Nigeria alone is home to 60–70 million generators and holds the unfavourable title of the world’s second-largest generator market. By 2050, it will be the 3rd most populous country in the world. If we look at it from a purely economic perspective, using generators is extremely expensive for a household. “People are paying between $0,85 and $1.75 per kilowatt hour of power here in Nigeria, when in Germany, where the cost of power grid is considered as expensive, people pay about $0,20 per kilowatt hour. On the other hand, the cost of solar equipment continues to fall aggressively,” explains Ademola Adesina, a Nigerian entrepreneur who has set the objective to reduce Africa’s reliance on generators.
It’s common knowledge that the generators are also extremely unhealthy. “The fumes from these generators are literally poison, especially when used in close proximity and tight spaces, which is often the case,” explains Ademola. Air pollution was responsible for 19% of cardiovascular deaths worldwide in 2015, 24% of ischaemic heart disease deaths, 21% of stroke deaths and 23% of lung cancer deaths. “Air pollution has also been linked with neurodevelopmental disorders in children and neurodegenerative diseases in adults, and we know generators are a major contributor to this,” continues the entrepreneur.
Because of the relative lack of infrastructure when compared to the west, whether this be related to energy, financial services, or even education, African entrepreneurs have the benefit of being able to build from scratch without the hindrances that unsustainable efforts elsewhere are burdened by. So what one finds isn’t sustainable businesses for the sake of sustainability but because it makes sense when all pertinent and existing externalities in Africa are considered.
Ademola Adesina is the Founder and CEO of Rensource, a subscription based energy service that gives its clients the ability to fill the energy gap between what the woefully inadequate centralised power grid in Nigeria offers them, and what they really need to carry out their day-to-day life. The system uses a combination of long-lasting lithium based batteries and solar energy and like most of these solutions in Africa, the service is offered through a mobile based user interface that allows its customers to pay their bills, and to understand how they use their power.
“What was the reaction of the people in Nigeria when you presented them with your solution?,” I asked Ademola.
“Genuine excitement. I remember walking around a few shops on a tour to see some of the potential use cases for our solar solution and I was confronted by a shop owner. Upon learning of our solar solution he was extremely excited, almost jumping up and down. He said he could not wait for the day he could get rid of his generator. I’m paraphrasing here but he told me: ‘the fumes are terrible and I feel like they are causing me health problems. I know it, but I have no alternative. And the noise is unbearable,I have a headache every day when I go home, just because the government can’t provide us with reliable power. I always thought solar was expensive but what you are proposing can make it affordable for me.’ He immediately asked how soon he could get one,” remembers Ademola.
Africa, home to the world’s fastest growing population, is urbanising faster than other regions and is projected to become 56% urban by 2050. This booming urban population is synonymous with greater stress on the grid, and an increase in generators. But according to Ademola, “Nigeria will become the first economy where distributed power generation from renewable energy is the norm rather than the exception.” His goal with Rensource is to be part of this vision for Nigeria by encouraging people to turn to a solar solution rather than a generator. “The real beauty of our subscription model is that we pass on the technological benefits to our subscribers,” explains the founder. “This means that as the technology improves, so does the potential for our subscribers to eventually go completely off-grid. There really is a version of reality where we get to 2050 and the grid is virtually obsolete as people continually turn to the power from the abundant sun that Nigeria is blessed with.”
Rensource uses the famous “Power-as-a-Service” (PaaS) system. “People want power and electricity, not panels and batteries,” explains Ademola. “This is not a new concept — companies invest in assets and sell you service — this is what cable TV companies and mobile phone companies do. In fact, this is exactly what your typical power company in the developed world does. You pay for the power they provide you and in return they maintain their power assets to ensure they keep supplying you power so you will keep paying. At Rensource we have created a power company, the difference being our assets are distributed across individual homes and business premises rather than being a central power station. This means in exchange for affordable monthly payments, Rensource not only provides you with power, but we also take care of everything, from installation, to maintenance, to replacement of parts. We will even move our solar system for you if you move house. It’s really something you can call “Peace-of-Mind” power.”
Rensource is not the only player in this solar game, and that’s very good news, even for Ademola. “We are expecting to be but a cog in what will be a giant industry consisting of multiple players catering to the middle-class and small-businesses; there will be those catering to utility scale solar systems, and those who are catering to kerosene lamp replacements for rural areas. But we will all have one goal in common: solving Nigeria’s power problem.”
And the good news is, Rensource and other companies entering this market found open and collaborative arms within certain government agencies. “There is an organized and well led effort to incorporate distributed generation more aggressively into Nigeria’s energy mix,” explains Ademola. “Nigeria’s Rural Electrification Agency is one of the more progressive and innovative on the continent.” A concrete example where they are leading is the use of technology to track their portfolio of supported projects in almost real time. They are also introducing initiatives to codify energy efficiency requirements in the building code, something that’s never been done in Nigeria and only on a limited scale outside of Nigeria.
When I asked Ademola about how climate change were affecting Nigerians today, he rather gave me examples about how “WE Nigerians are affecting our environment directly. All you have to do is look up to the sky and see the dense smog that hovers over Lagos on most days. Look to your sides and you see once beautiful buildings blackened by soot. A lot of this is from generator smoke. We have over 60 million generators in Nigeria, 12 million of which are in regular active use, emitting 29 mega-tonnes of CO2 per year, not to mention the carbon monoxides and nitrogen oxides. You can only imagine what this is doing to our climate.”
We finished on an optimistic note. “While playing the role of business developer isn’t new to me, actually building a business from a zero base, no infrastructure, just two guys and an idea is quite new. I’m proud of the team that has been carefully and thoughtfully brought together to execute on our mission. I’ve been surprised yet humbled by the willingness of people who I consider exceptionally talented to listen and agree that we’re endeavouring to build is worth spending time on, and I’m optimistic about Nigeria’s future towards the energy transition because better options and economics usually prevail when people are being rational.”
Article by Anne-Sophie Garrigou