Assessing business markets for renewable energy system investments
nLine deployed sensors at 78 markets across 28 states in Nigeria to provide data for a university-led study to understand markets’ energy access, energy demand and energy consumption. Data from the sensors helped inform baseline power quality and reliability at each of these already-electrified markets. Sensor data, along with collected survey data, geospatial studies and load estimates, will be used to inform future mini-grid installations at these markets in order to provide more reliable, high quality electricity for businesses and to promote economic productivity and operations.
Motivation
Around the world, economic activity is hampered by unreliable electricity access. If electricity is not usable in practice (e.g. due to frequent power outages or poor voltage quality) businesses often suffer from low productivity and the costs incurred for energy coping strategies (e.g. purchasing and operating a generator). Research efforts, such as the World Bank Enterprise Survey, confirm that stable electricity is consistently linked to higher business productivity.
Year in and year out, government electrification agencies and investors budget for grid expansion, grid upgrades, and/or mini-grid installation to boost power quality where the grid is unreliable. One such program is the Energizing Economies Initiative (EEI), a private sector-led program launched by the Federal Government of Nigeria and implemented by the Rural Electrification Agency (REA). This program is aimed at providing clean, reliable, and affordable electricity to “economic clusters” (e.g., markets and shopping complexes) and is part of the government’s wider Micro, Small and Medium Enterprise (MSMEs) program. For this project, REA pre-selected 78 markets across 28 states and 6 geopolitical zones.
In order to facilitate the development of dedicated, clean energy solutions for markets, energy audits and baseline surveys need to first be conducted to understand the current electrification status, energy consumption and energy demand in each market. This information can then be shared with private developers who will develop, operate, and maintain the renewable energy solutions. Ultimately, this data can serve government electrification agencies, power providers, and investors alike to inform and evaluate future energy infrastructure investments.
Project Description
e-GUIDE, a Rockefeller Foundation funded initiative led by five universities, provided expertise to support Nigeria’s Rural Electrification Agency in assessing each of the 78 markets for future renewable electrification projects. This country-wide study aimed to quantify electricity demand in each market through a study encompassing a series of well-designed energy audits, baseline surveys, sensor measurements and metering infrastructure.
The objective of this project is to measure the ‘latent demand’ for electricity in Nigerian markets. Latent demand refers to electricity consumption that is not realized due to the poor reliability and quality of current supply, and the high cost of backup generation. The methodological approach is to measure shop-level electricity consumption from all sources prior to mini-grid installation and after.
The central hypothesis of this project is that the installation of mini grids will improve electricity service quality and reliability and lower costs, thereby increasing consumption of electricity in markets.
A data-driven view of current power reliability is crucial for identifying areas needing new or modified energy systems versus those well-served by existing infrastructure. This data is largely inadequate or fragmented (i.e. data might exist but it’s aggregated at a high-level or is not publicly available). Power quality data can quantify electricity reliability issues within and across markets to inform electrification planning.
nLine partnered with the e-GUIDE research team to design and implement a sensor installation sampling strategy that would help understand the state of power reliability and quality for businesses in the 78 markets. In March 2022, Vista Advisory began visiting the 78 markets. nLine sensors were installed in each of the markets to remotely monitor the presence or absence of power and the voltage and frequency of the power supply.
Our data collection approach included installing one sensor in five randomly selected shops within each of the 78 visited markets. These five shops were randomly selected based on pre-qualification criteria including spatial distribution across market sections, electricity connection at the shop, consent of the shop owner, etc. The sensors remained plugged in and gathered data while energy audit surveys were conducted across the market. Once the surveys were complete, sensors were unplugged and gathered to install at the next market. Given the range in market size (from 9 to 13,691 shops), the time that sensors stayed plugged in varied significantly depending on the time required to complete the market energy audit surveys (from a few days to 1+ months). In total, nLine sensors were installed with a sample of 298 shops across the 78 markets.
e-GUIDE researchers paired nLine power outage and voltage data with geospatial studies, energy audits, load estimates, baseline surveys with shop owners, market-level surveys, clamp meter data and air quality sensor data. This data collection method afforded both granular and aggregated analyses of shop-level and market-level electricity access and consumption prior to planned mini-grid installation.
Key Insights
Longitudinal measures of voltage quality, the number of power outages, and the duration of the outages can pinpoint which markets are most impacted by power quality and reliability issues. When this information is combined with other available power sector data, electrification planners such as Nigeria’s REA can gain a more complete picture of the nature of power quality and reliability in markets, and better identify which markets are in dire need of power supply improvements to strengthen productivity and economic growth.
Stay tuned for study results!