BusinessDay 09 Feb 2018

16 BUSINESS DAY C002D5556 Friday 09 February 2018
Policy Investments Market Insight Influencers
Auxano, Nigeria’s only solar
Panel ​assembly plant considers modular operations
ISAAC ANYAOGU
As grid power continues
to elude
large swaths of
the Nigerian
population,
Auxano Solar Nig. Ltd, a Lagos-based
renewable energy
outfit is considering setting
up modular solar panel assembling
plants across different
parts of Nigeria to deepen
access to its services.
Auxano, offering the only
solar infrastructure assembly
plant in the country, said the
consideration for small sized
operations scattered across
different locations in Nigeria
is to reduce haulage costs and
losses associated with moving
panels across Nigeria.
“Do you know it is cheaper
to import panels from
China than to move them
across Nigeria?” Chukwudi
Umezulora, popularly called
Chuks, a co-founder and the
company’s chief operating
officer of the company, told
BusinessDay when the paper
paid the company’s plant
in Satellite Town, a visit on
February 6.
Start-ups in Nigeria have
the odds stacked against
them. Commercial banks
with very low risk threshold
refuses to provide funding
to fulfil orders where companies
insist on getting bank
guarantees to hedge against
risk of a start-up operation.
The cost of packaging for
small businesses into assembling
of machines and
tools is prohibitive. To move
finished products from one
part of the country to another
is fraught with risks as haulers
contend with careless drivers,
corrupt policemen and other
security personnel, touts and
all manner of hazards on
Nigerian roads. Often time,
the product gets to the final
consumer with 10 percent of
the product damaged.
“The customer may
sympathise with you but
ultimately you bear the cost,
because the goods did not
get to the customer in good
condition,” he says.
Though Umezulora graduated
with a degree in Industrial
Chemistry from the
Imo State University, but you
would find that difficult to
believe because of his fascination
with machines.
“Even though I studied
Industrial Chemistry, I have
always been interested in
technical side of things and
I discovered I had keen interest
in the subject,” said
Umezulora.
The company’s factory
bore evidence of this. Auxano’s
operation from a warehouse
roughly 120 square
meters, is fitted with all sorts
of machines and equipments
for cutting, welding, resizing
and assembling the components
required to build solar
panels. The outfit employs
25 people who have been
trained through all the stages
of the company’s operations.
In the early stages of the
business, Umezulora said
the company hired labour
from a local technical school
and involved them in training
sessions it had with the
Chinese.
“This helps us manage
our costs,” he says, “it also reduces
downtime,” But it also
raised the problem of employee
turn-over as many left
after just staying six months
to pursue higher education.
Starting out, Umezulora
asked to be on the technical
team of Sky Resources Nig
Ltd where he was happy to
work without pay just so
he could work with a team
doing installations for solar
components. Though solar
was yet to go main stream, he
recognised early the potential
that existed in the industry
and stayed.
Ten years later he is still
working in the renewable
energy sector and has grown
from merely installing solar
components for customers
of importers who sell at Alaba
market to assembling the
solar panels for operators in
Nigeria.
The response from the
local market is just beginning
to thaw, he explains.
Many Nigerians, it seemed
have a deep-rooted aversion
for products made in their
country.
“The question I keep getting
is, will it work? This is
even when I know it is better
quality than the one imported
from China,” said
Umezulora.
The entrepreneur said
that with support from organisations
like AllOn, many
local operators have become
more receptive. He called
on the government to set up
support systems like the Chinese
to assist local manufacturers
including consistent
exchange rate policy, access
to finance and working capital
and implementation of
already developed policies
to improve ease of doing
business.
Formerly known as
Chume Integrated Services
Co. Ltd incorporated in 2005,
Auxano Solar Nig Ltd was
registered in 2014 specifically
for our Solar Business.
Auxano Energy is an indigenous
company that deals in
procurement, sales, designs,
installation and maintenance
of solar and inverter
systems.
From Oil to Solar: Saudi Arabia plots a shift to Renewables
Life in Saudi Arabia
has long been defined
by the oil that
flows from the kingdom.
Over decades, the vast
wealth it pumped out paid
not just for gleaming towers
and shopping malls but also
for a government sector that
employs a majority of working
Saudis.
Now, Saudi Arabia is trying
to tie its future to another
natural resource it has in
abundance: sunlight.
