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NERC targets 2,000MW from renewable energy with new regulation

By on November 3, 2015

The Nigerian Electricity Regulatory Commission (NERC) has approved the application of a new regulation to stimulate investments that would give Nigeria up to 2000 megawatts (MW) of electricity generated from renewable energy sources in the next five years from now.

The new law, ‘feed-in tariff regulations for renewable energy sourced electricity in Nigeria’ was reportedly approved at the last regulatory meeting of the commission.
A statement from the commission’s Head of Public Communication, Dr. Usman Arabi, on Sunday in Abuja, explained that NERC envisaged that the country would generate at least 1000MW of electricity from the various renewable energy sources that she’s endowed with by 2018.

The balance, it however hopes, would be realised by 2020.

Renewable energy sources are electricity generated from biomass, small hydro, wind and solar energy sources, amongst others.

Chairman of the commission, Dr. Sam Amadi, according to the statement, noted that: “With this regulation, we have been able to unlock further investment potential in the country’s power sector.  Its major objective is to diversify our sources of electricity and take advantage of our options.”

Amadi also noted that the regulation expects electricity distribution companies to procure 50 per cent of the projected renewable sourced electricity, while the Nigerian Bulk Electricity Trading Company (NBET) is expected to procure the balance of 50 per cent.

The regulation also specifies that the capacity for renewable plant for use in the sector should be between one and 30MW. Plants above this threshold will require additional conditions other than those already specified in the regulation.

“The provisions of these regulations shall apply to all qualifying renewable energy sourced electricity of capacity above 1 megawatts and smaller than 30MW at a site that is connected to the transmission grid or the distribution networks,” the statement said.

It further stated that: “For large renewable (30MW above), integrated resource planning will be carried out before the NERC will initiate a competitive bid process.
“The buyer will after this solicit bids and purchase at the most cost effective based on the optimal technology available at the location.”

The maximum amount of renewable sourced electricity a distribution company can have on its network based on optimal potential available in their franchised areas was also allotted.

The statement noted that this provision of the law was geared towards helping the sector achieve the right mix of energy for the Discos as well as protect electricity consumers from spike in tariff.

“For instance, the regulation allots higher volume of biomass 26MW; 22MW and 19MW to Ikeja, Ibadan and Eko electricity distribution companies respectively; whereas Abuja Disco has the highest of wind sourced electricity at 14.4MW, while Port Harcourt has 11.4MW of biomass and 6.5MW of wind sourced electricity.

“However, Kaduna and Kano Discos have highest allotments of solar sourced electricity than other Discos at 12MW, with small hydro at 10MW and biomass at 6MW apiece,” it explained.

According to the statement, provisions of distribution code would also apply to embedded generation while grid code would apply to those that would use the transmission network to transport their electricity.

The business life of every renewable power plant, according to the statement, was fixed at 20 years by the law which expects recovery of investment to last within this life span of the plant.

“NERC shall be responsible for regulations of feed-in-tariff whereas NBET serves as counterparty to power purchase agreement with renewable energy project developers,” the statement quoted from the new law.

Currently, Nigeria generates 4516MW from her thermal and hydro power plants. Gas supplies to the thermal plants which generate about 80 per cent of the country’s electricity has in the last couple of months improved.

Additional supplies from her renewable sources could provide some level of stability in supplies, especially if embedded within the distribution networks.

 

[ThisDay]