Economics of renewable makes sense in the long term

business a.m.’ BUKOLA ODUFADE recently sat down with Aniche Phil-Ebosie, director and renewable energy project developer with Togata Renewable Technologies, who revealed that his company now sources as much as 90 percent of the materials used to develop  biogas systems locally. He also spoke on how biomass projects have increased as investors and clients become more interested in the industry.

Since the last time we talked, how much effort has been put into biomass development in Nigeria, especially by the private sector since government’s participation is low?

 In the last six months, we have seen quite a few companies emerge with biomass solutions, so it is no longer what it was. People have come into a better understanding about it; more businesses are coming into the sector. We get a lot of emails asking us to consult as more and more companies want to start biomass solutions in Nigeria, and build biogas plants.

Also, it is easier to speak with clients now because they all have a basic understanding of what biomass is about. Now, they have probably heard about it from someone or somewhere, so you don’t talk as much as you would in the past about it.

 As a biogas company, you mentioned that cost is still one of the key issues affecting the biomass industry, how has your company played around that?

For the scale of biogas projects my company is into, we decided to miniaturize our systems, making them smaller to attract more market, the main issue with waste to energy project has always been cost. We had to develop indigenous systems where up to 90 percent of the materials used to construct our systems are sourced locally. We offer system from 5 cubic meters that is 5000 litres, to 100 cubic meters and much more. But we found that our 5 to 10 cubic meter system suits most of our clients better as this usually accommodates the quantity of organic waste they generate daily.   In this year alone, we have installed 3 of our 5-10 cubic meter biogas systems, with a fourth in progress. We have our systems installed at boarding schools, large food catering services and our next project is at an abattoir.

We have also sent proposals to universities because they have a lot of cafeteria there and the universities also generate lot of food waste.  For example, our system in one of the boarding schools reduces the need for LPG for cooking by at least 30 percdent, it doesn’t take out the need for LPG by 100 percent, the school is able to cook at least one meal a day for over a thousand students using biogas, obviously it is a boarding school and so they have to do three meals a day but now, just two meals are made using LPG.

The quantity of organic waste produced at a client’s facility will determine what size of biogas plant we install and this in turn determines the amount of biogas that will be generated.

One of our biogas systems was developed for a company that caters for international airlines, so all the food waste from  inbound flights  is collected and converted to biogas on their premises.  In this case, the company is more interested in CO2 emission reduction and less about energy.

Our most recent project, which is actually still in the pipeline, is to convert abattoir waste to electricity for captive use by the abattoir itself.

Our technology is quite simple actually, it involves retrofitting polyvinyl chloride tanks and because these tanks are already prefabricated to our specifications, it makes our job faster.

Your anaerobic digesters (biogas systems) are 90 percent made in Nigeria. Can you walk me through the technology and what was responsible for the change?

The technology is everywhere and everyone has a different way of making things. There are different types of biogas plants, from all over the world; from concrete, stainless steel, from low density polyethylene (LDP) to high density polyethylene (HDP), to plastics, and so many different techs – high tech, low tech, medium tech.

Our challenges started when we found it so difficult to sell the German systems we were marketing, so we thought it was time to find our own indigenous technology. We decided to check other developing countries, we looked at Kenya, Mexico, and a few others, most of these people based their system on low density polyethylene.

We do have LDP here but it is still very expensive and a special equipment is needed to mould and wield the LDP into the shapes you want it to take, so we didn’t think that was a good solution for us. We decided to go with polyvinyl chloride, one can go to plastic companies and order tanks in different sizes and specifications, as long as the order is large enough.

We take these tanks and install our agitators, substrate loader, grinders, biogas storage and other accessories that make the biogas system. We are also planning modularized municipal waste system, which will be about a hundred and twenty cubic meters minimum. This will deal with the organic portions of waste collected by the responsible authorities.

Has this had a big relief on your business because you don’t import as much anymore?

 We still import a few things we can’t make here. Like I said, 90 percent of our equipment is now local, so the 10 percent left is still imported because we don’t make them here. These are mostly flame proof electric motors and a few other minor accessories.

We also talked about other hindrances, like lack of information and, majorly, access to funding, what has changed?

Access to funding is still basically the same, because most financiers that understand the business want to invest in large scale solutions, it is difficult to find funding for small scale systems.  But things are getting better as there is better awareness.

Is your company into bio fuel as well?

I didn’t want to mention that, we are actually going into that but we are not there yet so for now it is just biogas.

 Speaking realistically, is biogas feasible in Nigeria?

 When we started, our designs and first set of plants were from Germany. They were big and expensive and very hard to sell, and in order to remain in business, we had to sit down and innovate and think of ways to design a biogas plant that is more affordable for SMEs in Nigeria.

And SMEs make up the bulk of the economy.

Yes, especially SMEs that generate waste as a by-product of their commercial activities (I say by-product because waste is no longer useless, it is a critical resource to any business). If you look at it, we have cafeterias, restaurants, hotels, livestock farms, markets, etc. If the biogas system is too expensive, they will not want to make the investment, they would keep letting the waste go to waste by paying to get the waste dumped in landfills.  So, we had to look for a way to catch this market segment , Co2 emissions reduction doesn’t really catch anybody in this part of the world, making the earth greener and cleaner doesn’t work, the only thing that works is cost reduction and profit generation.

What has the feedback from clients been?

The funniest thing is that every client we build for wants to partner with us, as soon as we finish the project. The MD always comes and says my goodness, I think I know some other places, can I buy shares, can I partner, can I be an agent, they all want to be part of this. And it’s quite understandable, as this is a simple and much required solution.

So, everyone wants a piece now?

Yes, once they see how well it works. Prior to that, everyone is doubting and looking at you to see what magic you are going to perform, but once they see the benefits, they all jump on it. That said, the easiest projects we have had were the ones we had a project champion within the organisation. What I mean by project champion is the one person within the client organisation that understands biogas or waste to energy more than everyone else. And he is the one that keeps pushing everybody else on your behalf, not because he wants anything in return, but because he understands renewables and sees the benefits.

Despite the low participation of government in biomass are there any biomass projects coming from government?

Well, there are a few projects going on here and there. And the resistance that comes from the conventional energy producers and distributors is still there.  On the short term it is still more expensive to generate electricity via renewables, but in the long term, the economics start to make sense.

To compete with grid costs, one would need to sell energy at prices that would not really cover our cost of construction and development, depending on where one gets the project financing from. So most times, people going into renewable energy prefer servicing cluster, estates, rural communities and urban communities that are not connected to the grid. The only way renewable energy players can play in the market without subsidies is to be an alternative to diesel. To be an alternative to the grid is still pretty difficult because you would need to have very low project prices and single digit interest rates from banks or any other financiers.