The world’s largest oil
exporter is embarking, under
Crown Prince Mohammed
bin Salman, on an ambitious
effort to diversify its economy
and reinvigorate growth, in
part by ploughing money into
renewable energy. The Saudi
government wants not just
to reshape its energy mix at
home but also to emerge as
a global force in clean power.
Reaching that goal is a big
if. But the strategy is finally
making progress after fits
and starts.
Riyadh on Monday tapped
ACWA Power, a Saudi energy
company, to build a solar
farm that would generate
enough electricity to power
up to 200,000 homes. The
project will cost US$300 million
(S$396 million) and create
hundreds of jobs, according
to Turki al-Shehri, head
of the kingdom’s renewable
energy programme.
By the end of the year,
Saudi Arabia aims to invest
up to US$7 billion to develop
seven new solar plants and a
big wind farm. The country
hopes that renewables, which
now represent a negligible
amount of the energy it uses,
will be able to provide as
much as 10 per cent of its
power generation by the end
of 2023.
“All the big developers
are watching Saudi,” said
Ms Jenny Chase, an analyst
at Bloomberg New Energy
Finance, a market research
firm.
“The country has made
grand plans and pronouncements,
but various bodies
within it have failed to agree
on the new way forward,” Ms
Chase added. She referred
to the agreement as “the
first step in creating what is
widely expected to be a major
market.”
Saudi Arabia has talked
a big game when it comes
to renewables. It adopted
ambitious targets for green
power several years ago, but
no major projects were carried
out, and little changed.
That is not unusual - The
country’s biggest solar farm
in operation covers a parking
lot of the national oil company,
Saudi Aramco, here in
Dhahran. Lying just a couple
of miles from a fenced-off
area honouring the country’s
first commercially viable oil
well, it generates enough
power for a nearby office
block.
Still, the experiment with
solar power has been an
important catalyst, and the
company built a team of
experts in renewable power.
The experience helped Saudi
Arabia focus on conventional
solar panels over another system,
known as concentrated
solar, in which mirrors focus
sunlight to create heat.
The renewables strategy
finally started to take real
shape when Khaled al-Falih
took over as energy minister
in 2016. Falih made solar
and wind a priority for the
kingdom, and set up a new
unit last year to expedite the
work. Much of the staff was
drawn from Aramco.
Shehri, who had worked
at Aramco before leading
the kingdom’s renewables
programme, said he faced an
“extremely challenging” task.
Meeting Saudi Arabia’s targets
would require contracts
for a series of new facilities
to be awarded by the end
of 2020. “The only way this
was possible,” he said, “was
because we have done previous
work.” Saudi Arabia, with
its vast oil resources, would
seem an unlikely champion
for renewables. But the country’s
location and climate
mean it has plenty of promising
sites for solar and wind
farms.
The costs of installing and
operating those two technologies
have fallen drastically
around the world in recent
years. That means that even
in a country where oil is plentiful,
renewables beckon as a
cheap, and clean, alternative
to traditional fossil fuels.
For the project announced
on Monday, Riyadh received
bids for the solar farm, which
will be built in Sakaka, in
northern Saudi Arabia, that
rivalled the lowest ever submitted
at auctions anywhere.
At 2 to 3 cents per kilowatthour,
a wholesale measure of
electricity, solar power here
would be below the cost of
fossil fuel-generated electricity,
Shehri said.
“Just look at the prices,”
Ms Chase said. “That is why
they are doing it.” A big push
into wind and solar power
would also have other benefits,
notably allowing Saudi
Arabia to sell more of its oil.
Saudis rely on air-conditioners
for much of the year,
and the scorching Arabian
summer sends demand for
power soaring. Much of that
electricity today is generated
at power plants fuelled by
oil. Last June, the facilities
burned an average of 680,000
barrels of oil a day, according
to data supplied by the Joint
Organisations Data Initiative,
a monitoring group.
That figure - comparable
to the output of a modestsize
oil-producing country
like Egypt - was down from
nearly 900,000 barrels a day
in 2015, but it still essentially
represents wasted cash.
Had it been sold overseas,
that crude could have added
US$47 million a day to government
revenue, at current
prices.
Selling oil internationally
is central to funding the
Saudi budget. The terms of
the Sakaka project’s auction
required that developers pay
the upfront cost of the solar
farm, in return for payments
for the power they supply to
the grid. That would allow
Saudi Arabia to continue
focusing on producing and
exporting oil while it makes
the shift to cleaner power.
Isaac Anyaogu, Email: isaac.anyaogu@businessdayonline.com, 07037817378, Graphics: Joel Samson