500 solar mini-grids will be launched in Nigeria by Husk Power Systems over the next five years.
The renewable energy firm revealed the plans today when it announced the signing of a voluntary commitment with the United Nations to grow its energy market in sub-Saharan Africa and South Asia. Leading energy buyers, suppliers, equipment manufacturers and governments have joined together to make a commitment under the 24/7 Carbon-free Energy Compact to accelerate the use of carbon-free electricity as a way of averting the effects of climate change.
Half of the 1 million connections that will be made by the startup will be micro, small and medium. The first six mini-grids in Nigeria were launched in November of last year, and are expected to have 100 operational within two years.
The focus of Husk is on micro, small and medium enterprises, and public institutions like health clinics and schools. The company's CEO said that the formation of new Micro, Small and Medium Businesses helps create the type of economic growth and social benefit that carries over to households by creating more opportunity and more jobs.
The renewable energy firm is planning to launch 500 mini-grids in Nigeria in a period of five years, and is eyeing the rest of Africa for expansion.
The firm is looking at growth opportunities in the western, southern and eastern regions of Africa, as well as the countries that have a supportive regulatory environment. There are no permit requirements for mini-grid operators in Nigeria.
In cases where the national grid finally connects the regions where private mini-grids are operational, the Nigerian Electricity Regulatory Commission Mini-Grid Regulation requires the transfer of assets and financial compensation for mini-grid operators.
The Nigeria Electrification Project provides performance-based grants, a sort of capital subsidy, to mini-grid developers, as part of the national effort to solve the country's chronic power supply issues.
In terms of policy frameworks and regulation, the states where Husk works in India have supportive policies. The Nigerian mini-grid policy is based on those policies. Nigeria is seen to have the most favorable policy in sub-Saharan Africa at the moment, which also includes their Nigeria Electrification Project (NEP), a program administered by the Rural Electrification Agency and funded by the World Bank to provide a capital subsidy to mini-projects.
The company plans to have more technological and business model innovations. The image is from Husk Power Systems.
The company's biggest markets are Nigeria and India. The energy needs of households and small businesses in rural areas can be bridged by a supportive environment.
At the start of the month, mini-grid power systems in Kenya were granted a 50% tax allowance and other tax incentives enjoyed by large-scale generators.
The Energy Compact commitments made by Husk Power are welcome. The business opportunity presented by the global energy transition, and how private enterprises can drive accelerated action on ending energy poverty, expand renewable energy solutions for consumptive and productive load, and improve the adoption of energy efficiency solutions by end consumers, is highlighted in this report.
According to the World Bank, mini- grids have the potential to provide half a billion people with clean energy by the end of this decade. Millions of people living in darkness could be changed by cleaner and cheaper alternatives of energy.
75% of the world's population is from Sub-Saharan Africa, which has no access to renewable energy solutions or electricity. Some of the least-electrified countries in the world could benefit from clean energy from solar or wind.
The savings to our customers are significant for off-grid communities where diesel generation is the default source of electricity. Businesses can expect a 30% reduction in their monthly energy costs if they switch from diesel to solar mini-grid electricity.
Shell energy company and the Dutch Development bank are some of the investors that Husk has raised money from. The startup, which also provides financing for household and commercial appliances, was recognized last year by the 2021 Renewables Global Status Report as the only mini-grid developer with over 100 community sites in operation.