Manufacturers identify 28 clusters for proposed micro grid

The Manufacturers Association of Nigeria (MAN) says about 28 industrial clusters have been identified across Nigeria, eight of which are located in Ogun State and the Ikeja industrial clusters, where mini grid modular plants of between five and 50 megawatts are being planned.

The mini grid modular plants will be established by MAN with support from the Nigerian Electricity Regulatory Commission (NERC).

This project will require huge capital investments, and in Ikeja and Ogun State alone, at least $40 to $400 million would be required for eight mini grid modular plants at the Nigerian industrial cost of $1 million per megawatt, BusinessDay learnt.

This is even as Reginald Odiah, chairman, technical committee on micro grid project, said manufacturers spend N73 million per month or N876 million per annum on alternative energy sources.

Poor supply of electricity to factories occasioned by incessant outages and acute shortages has continued to take its crippling toll on Nigerian manufacturers.

BusinessDay findings from MAN indicate that 40 percent of manufacturing cost in Nigeria comes from privately sourced electricity by firms that collectively produce an estimated 15,000mw from their generators.

Odiah, who is also an engineer and member of MAN, noted that the mini grid concept adopted has the capacity to create jobs, engender business profitability and transform the entire Nigerian economy for the better.

According to him, the NERC needs to assist in reducing business losses for Nigerian manufacturers from the current 40 to around 15 percent through the careful development and effective implementation of the mini grid concept.

In energy sector parlance, micro grid is a term used to describe a localised grouping of smaller modular electricity sources that function and feed energy to the centralised or macro grid system, but can also disconnect and function autonomously as physical or economic conditions dictate.

It is an important means of energy supply from a multiplicity of sources in disparate communities with unique energy needs, ranging from industrial clusters to residential and commercial consumers, especially those that are located farther apart from the national grid.

The plan is that, in order to save cost and increase business efficiency, the power plants located close to pipelines will be gas powered, while others will be powered through solar, hydro or wind energy sources, depending on the comparative geographic advantage.

However, “without the input from MAN, this idea would have died after being conceived by NERC,” said Sam Amadi, the chairman of NERC.

Frank Udemba Jacobs, president, MAN, told BusinessDay in June that manufacturers were planning to resuscitate an earlier planned independent power project, owing to incessant power outages in industrial zones or clusters.

“Right now, we are resuscitating the project and very soon we will sign a memorandum of understanding (MoU) with foreign companies that will help in building it. And this will be mostly for our clusters, that is, areas where we have most of our companies,” Jacobs said.

YANGE IKYAA