Nigeria swings to solar as diesel costs bite

STORY: This shrimp farm lies on the coast of Africa's biggest oil producer.

However, it's not fossils fuels but solar panels that are powering the aerators and freezing equipment at this $100 million facility on the outskirts of Nigeria's commercial capital Lagos.

It's one sign of how businesses are looking for alternatives as the cost of diesel soars.

Christian Wessels is the president and co-founder of Daystar Power Energy Solutions, which has just finished installing the shrimp farm's 2MW solar power plant.

"We are at the beginning of what is nothing shy of a power revolution of turning to more renewables."

Daystar, which is also building a 6MW plant at a factory in Lagos, says they've seen an increase in demand driven by the rise in diesel prices.

Nigeria has a sclerotic national grid delivering 4,000 MW at its peak.

That leaves businesses and citizens heavily reliant on diesel-powered generators.

But Daystar Chief Commercial Officer Victor Ezenwoko says the price of diesel - which is not subsidized like petrol - has this year more than doubled to 800 naira a liter, or around 1.9 dollars, in some places.

Most of that increase came after the start of the war in Ukraine.

Ezenwoko says, as businesses try to cut costs, Daystar is expecting to double its solar installation capacity to 48 MW next year.

"So right now it is a game of trying to also manage expectations with customers and let them okay, there is a bit of a backlog but we are trying to see how we can accommodate, and who knows, maybe that 24MW may end up being 30 this year."

However there are some difficulties in a country where solar penetration is estimated to be under 2%.

The Ukraine conflict and lockdowns in China this year have disrupted global supply chains.

And delivery times for some equipment have risen from three months to nine months.

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