Building Sustainable Microgrids In Nigeria (& other emerging markets).

Jun 9

The Original Micro/Nanogrid

Ma Bess (not real name) ran a railroad motel in the late 1800s. She had mules to fetch the water for the hotel to salve the thirst of train drivers. The drivers preferred not to travel at night for fear of robbers. At Ma Bess’, they got water to drink, a hot meal, and candles to light their rooms. As her great-grandson Chuck (also not his real name) told me, the candle was a bit of an inconvenience to the train drivers who already had generators lighting the dinner cabins on their trains. One of the drivers fancied Ma Bess and decided to steal and offer her the generator from his train. He wasn’t bothered, the train company would replace it. All he hoped for was that this gallant act would win her heart. Unfortunately, it didn’t. But it did ensure that every other train driver who lodged at her hotel had lightbulbs in their rooms. Ma Bess’ became a popular rest stop for many train drivers.

She was a handy lady — she’d lost her husband to a freak accident — and soon rigged the generator to power her water system, which until this point was powered by a small windmill. Since there was no real grid to connect to she had developed her own self-sustaining nano-grid. She ran that until Sam Insull got involved.

Sam Insull made ‘Ma Bess’ self-sustaining electricity rig-up’ into a commercial business worthy of the industrial world; a centralized electricity grid, with multiple heavy assets to generate and distribute the electricity and one central entity managing the system. It’s the era we’ve had for over a century now. but that era is coming to an end.

That era is coming to an end due to climate change, decaying assets & infrastructure, a more informed and demanding customer base, and new technologies. That era is being replaced by what we can call a decentralized electricity era. An era of micro and nano-grids powered by sustainable forms of energy managed with the involvement of the pro-consumer (also known as the ‘prosumer’). And as African/emerging market countries leapfrogged the landline era of telecoms to adopt mobile telephony at astonishing rates, it is time for those same emerging market countries (Nigeria is a great example) to avoid fixing the centralized power systems in favor or building new sustainable decentralized systems. Nanogrids and Microgrids if you will…

Powering Nigeria’s Future

According to the Nigerian Electricity Regulation Commission (NERC), Nigeria's electricity industry faces several problems

Acute shortage of generation capacity
Acute shortage of natural gas
Transmission constraints and inadequacies
Lack of private sector participation
Inadequate generation mix e.g. solar, wind, coal, etc
Unacceptable technical and non-technical loss levels; and
Unacceptably high payment or credit risk in the distribution sector.

And the solution to some of these has always been to introduce and increase the participation of market forces/players to come to provide consistent and reliable electricity to customers.

I got a few messages from friends this morning. This was due to the new Nigerian president signing into law the real privatization of utilities - The Nigerian Electricity Act of 2023 - and it’s time to truly provide the citizenry with reliable and consistent electricity. Electricity is the engine that literally and figuratively powers a society.

In the ever-evolving realm of sustainable energy, microgrids stand as an opportunity to use innovation to build sustainability and resilience into power systems. Leveraging advanced technology and integrating a community-centric approach, they hold the potential to redefine how citizens generate, utilize and manage energy.

Developing Nuanced Microgrids for Nigerian (and Emerging Market) Consumers.

The development of microgrids is a multifaceted initiative that incorporates various disciplines including power engineering, economics, regulatory policy and, since this is for a market like Nigeria, requires deep understanding of the market nuances. Below I’ll lay out an outline of the technical requirements to build a 20MW Microgrid that can serve ~9k residents.

Unearthing Community Needs and Evaluating Economic Impact

Every journey to a successful microgrid begins with a thorough understanding of the community's needs and the potential economic impact. The process starts with evaluating local resources such as solar and biomass (especially considering the disposal considerations and energy potential of waste landfills in Nigeria). By analyzing these resources, we can determine an optimal sustainable, and efficient energy mix.

Implementing community or micro-solar technology will play a vital role in harnessing abundant solar resources available in Nigeria and there are companies already doing this at small-scale. By gathering energy in small, decentralized solar arrays, we bring power to even the most remote or challenging locations. Or clustering solar arrays into community solar options. Alongside these, the need is to undertake on-the-ground detailed economic impact analysis (not the ones the large consulting firms have done from the comfort of their European offices). This analysis will illuminate the microgrid's potential to invigorate local economies, create jobs, and drive broader economic benefits.

Why Load Profiling and Customer Segmentation Matter

Building an efficient microgrid requires a deep understanding of energy demand. Something we do not truly currently know. This is achieved through comprehensive load profiling and customer segmentation. Current data suggests that load profiles for an average African (the illusive Average African) is 19.8 MWh/person/year. We can use this as a baseline to understand demand, studying fluctuations in energy consumption throughout different periods. Consequently, a 20MW microgrid would serve ~9k consumers.

Once we have detailed energy usage patterns, we can segment customers based on their usage, payment capacity, and service criticality. A customer in Epe can absolutely not be considered the same as one in Umuahia. Failing to do this will disable the preferred outcome of a well-informed tariff structure that meets specific customer needs while ensuring the sustainability of the utility.

The Significance of Site Assessment and Infrastructure Review

Detailed site assessments - which is quite the task in a place as vast and diverse as Nigeria - forms the cornerstone of microgrid development. The site assessments will also include a consideration of the type of infrastructure that will be required. In a place like Nigeria, it’ll consider potential locations for micro-solar installations, waste-to-energy deployments, and the (critically important) micro battery storage units.

Microbattery storage technologies play a vital role in managing the energy supply. These compact, high-efficiency units store excess energy generated during peak production times and distribute it during periods of high demand or low production, ensuring a consistent power supply.

