1.1 Introduction
A mini-grid refers to a stand-alone power system or an integrated local generation and distribution system with installed capacity below 1MW, capable of serving numerous end‐users independent of the national grid. A mini-grid can provide constant and affordable electricity in remote places where the population density is too low to economically justify connecting that community to the national grid and represents viable and cost effective solutions for the electrification of Nigerian communities through a decentralized energy system (Primeraal, 2021).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
Mini-grids are essentially localized electricity networks that supply several users, whether households or businesses. They can be grid-connected, but they do not have to be. And, as a new report from the Africa Progress Panel (of which one of the authors is a member) shows – and as another report by the Rocky Mountain Institute underscores – mini-grids are an important piece of Africa’s energy puzzle. Mini-grids can have a major competitive advantage over grid extension in rural and remote areas, because they can provide electricity more quickly and at much lower cost. Because mini-grids require less capital investment than grid expansion, it can be easier to secure financing for them, meaning that they can electrify communities that might have to wait years for a grid connection (Mini-Grids, 2017).
Mini-grids also have a distinct advantage over off-grid systems: greater power generation. Productivity-enhancing farm machinery, for example, usually requires more power than off-grid household systems can provide (Strive and Richard, 2017). Moreover, mini-grids can be used to increase the resilience of existing electricity systems. Power cuts on the main grid can affect a large number of businesses and households, and it can be difficult to restore services quickly. Mini-grids can ensure that consumers retain access to power when the grid suffers interruptions (Mini-Grids; 2017).
Despite these benefits, the potential of mini-grids to help address Africa’s energy challenge has yet to be tapped. Reliance on mini-grids is expanding more slowly than in other world regions, with Africa being more likely to implement off-grid systems. One obstacle is the lack of proven commercial business models and adequate and appropriate forms of financing. Another is that policy frameworks often are not accommodating. And many developers and operators lack the requisite knowledge and experience (Mini-Grids, 2017).
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Potentials of the Mini-grid as a Driver of the Nigerian Economy.
1.3 Statement of Problems
Despite impressive economic development in recent years, Nigeria still lags far behind on energy, with almost two-thirds of the continent’s citizens lacking access to electricity. While getting more power to the people is an important goal, extending electricity grids is expensive and slow. Meanwhile, off-grid options may not be sufficient to meet people’s energy needs. Fortunately, there is a third approach that can help fill in the gaps: mini-grids.
The situation is ripe for change. With the United Nations sustainable development agenda ambitiously targeting universal access to energy by 2030, policymakers are paying more attention to electrification, and development-finance institutions and partners are making more funding available. Meanwhile, the cost of renewable energy is falling; energy efficiency is improving, both for generating equipment and for the machines to be powered; and innovative digital technologies are facilitating the management of electricity services (Mini-Grids, 2017).
1.4 Aim and Objectives of Study
The aim of the study is to examine the Potentials of the Mini-grid as a Driver of the Nigerian Economy. In achieving this aim, the following specific objectives were laid out as follows:
- To examine the impact of mini-grid in Nigerian economy.
- To presents the opportunities that have been used in mini-grid in Nigeria.
- To determine the challenges of implementing mini-grids in Nigerian economy systems.
- To find out how government financing mini-grids Nigeria.
1.5 Significance of Study
In this study, the researchers have set out to investigate the potentials of the mini-grid as a driver of the economy. Therefore, this study is expected that it will be of immense interest to the governments at all levels.
To shareholders and interested persons, this study is expected to enkindle their interest the more and they will take note of various recommendations mentioned here and help steer the government and as well ministry of power towards implementing policies on mini-grid.
This study will also help to serve as literature (reference source) to students, individuals or corporate bodies into what to carry out on further research on the potentials of the mini-grid as a driver of the economy.
1.6 Scope of the Study
The study is concerns with a seminar on the potentials of the mini-grid as a driver of the Nigerian economy.
1.7 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).
1.8 Definition of Terms
Electricity: is the set of physical phenomena associated with the presence and flow of electric charge. Electricity gives a wide variety of well-known effects, such as lightning, static electricity, electromagnetic induction and electric current.
Economic Growth: is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.
GDP: the gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy.
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