Base scenario
The following assumptions were used for the base scenario: 100% electrification rate by 2030, with 2013 being the base year; current pump price of diesel fuel per litre of US$0.96, 1,460-h operation of diesel mini-grid per year; average household demand of 330 kWh per year; a mean inter-household distance of 25 metres and a rural-urban population threshold of 20,000. All input model data were obtained in 2013 except the population data that was projected from 2006 to 2013 using a 2.8% growth rate estimate of the National Bureau of Statistics (NBS). Table 1 shows the base scenario results of the national costs of electrification in Nigeria based on the NP modelling analysis.
Table 1
Cost estimates for rural electrification in Nigeria
At the national level, an overall total cost of US$34.539 billion is estimated for the initial and yearly recurring costs for the 17-year planning period. A total number of 28.5 million households are to be electrified by 2030, which translates to an estimated 125 million people. Currently, an estimated 73 million Nigerians lack access to electricity going by the NBS figures of 2013.
The results further show that 98%h of the households currently without access are to be electrified via grid expansion, while the remaining 2% will be electrified through mini-grid technology. The average connection cost per household for grid technology is US$899, while that of the mini-grid is US$775. Recurring cost per household per year for grid technology households is US$318, while that of mini-grid is US$316i.
The system total levelized cost for the grid and mini-grid technologies are estimated at US$0.30 and US$0.47j per kWh, respectively, over the planning period. Total length of MV and LV lines proposed under the base scenario is 12,193,060 m (12,193 km) and 711,954,700 m (711,954 km), respectively. Nigeria currently has a total transmission line of 12,337 km, which is, 5,650 km of 330 kV transmission lines and 6,687 km of 132 kV transmission lines. The implication of results from the analysis is that an additional 12,193 km of MV lines is required for 100% expansion of electricity to rural Nigeria. Unfortunately, data for the LV distribution lines in Nigeria is not available to researcher for comparison with the result derived from this research.
Overall, an average of US$2 billion dollars annually is required for the next 17 years (2013 to 2030), in order to achieve 100% penetration rate of rural electrification in Nigeria. This will provide new access to electricity for an average of 1.68 million households yearly between the planning years (2013 to 2030).
In order to get a more disaggregated result, the same process applied to get the national level result was also applied to each of the 36 states of Nigeria and the capital city of Abuja. This entailed collating data for all the local government areas of all the states and running the model for each of the states in Nigeria. Table 2 shows the base scenario results of a more disaggregated electrification cost estimates for various states in Nigeria.
Table 2
Cost estimates for rural electrification of various states in Nigeria
From Table 2, we observe that Kano state in the North-Western part of Nigeria and the most populous state in Nigeria according to the 2006 census have the highest number of households without electricity at 1.8 million people approximately. An average of 769,000 households in each state of the federation lack access to electricity, and the state with the least number of unelectrified households is Edo state at 106,000 households approximately.
As expected, the grid technology is the preferred and least-cost technology for rural electrification in most states, with most states going 100% grid, and averagely 95%, while the state with the least grid penetration is Imo state in South-Eastern Nigeria, with a recommended grid penetration rate of 65%. The mini-grid technology has an average of 2% in terms of households electrified, and Imo state again takes the lead as the state with the highest mini-grid recommended technology at 35%.
We also observe that while Kano state has the highest number of unelectrified households, it is not necessarily the most costly state to electrify. Borno state is the most costly grid-based state to electrify in Nigeria with an approximate cost of US$2.9 billion, while the least expensive grid-based state to electrify is Edo state at US$73 million. An average cost of US$1 billion dollars would be required to electrify each state in Nigeria. Reasons for this disparity in costs for grid based electrification for different regions can be attributed to distance of locations from existing grid infrastructure, topography and population size of different regions.
For mini-grid recommended households, Oyo state in South-West Nigeria will require an estimated US$183 million being the highest for mini-grid component of its electrification, while an average of US$35 million of mini-grid technology investment is required for electrification of various states in Nigeria, and Abia state in South-East Nigeria requires about US$6 million for its mini-grid component of rural electrification.
Taraba state which is currently the least electrified state in Nigeria requires 96% grid extension and 4% mini-grid technology for rural electrification. This translates into US$1.18 billion for grid expansion and US$39.7 million cost of mini-grid investment for rural electrification over the planning period.
The levelized costs of each system technology as well as costs per households are also shown in Table 2. We observe that the average levelized cost of grid-based electrification (US$0.33) is lower than the mini-grid electrification of (US$0.47). However, the cost per household of the mini-grid electrification option (US$1,031) is lower than that of the grid (US$1,190) on the averagek.
