not just what we are doing, but this system of decentralized energy resources that can impact

thousands of MSMEs and thousands of communities is the right way to go, and needs to be talked about more and needs to get more attention of

hopefully almost every state that exists in Nigeria and Social media is one platform that we use but I know that that social media is not enough.

You know very well that we need to make our presence felt  in the rural parts of Nigeria. So we haven’t figured it’s a great question We haven’t figured out the right way to to

promote the impact that we are creating and what this whole system of decentralized electrification can create for thousands of communities across

Nigeria.

 I don’t have the right answer for you, but we are doing our best through social media channels by  actually working closely with REA and other agencies to make this thing well known outside of just one or two states that we are currently serving.

Pay as you go, how does it work?

Oh, Pay as you go is a pretty simple concept, right. So if when

Telecom or cell phone revolution happened in emerging economies including India and the whole continent of Africa , the  SIM card you recharge,  SIM card with X amount, right?

Let’s say  you have 2000 credit unit, as you use your phone that 2000 gets deducted and goes down to zero, right? So that’s a prepaid SIM card system and that’s what you can also term as pay as you go, right?

So as you talk on your cell phone your credit  or your money gets decreased as you consume your minutes, same concept is what we apply for energy users in Nigeria as well as India So you can prepay let’s say N5,000 for the month of June and as you consume your energy that N5,000 will start decreasing based on the consumption that you are making so that’s what pay as you go system means.

Essentially as you use the energy in our case you exhaust your credit, based on your energy users pattern.

So if you’re using too much, you might be exhausting your credit in five days versus somebody else who might be very stingy in terms of energy use, he or she  might exhaust the same credit in 30 days.

Yeah, all right Okay. The problem we have is the electricity in the country It has affected our economic development , but I said all aspect of life.

It might have taken a lot of time to come to Nigeria market, so how long did it take. What were the challenges that you had to pass through that you had to undergo and how did you scale through?

Yes, Nigeria, like I said one good thing that happened and kudos to Nigerian

policymakers was that the mini-grid policy was adopted by Nigeria in late 2016 early 2017. And Agency like REA has been very instrumental in helping companies like us come in and absolutely start scaling the challenges that we faced, and  to begin with  you know simply we don’t really have a one-window framework to actually start a new company,  to form a legal entity and start a business. It’s a very long process in Nigeria.

So it took us more than probably six months to just get a license to even start doing something.

I don’t think we have had any problems. We have been very pleased with

variety of government authorities in Nigeria, including REA  and others including state-level agencies like Naseeda in Nasarawa state that has helped us quite a bit in promoting our solution to the areas and people that we are serving.

So overall, our experience has been very positive.

The covid 19 during 2020 and 2021 did delay our process of scale up but other than that, you know, we are very excited about the market. We think it’s a great market.

You asked me in the beginning why Nigeria? So what I learned when I have been visiting in Nigeria over the last several years says people in Nigeria have a very similar entrepreneurial spirit like we have in India which is very pleasant for us because everybody wants to have a better lifestyle, everybody wants to do well in life and those are the things that really help us grow the business quite fast.

So, overall I am actually very pleased with Nigeria in terms of getting a lot of support from a variety of government agencies.

Alright, just give us a point, the short term and long term what do we expect to get from Husk Energy. The short term and the long term?

So, short term would be 2024, so we will be ending this year with 60 mini-grids, that means we will be serving 60 communities across the state of Nasarawa and Plateau and maybe Cross River.

Our medium-term goal is to get to 500 mini-grids across multiple states in Nigeria. And 500 mini-grids will be serving 500 communities.

Multiply that by 400 to 500 customers per site. Those are the number of customers that we will be serving with close to 100% renewable energy intervention.

On top of that, we will be building about between 50 and 100 interconnected mini-grids. And we will be serving at least 200 clients on the CNI rooftop business framework. So that’s our medium-term goal, to be able to deploy 500 mini-grids.

So we will be scaling from currently 30 mini-grids to 500 mini-grids over the next three to four years. And that’s actually a pretty ambitious plan.

We have a staff of about 170 people in Nigeria right now. Our staff will be more than 1,000 people soon. By that time, we will have scaled 500 mini-grids.

And the great thing about this scale-up is we are hiring a lot of people in the rural areas. So every mini-grid that we install, we are hiring four to five local people. We are training them as electricians, as technicians.

So we are creating a lot of jobs in the rural economy as we scale our intervention across the next 500 sites in Nigeria over the next three to four years.

We want to transform the economy.  We want to work with renewable energy.

But most importantly, really move the needle on MSMEs by moving them from more manual process to more automated process with affordable energy that they can use to increase productivity.

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