Full Title: Harvesting Sunshine: How Productive Uses of Minigrid Electricity Make Farmers Richer and Energy Cheaper
Author(s): Habiba Ahut Daggash, Ayodeji Ojo, Folawiyo Aminu, Zihe Meng, Scarlett Santana, Suleiman Babamanu, and Andrew Allee
Publisher(s): Rocky Mountain Institute
Publication Date: September 9, 2024
Full Text: Download Resource
Description (excerpt):
Income-generating productive uses of energy (PUE) allow rural entrepreneurs to utilize clean electricity to support their businesses and increase their incomes. PUEs also boost revenues for rural utilities struggling to achieve profitability and maintain reliable energy services because of limited demand. The Energizing Agriculture Programme (EAP) recognized PUE’s potential to transform livelihoods and improve the economics of energy access. It brought together Nigerian energy and agriculture companies to design and test business models that deliver affordable PUE equipment to rural customers.
The EAP confirmed the value proposition of PUEs. By switching from fossil fuel-powered equipment to electric PUE alternatives, agribusiness owners saved up to 82 percent on their energy costs. In one year of operation, a $61,000 investment in PUE yielded 2x in value-added commodities for their businesses. Similarly, PUE deployment benefits minigrid developers. Our analysis shows that the largest energy-consuming PUE, a 3-ton cold room, increases electricity sales enough to drop the levelized cost of energy by 25 percent. A minigrid serving multiple PUE loads can produce electricity at half the cost of a minigrid serving predominantly residential customers.
This report narrates the EAP’s experience deploying and operating 269 mills, freezers, electric vehicles, and other agricultural equipment at rural minigrids in Nigeria. It also distils the lessons learned from testing business models that deliver integrated energy-agriculture solutions in rural contexts. The report provides a set of recommendations for public, private, and philanthropic partners to realize the opportunity that PUEs offer at scale across Nigeria, including the following.