With the aid of the pivot table tool of Microsoft Excel 2010, the demand assumptions were categorized into four household level population sizes. The household bins are defined as follows: 1) 1 to 10,000, 2) 10,001 to 25,000, 3) 25,001 to 50,000, 4) 50,001 to 100,000 and 5) >100,000. Figure 1 shows the base scenario household count by bin categorization. We observe from the graph that mini-grid technology is only viable in areas with populations between 1 and 25,000 households. However, household bins of 25,001 and above are 100% grid recommended. This goes to show that grid technology makes more economic sense in areas of higher/dense population than in sparsely populated areas.
Table 3 shows the estimated grid extension for the proposed MV and LV lines needed to connect households in various states in Nigeria. For grid compatible LGAs, the total MV and LV lines required to connect about 27.8 million proposed grid compatible households currently without access to electricity in Nigeria are 12,341,906 m and 711,954,700 m, respectively. Furthermore, Nigeria requires an average of 0.43 m of MV grid length and 25.01 m of LV grid length to connect various households in each LGA that are grid compatible.
Table 3
Proposed length of MV and LV lines for each state in Nigeria
A break-down of the total length of MV and LV gridlines proposed per state from Table 3 shows that Borno state has the highest proposed MV gridline of 883,698 m, while Kano state has the highest proposed LV gridline of 43,242,500 m and Nasarawa state has the highest proposed MV gridline per household of 0.77 m. The three states are in the Northern region of Nigeria. On the other hand, Edo state has the least proposed MV and LV gridlines of 26, 271 m and 2,657,925 m, respectively, while Lagos state has the least proposed MV line per household of 0.11 m. Both states have the highest existing grid coverage in Nigeria which makes them require relatively short lengths of MV lines needed to connect households compared to the North, and Lagos especially is highly populated with a high population density. Both states are in the southern part of Nigeria.
Sensitivity analysis
A sensitivity analysis was carried out to determine how outcomes of the model may vary with changes in the different input parameters. A specific evaluation of how effects of changes in cost of solar panels, diesel fuel cost and household electricity demand affect the results of the model was done. Results of the sensitivity analysis show that outcomes are indeed sensitive to changes in the cost of solar panels, diesel fuel cost and households demand as discussed below.
Effects of reduction in solar panels
A reduction in the cost of solar panels from US$2,000/kW used in the base scenario to US$500/kW (assuming a drastic crash in the cost of solar panels based on the current decreasing market trend for solar panels) would make grid the least-cost option for about 66% of the population and off-grid the least-cost option for 34% of the population. Total cost (US$34.3 billion) is slightly lower than the base scenario of US$34.5 billion, levelized costs for grid and off-grid systems are US$0.28 and US$0.35, respectively. Table 4 shows that while the total length of proposed LV lines remains the same as in the base case, a proposed length of MV line if solar panel reduces to US$500 is 7,176,921 m. This is lower than the base scenario length of 12,193,060 m, due to more LGAs becoming off-grid compatible.
Table 4
Cost summary table for solar panel reduction to $500
Figure 2 shows the household count by bin type. We observe that for LGAs with households ranging from 1 to 10,000, off-grid technology was recommended as the least-cost option, same for LGAs with population ranging from 10,001 to 25,000, and a part of LGAs with a population range of 25,001 to 50,000 and 50,001 to 100,000. However, LGAs with population of 100,000 and above all went for grid as the least-cost option. This scenario is slightly different from the base scenario where populations from 50,001 and above all went for grid as the least-cost option.
Figure 3 shows the map of Nigeria with the recommended technologies in various states in Nigeria when the cost of solar panels reduces from US$2,000/kW to US$500/kW. It was drawn with the aid of the ArcGIS software 2010 [16].
Effects of changes in diesel fuel cost
Reducing the pump price of diesel fuel from US$0.96 to US$0.65 in this scenario based on projected improvement in diesel refining capacity in Nigeria and diesel availability at competitive market price when Dangote Group’s 400,000 barrels a day refining capacity eventually comes up in 2016, results in a significant shift in the population covered by the diesel mini-grid system. Table 5 shows that for other variables remaining equal, the grid compatible population reduces from 98% in the base scenario to 51% when diesel price alone is reduced to US$0.65, while the mini-grid population increases to 49% from 2% in the base scenario. This is due to affordability of the mini-grid system as diesel price which is a major input is reduced drastically, as more LGAs are now able to afford it.
Table 5
Cost summary table for reduction of diesel cost to $0.65
We also observe a reduction in MV line length to 3,450,760 m compared to the base scenario, as well as a lower levelized cost and total initial cost. However, the total recurring cost in this scenario is higher than the base scenario; this may not be unconnected with the purchase of diesel on a regular basis for the mini-grid system.
