Husk Power Systems to build 500 minigrids in Nigeria

• Signs U.N. Energy Compact to connect 1m users to 5,000 minigrids

Sopuruchi Onwuka

Microgrid electricity provider, Husk Power Systems, has declared intention to expand its rural clean energy services in Nigeria and other nations in Africa and Asia where it plans to host some 5,000 minigrids.

The expansion of minigrid solutions to rural electrification is part of the company’s pact with the United Nations to enhance the realization of the universal Sustainable Development Goal-7 with regards to citizens’ rights to accessible, affordable and available clean energy.

The company with operates sic minigrids in Nigeria plans to develop additional 100 grids in by 2023; with an outlook for 500 mini-grids in a period of five years.

On a broader scale, Husk said it has an ambitious goal of installing at least 5,000 minigrids to connect one million users including 500,000 small and medium-sized enterprises in Nigeria, Tanzania and India by 2030.

The company claims in a statement on its website to the leader and operator of the largest fleet of solar hybrid mini grids; saying that it signed an Energy Compact with the United Nations to scale the rural clean energy market in South Asia and Sub-Saharan Africa.

Energy Compacts are voluntary commitments to Sustainable Development Goal 7 (SDG7) – access to affordable, reliable, clean and modern energy – with specific, trackable actions to advance progress on the energy transition and net-zero emissions.

SEforALL spearheaded the process as a key outcome to the UN High-level Dialogue on Energy and COP26 in 2021.

Husk says its compact put forward seven goals for the year 2030, including building at least 5,000 mini-grids; making 1 million connections; powering 500,000 micro, small and medium-sized enterprises (MSMEs); and benefitting 11 million people.

Others are installing 500MW of rural commercial & industrial (C&I) solar; selling 5 million energy-efficient appliances; and avoiding 7.0 million tons of carbon dioxide emission.

According to the World Bank, minigrids have the potential to provide power to nearly 500 million people.

To do that, over 200,000 minigrids and $200 billion would be needed. However, there are currently only 19,000 minigrids globally and the industry has only attracted $5 billion.

“The mini grid industry is starting to scale and is demonstrating significant socio-economic impact, but we still have a long way to go to reach our full potential,” said Husk Power CEO and Co-founder Manoj Sinha. “Our compact with the UN is intended to put forward a more ambitious vision not only for Husk but the entire mini grid industry and by doing so, to mobilize a much higher level of climate finance and more supportive government regulation and policy.”

UN-Energy and SEforALL programme manager, Kanika Chawla, stated: “We welcome the Energy Compact commitments made by Husk Power and appreciate their leadership. It showcases the business opportunity presented by the global energy transition, and how private enterprises can drive accelerated action on ending energy poverty, expand renewable energy solutions for consumptive and productive load, and improve the adoption of energy efficiency solutions by end consumers.”

Husk Power Systems says its smart and sustainable solutions accelerate access to clean, modern and affordable electricity in Africa and Asia and catalyze socio-economic development.

CEO and co-founder of Husk Energy, Manoj Sinha, declared in a secondary report that “Husk is committed to powering households, but our focus is first and foremost on micro, small and medium enterprises (MSMEs), and public institutions like health clinics and schools. MSMEs are the engine of economies in Africa, and powering existing small businesses and encouraging the formation of new MSMEs helps create the type of economic growth and social benefit that carries over to households by creating more opportunity and more jobs.”

The firm is surfing on Nigeria’s supportive regulatory environment where mini-grid operators are “largely free of permit requirements for either standalone off-grid mini-grids or interconnected mini-grids.”

The Nigerian Electricity Regulatory Commission Mini-Grid Regulation (2016) stipulates the transfer of assets and financial compensation for mini-grid operators in cases where the national grid finally connects the regions where private mini-grids are operational.

Husk is one of the companies participating in the Nigeria Electrification Project, which provides performance-based grants, a sort of capital subsidy, to mini-grid developers — part of the national effort to solve the country’s chronic power supply issues.

“In terms of policy frameworks and regulation, the Nigerian mini-grid policy is seen to have the most conducive policy in sub-Saharan Africa at the moment, which also includes their Nigeria Electrification Project (NEP), a program administered by the Rural Electrification Agency and funded by the World Bank to provide a capital subsidy to mini-grid developers and accelerate market development,”  Sinha said in part.

Nigeria and India are the company’s biggest markets at the moment. A supportive environment encourages investments from private players like Husk, and bridges the energy needs of households and small businesses, especially in rural areas.

According to the World Bank, mini-grids have the potential to provide half a billion people with clean energy by the end of this decade (including those using overburdened grids) with the right policies in place. They also provide cleaner and cheaper alternatives of energy, which could transform the lives of millions of people living in darkness.

Sub-Saharan Africa accounts for 75% of the world’s population with no access to renewable energy solutions and electricity. Countries like South Sudan, Burundi, Chad, Malawi, Burkina Faso, Madagascar and Tanzania are among some of the least electrified countries in the world, and could benefit from clean energy from solar or wind.

“For off-grid communities, where diesel generation is the default source of electricity, the savings to our customers are significant. Businesses can expect about a 30% reduction in their monthly energy costs by switching from diesel to solar mini-grid electricity,” said Sinha.

Husk has to date raised $40 million from investors, including the Shell energy company and the Dutch Development bank FMO. The startup, which also provides financing for household and commercial appliances, was recognized last year by the 2021 Renewables Global Status Report as the only mini-grid developer with over 100 community sites in operation.