In rural Nigeria: small electric vehicles powered by small grids

Report: In rural Nigerian communities, small electric vehicles powered at the same cost as fossil fuels expand access to electricity

RMI factor[e] Ventures and UK charity Shell Foundation show that expanding electric mobility through a growing microgrid industry is profitable for both small and electric grid operators and improves community access to transportation

Abuja, Nigeria – April 21, 2022

Small trucks with renewable energy can power two- and three-wheeled electric vehicles (EVs) at the same cost as fossil-fueled alternatives. This provides rural Nigerian communities with the benefits of clean and affordable transportation; boosts electricity sales to rural utilities; It reduces electricity prices for everyone. In a new report, Operating Small-Scale Electric Vehicles Using Minigrids, RMI, Factor[e] Ventures and UK charity Shell are building on two pilot projects to demonstrate that the benefits of such symbiotic energy transmission are within the reach of rural communities.

People who live in rural areas around the world suffer from a disability due to limited access to transportation and affordable electricity. More than 70% of rural Africans are unable to access jobs, education and health care due to inadequate transportation. Three out of four people who live in rural areas of sub-Saharan Africa also lack access to electricity.

“This study provides compelling evidence that micro-powered electric vehicles can simultaneously support access to clean transportation and electricity,” James Sherwood, Program Director, RMI Africa Energy . said:. “By tailoring business models to customer needs and enhancing vehicle usage, further investment could pave the way to a future where electric mobility is the first choice for transporting people and goods, all while boosting domestic demand for electricity and lowering tariffs for all.”

In many rural communities, small grids powered by renewable energy are a better option than expanding the national electricity grid. The report concludes that the integration of electric vehicles provides more benefits such as clean and affordable transportation as well as reliable access to electricity. To maximize these benefits, the results show that EV-minigrid business models must match the incentives of EV and minigrid operators while tailoring mobility offerings to customers’ needs in rural areas.

“To achieve a quick return on investment, electric vehicles must literally cover a lot of ground, almost every day. This rural mobility pilot has been useful to demonstrate technical feasibility using small grids, test customer interest, and emphasize the need for high utilization and daytime charging,” she points out. Nigeria’s strong use case for linking a rural community to an economic hub or transportation hub to a future model in which E-Motos is an affordable mode of transportation on predictable, high-traffic roads,” Amanda Delcour, Director of Factor[e].

The study shows that:

  • As for the costs, rental returns and vehicle use observed in the Nigeria pilot, investments in two-wheeled rental electric vehicles are expected to pay off within 10 years of the vehicle’s life.
  • The payback period of the electric two-wheeler used in a daily rental business model in a rural small grid community ranged from three to ten years across the model scenarios. The economics of electric vehicles were strongest in the scenarios where the vehicles were rented more frequently than the Nigerian pilot.
  • Increasing vehicle usage is key to maximizing the benefits that electric vehicles offer to small vehicles and cost-competitiveness with fossil-fueled vehicles.
  • Future investment can increase the use of electric vehicles and maximize their value by adapting the business model and vehicle designs to the specific needs of rural mobility customers. Conducting thorough customer research is a first step to understanding these needs and increasing the use of electric vehicles.

“Access to affordable renewable energy and clean transportation is key to achieving inclusive growth that serves low-income communities in sub-Saharan Africa,” he said. Richard Gomez, Acting CEO, The Shell Corporation. “By showing the clear synergies between these two technology sectors – electric vehicles and vans – this report provides a pathway to expand access and improve health, education, and earning potential for millions of people.”

© Rocky Mountain Institute 2021. Published with permission. Originally published on RMI Outlet.

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