Nigeria to power telecom base stations with biofuels

A young Nigerian entrepreneur, Husainin Solomon, has risen up to the challenge to satisfy the quest of mobile telecom operators’ search for cheap energy in the country, by producing biofuels as a competitive and green alternative fuel to power base stations.

Mobile phone use in Nigeria and in Africa in general has skyrocketed over the past few years, contributing greatly to social and economic development. According to some analysts, the number of cellphones in Africa has increased from 7.5 million to 76.8 million, putting phones in the hands of roughly one in ten Africans. Mobile phones are being used very creatively in agriculture, trade, education, health care and in small businesses. They even provide a tool for grassroots politics and drive social change. Soon, the phones may be used to gain generic internet access, which would truly revolutionise life in rural Africa.

But energy supplies to power base stations are erratic and have become a major hurdle to expanding the sector. Electricity in Nigeria, both in urban and rural areas is epileptic. Thus most of the 6,000 installed base stations in the country are being powered by generators, using prohibitively costly diesel fuel. Biofuels may offer a way out. A pilot scheme to use the green fuels to power such base stations is now underway in Lagos, Nigeria's megacity. Soyabean based biodiesel is being used to power a sub-urban base station owned by MTN Nigeria in a six-month trial. The pilot scheme is being funded by the GSM Association Development Fund, Ericsson, together with MTN Nigeria (earlier post). Similar trials are under way in rural India.

Olabode Sowumi, head of Corporate and Marketing Communications of Ericsson, West and East Africa, explained how the biodiesel production and distribution process works. "The biodiesel is produced from crops that are rich in oil like groundnut, soya bean, palm oil and so on. A local entrepreneur can buy excess of the crops from farmers and convert the biomass into biofuel, using a special processing plant. The biofuel is then sold to the telecommunications operator."

Keywords of the system are decentralisation, local ownership, renewability and energy security. Husainin Solomon has emerged as the first local entrepreneur to buy into the idea. Putting up his own money and creativity, the young man approached Diamond Bank Plc, and the bank promptly invested 20 million naira (€116,000/US$ 156,000) in the concept, under its Bright Idea initiative. The investment is large, by Nigerian standards. Solomon:

The market is there, two telecom giants have approached me for the oil, because they are having problems fuelling their base stations across the country. So, what we are going to do is very simple: get people to cluster around about 10 base stations and they produce the oil and we put it in the generators and it will work. If not, it will be difficult and one day we will wake up and they will not be able to run the base stations.

The young entrepreneur, who spoke with the Daily Sun in an exclusive interview, argued that the biofuel concept can help solve the hydra-headed issues of power supply in the country. Interestingly, he points at the opportunity biofuels bring to help alleviate poverty, and especially to relieve the socio-economic crisis in the Niger Delta - an idea that is being shared by more and more people (amongst them Brazil's state-owned oil company Petrobras - earlier post):
bioenergy ::sustainability :: biodiesel :: palm oil :: soybean :: groundnut :: biofuels :: mobile phones :: cellphones :: telecommunications :: energy :: energy security :: Nigeria :: Africa ::

Background
I had a brief working opportunity in South Africa, working on a soya beans farm. The farm went a step ahead to roll out a diesel refinery, using soy oil. I was lucky to be among the people who installed the diesel energy system, called the Mopomulanga plant in South Africa. Biofuel from the plant is being piped directly into homes. The South Africans don’t have our kind of oil, but they get their fuel from coal and now biofuels.

After sometime, I decided to return to Nigeria to start something on my own. Initially, I started by creating awareness among local cooperative society, informing them about the benefits of the improved soya bean seedlings I brought from South Africa.

While I was doing that, I saw the advert of the Diamond Bright Idea and I approached them and the bank bought the idea and that has culminated in an equity investment of N20million in the biodiesel-for-base-stations concept.

Government
It is good that Nigerian government is talking about bioethanol, getting petrol from cassava, maize and sugar cane, using the Brazilian example. My take is that if the Nigerian government is doing this with ethanol, they should not neglect biodiesel because it is another essential sector of the energy industry. More so, it’s cheaper and adaptable to modern engines. Both Ford and BMW motors have come to approve the use of biofuels in their cars.

I realise that energy is the bedrock of any economic growth. Once there is an energy crisis, the economy is in trouble. This is why I am coming into the sector and I believe government must support this initiative.

Solution to Niger-Delta problem
You can imagine if Kogi is producing biofuel oil, and Niger-Deltans are not likely to continue to say don’t take our oil. With huge investment in bio-fuel we can complement the oil producing areas without necessarily destroying or damaging the soil.

Nigerian economy
The Nigerian economy is ready for this invention. Right now, the incoming president has been talking about energy. He has no option than to decentralize energy. A village of about 600 people can produce her own fuel from her feedstock, and put it into generator and it gives them light.

Challenges
The major challenge is people who may look down at the project because it’s a new sector. Nigerians are used to the usual fossil fuel for long, so if you are talking about an alternative source of oil it seems you are coming from the moon.

Another challenge is in the area of regulation. In Nigeria, because we are not prepared for it there is no sound regulatory authority that accommodates small-scale energy production by small groups. All the same, we are working towards establishing an enabling regulation to encourage such farming projects.

Fossil fuel and Bio-Diesel cost comparism
The technology for producing biodiesel is very cheap, so the cost of production is also cheaper . We are not looking at a gigantic plant; it’s a room-size plant, with about 30 people to run the production process.

Diamond Bank Bright Idea
Diamond Bank came in as equity partners in the project, and that is good for us and that will afford us to do some basic things. Now, we have passed the regulatory test, we can do a bigger pilot project, look at the adaptability, acceptability and then enlighten others in the industry so they understand what we are talking about.

The money given to us is not a loan, we are not paying back, but they will be sharing in the profit, so that the Bright Idea project will continue indefinitely. We will run the projects for the next five years, and we will pay them Net Profit Valuation (NPV), at the end of the five years.

More information:
Biopact: Ericsson, GSMA and MTN to use biofuels to expand mobile coverage in developing world - October 11, 2006

Biopact: Biofuels to expand mobile coverage in rural India - February 08, 2007

The Daily Sun (Nigeria): Behold! Nigerian who powers GSM base stations with soya beans bio-diesel - May 30, 2007.

NextBillion: Africa: The Impact of Mobile Phones - May 6, 2005.

The Feature: Farmers, Phones and Markets: Mobile Technology In Rural Development - Feb. 15, 2005.

My Heart is in Accra: Draft paper on mobile phones and activism - April 9, 2007.