China’s bottom-up approach to electrification holds lessons for Nigeria

In its 2017 State of Electricity Access Report, the World Bank reports that China’s bottom-up approach to electrification has succeeded in providing access to electricity to 900 million people—with 165 million people gaining access between 2000 and 2014 within 50 years according to the International Energy Association and the World Bank.

The big push began in 1979, driven by economic reforms in rural areas, and by 1997, the country was providing electricity to over 95 percent of households. Electricity access increased further, reaching 99 percent in 2009, driven by the modernization of rural infrastructure and the harmonization of rural/urban consumer tariffs.

As a result, in 2009, the deficit was down to 8 million people, out of a total population of 1.3 billion. Nonetheless, rural electricity consumption per capita in 2008 was just 30 percent of China’s average electricity consumption, suggesting that the rural electricity market has not reached saturation.

China’s critical success factors

China has relied on a bottom-up approach to electrification, with local administration responsible for the local solution. Each county created a rural electrification committee (led by the county governor), which made decisions on rural electrification investments and operation, while overall program planning was kept at the central level.

Some of the solutions have involved a mix of grid extension and off-grid options—with rural electrification relying on three modes of delivery: local grids, central grid, and a hybrid system.

Even though the central grid remained the main mode of supply, local grids played a key role in areas with large hydro potential, with county water bureaus or small hydropower companies, responsible for electricity supply.

To get investors on board, incentives targeting small hydropower, such as a reduced VAT rate and state investment funds assisted. The country distributed stand-alone systems through distribution companies that procure major components from manufacturers directly, small assembly shops selling directly to installers, and retailers selling directly to end users.

China has electrified remote areas through a phased approach, based on pilot projects and capacity building.

Nigeria’s energy sector seems since privatisation in 2013 has failed to deliver value from the exercise. Several factors have been blamed including selling assets to incompetent financial and technical administrators, weak regulatory agencies, failing transmission grids and politicisation of the process.

Experts have called for a variant of the Chinese model, in decentralisation the transmission network and creating regionally managed grids. Similar incentives such as tax waivers granted to operators in China are now required by the government to stimulate investments especially in renewable energies.

ISAAC ANYAOGU