Alongside site assessment, the existing grid infrastructure undergoes a thorough review to assess its capacity to accommodate the microgrid, making sure that potential upgrades are identified and budgeted for early in the project.

Crafting the Blueprint: Microgrid Design

Designing a microgrid requires a harmonious blend of multiple technologies. Having worked at a 1000MW CCGT, a centralized design serving 500k residents of the greater London area, I’d recommend a design that incorporates a mix of renewable generation and smaller versions of conventional methods (a 10MW natural gas system for e.g.) for reliability. We’d include energy storage for load shifting and system resilience, making the grid more adaptable to the dynamic nature of energy demand, especially in a country where the work patterns are pretty well defined in the major cities of Lagos, Abuja, Port Harcourt, etc.

The design embraces a mesh topology for system redundancy and resilience. We’d include Advanced Metering Infrastructure (AMI) for granular energy use data and a cloud-based control system software (Supervisory Control and Data Acquisition/SCADA 2/0 if you will) for remote monitoring and control.

The Role of IoT in Enhancing Microgrid Efficiency.

Since the opportunity exists to build these microgrid systems from scratch there is an opportunity to deploy Internet of Things (IoT) systems as part of the base state. IoT devices enable real-time data collection and processing, critical for demand-side management and predictive maintenance. By embedding IoT technology in our microgrid, we can significantly improve efficiency, reliability, and the overall operational lifespan. Critical here is the enhanced ability to perform maintenance. Previous iterations of power systems in Nigeria have failed as much for shoddy deployments in the first place as they have for our non-existent maintenance culture. We have an opportunity to change this.

Smart meters, a popular example of IoT, provide real-time usage data to both the utility and the consumers, promoting energy-saving behaviors. IoT sensors in energy generation and storage systems enable early fault detection, reducing downtime and maintenance costs. By integrating IoT technology, we are effectively turning the microgrid into an intelligent grid – one that can autonomously adapt to changes in demand and supply, optimize power quality, and facilitate seamless integration of renewable energy sources.

Safety and Efficiency Through Power System Analysis

While I was at the power station, we consistently carried out power system studies, including load flow analysis, short circuit analysis, and stability studies, to guarantee the safety and efficiency of the power grid. These will be required for a microgrid and will be enabled by the IoT referenced above. These studies lead to the design of appropriate protective equipment, ensuring the microgrid's safe operation and resilience against potential system faults.

Laying the Financial Backbone: Economic Analysis, Rate Design, and Financing.

In parallel with the technical aspects, the financial sustainability evaluation of the microgrid is necessary. Privatization assumes that the companies and entities that get into this business are in it to make a profit in their endeavors. A comprehensive financial model detailing capital costs, operational costs, and expected revenues forms the basis of any analysis of this sort. This robust financial plan, coupled with an equitable rate structure, ensures cost recovery and sustainability while maintaining affordability for the customers.

Navigating the Bureaucracy: Policy Dialogue, Regulatory Compliance, and Utility Formation.

Policy and regulatory compliance are integral to the process. By engaging in productive dialogue with policymakers, we aim to foster favorable microgrid policies. Complying with all local and national electrical codes, securing the necessary permits and licenses, and setting up a robust operational framework are steps toward realizing the dream of a fully functional utility.

Constructing the Dream: Procurement and Construction

The next phase involves procurement and construction. Transparent procurement processes, meticulous adherence to safety standards, and environmental regulations guide this phase, ensuring a high-quality, reliable microgrid. This could be an engine for upgrading manufacturing capacity in Nigeria to meet the need for materials, from the smallest screw to the largest panels, creating jobs all along the value chain. A new level of project management expertise will be required to ensure this (staggered) implementation of electricity capacity succeeds.

Commissioning, Customer Onboarding, and Operation

Once construction is complete, the microgrid undergoes rigorous commissioning that involves meticulous testing of each system component. Then, customers are onboarded – a crucial step in which they are educated about the functioning of the microgrid, billing mechanisms, and their role in ensuring its success. A proficient local team is recruited and trained for operations to ensure smooth functioning and quick resolution of any issues. Since it is ‘micro-infrastructure’ being deployed, the large-scale construction management that was typical of centralized power systems will not be necessary. That being said, there will still be a need for technology-supported project management.

Monitoring, Customer Service, and Continuous Improvement.

Post-launch, there will be a need for ongoing monitoring and maintenance of the system. This includes continuous monitoring (again carried out with IoT devices), excellent customer service, and consistent improvement. IoT plays a significant role here as well, enabling real-time tracking of performance, efficient outage management, and proactive energy theft detection.

A sustainable solution like a microgrid, particularly those harnessing micro solar and battery storage technologies, brings with it not just an alternative power source, but a comprehensive, forward-thinking approach to energy provision. As I outline above, with meticulous planning, careful design, effective use of IoT, and an ongoing commitment to improvement, microgrids can become the linchpin of resilient and sustainable communities. With the understanding of what it’ll take to develop power capacity for 9k people, we can scale this up to 90k, 1M, 10M, and then 100M people across the country. The decentralized and distributed nature of the system will also ensure that there is no single point of failure when inevitable system disruptions happen.

Like Ma Bess, who took the opportunity to vastly improve her service and delight her customers, Nigeria stands on the cusp of a once-in-a-lifetime opportunity to get things right. According to the past vice-president, Nigeria will need $410Bn above the current investment to upgrade the power system, providing a 15-fold increase in capacity. Due to the amount of money involved and the complexity of the work required, grifters will show up. There will be non-experts claiming expertise. Investments will be unwisely disbursed and spent. But at the end of it all will be customers asking to be provided with electricity to power their lives and businesses. It’s important to not screw this up.

Seyi Fabode