We observe from Figure 4 that more household bins (0 to 100,000) now use the mini-grid system, as opposed to the base scenario where only household bins from 0 to 25,000 only used mini-grid. It goes to show that affordability of any technology is a major factor in determining the number of households that will embrace a rural electrification technology option.
Figure 5 shows the map of Nigeria and recommended technologies when diesel price is reduced. We observe that the red and black dots are now almost evenly spread around the country when compared to the base scenario that had the red dots spread almost in all parts of the country.
Effects of simultaneous change in solar panels and diesel fuel
From the preceding scenarios, we have seen the effect of a reduction in solar panels alone as well as a reduction in diesel fuel price alone. In this scenario, a simultaneous reduction in solar panels to US$500 and diesel fuel price to US$0.65 results in a fairly balanced allocation of population for each technology option. Under this scenario, 46% of the population would be supplied by the grid as the least-cost option, 24% of the population would be served via mini-grid as the least-cost option, while 30% would be served with off-grid technology option as the least cost.
Table 6 shows that the levelized costs for grid and mini-grid are also lower compared to the base scenario, as well as the system total initial cost and recurring cost. The table also shows that while total proposed LV line length remained unchanged, the total proposed MV line length in this scenario is significantly lower than the base scenario from 12,193,060 m to 3,271,686 m.
Table 6
Cost summary table for reducing solar panel cost to $500 and diesel fuel cost to $0.65
Figure 6 depicts this scenario in a graph. The picture shows a diversified electrification technology base where the lower household bins range of 0 to 25,000 is wholly off-grid, LGAs with population of 25,001 to 50,000 are fairly diversified in terms of technology choice (off-grid, grid and mini-grid), and the upper households have more of grid and mini-grid.
The map of Nigeria in Figure 7 shows the recommended technologies by regions. The off-grid LGAs as seen in the map are more concentrated in the South-West and South-South of the country, while the mini-grid option is more cost effective in the North-West and North-East. The grid system is spread all over the country but with particular presence in the North.
Effects of changes in household demand
An increase in demand from 330 kWh in the base scenario to 400 kWh makes the grid system the least-cost option for about 99% of the population, with the remaining 1% going for diesel mini-grid. Under this scenario, there is no off-grid recommended option due to the increase in household electricity demand. The grid system seems to be more viable for communities with high demand and population compared to sparsely populated areas which traditionally are off-grid compatible.
When household demand increases to 400 kWh, total MV line length increases from 12,193,060 m to 12,662,177 m. The increase is attributed to connection of more LGAs to the grid as compared to the base scenario. On the whole, we observe that while an increase in demand leads to the connection of more LGAs and promotes access, it also increases initial and recurring costs, though not proportionate when compared to the base scenario. Table 7 gives more details.
Table 7
Cost summary table when demand increases to 400 kWh
Figure 8 shows that when demand increases, more households become grid compatible, even households between 0 and 10,000 that all went mini-grid or off-grid in other scenarios.
Figure 9 depicts this scenario in Nigeria’s map. The red dots represent the grid LGAs while the black ones denote the mini-grid LGAs.
On the other hand, when electricity demand reduces from 330 kWh in the base scenario to 250 kwh in this scenario, naturally, less LGAs become grid compatible as observed in the decrease from 98% in the base scenario to 95% in this scenario. Table 8 shows that costs are reduced under this scenario, as well as MV line length. However, the levelized costs under this scenario are higher as seen in Table 8.
Table 8
Cost summary table when demand reduces to 250 kWh
Figure 10 shows the map of Nigeria and recommended technologies when demand is reduced from 330 kWh to 250 kWh.
Comparison of results with other studies
Table 9 uses the household as the unit of comparison between the results of our base scenario and case studies of Ghana [17,18], Senegal [19,20] and Kenya [10]. Summary of results from the table reveals that while an estimated 28.5 million households will be electrified in Nigeria, representing the highest, the average number of households electrified from the table is 9.4 million, while Senegal has the least number of 134,500 households electrified.
Table 9
Base scenario result comparison with other studies
Average total electrification cost for the four countries compared is US$12.2 billion, while the least was US$150 million for Senegal. The variance in costs is attributed to the different time horizons used for various studies, as well as differences in population, household numbers, costs of various technology components and cost of diesel fuel.
However, in terms of per household costs, Ghana takes the lead with US$2,082, followed by Kenya at US$1,552, Nigeria with US$1,212 and the lowest being Senegal at US$1,048. Several factors such as population and number of households may be reasons attributable for the discrepancies.
For total length of proposed MV and LV lines, the table also reveals that Nigeria requires the highest, while Senegal requires the least. Although the per household costs vary, as more lengths of MV lines are required for Senegal and Ghana when compared with Nigeria, while an average of 24 m of LV line length is required for all the countries compared.